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The options trading has gone viral these days. With little knowledge and the best strategy, you can make options work in your favor. Up to 80% of traders in this niche succeed. And those who fail have less knowledge about risk factors involved in it and the price movement of stocks.
There are many success stories of options traders releasing day by day. Let’s jump into the topic: What percentage of option traders make money?
According to the previous 2 years stat, out of 151 option traders, 87% were successful in making money. An average options trader with $10,000 in the account can make 10% to 50% or more per trade. In terms of salary, options traders make $160,919 per year and $13,409 monthly in the USA.
Remember not everyone can beat this trading ground. First, you have to get approval from your broker if you want to trade options. After this, you can start trading. You’ll have to prove yourself that this trading type is suitable for you to your brokerage
Can People Really Make Money Successfully From Option Trading
If you’re making money, why are others losing in options trading?
If everyone loses, why are you making money?
If we’re making money, who is losing?
Some traders are making money trading options. You can say everyone makes money here and everyone loses money here.
Individual traders buy and sell options with their own strategy. They play in this market with their own skills. Everyone plays differently.
So, the options behave as you deal. If you stick to one strategy and keep expiration time and date in your mind, you’ll never lose.
You might have seen videos on making 1578% ROI in just 3 weeks, it’s an exaggeration. Don’t believe in it. You can make 1% to 3% ROI if you play safely.
But if you trade in the risky mode you can make higher ROI and can lose more. Be patient and understand the price war of the stock you own before buying options.
What Percentage of Options Trader Are Successful
There is no foolproof data available to answer the exact percentage of successful traders. Roughly in the past 2 quarters, 87% of traders are successful out of 151 who buy options. This success rate is achieved at the widespread S&P -2.7% vs. 4.17%.
What makes option traders successful? Patience is the main quality that wins at the end.
Such investors can wait for the right opportunity. They will never try to make a big win one every price movement. It’s all about watching the market and waiting for the right spot to hit.
How Much Does Average Option Trader Make Money
If by average options trader, you mean a trader with $10,000 in account then the win rate is obviously decent. For low capital, you lose more. Moreover, the win rate also decreases if you have $ 5000 in your account. The more you have, the more you have chances to win.
Realistically, it is possible to make 10% to 50% or more per trade. However, it is possible if you have $10,000 or more in your account. If you manage risk properly, you can make $250 to $1000 out of it. Moreover, your trading strategy matters a lot.
How Much Do Good Option Trader Make
The average annual pay of Options traders varies from the location. In the USA the average annual pay of options traders is $160,919. That is $77.36 per hour, and $3,095/week or $13,410/month.
According to Zip Recruiter, average option traders earn as high as and as low as $372,500 and as low as $20,500.
Table of Options Trader’s Salaries In the USA
| Category | Annual Salary | Monthly Pay |
| Top Earners | $349,000 | $29,083 |
| 75th Percentile | $279,000 | $23,250 |
| Average | $160,919 | $13,409 |
| 25th percentile | $50,000 | $4,166 |
What Is the Percentage of Options Traders Who Lose
Whenever someone starts trading, he or she comes across the figure that almost 90% of retail traders lose money in trading. This figure is the total percentage of losers including all types of trading. It’s not the same when we calculate the loser’s percentage in different categories of trading.
For options trading, it is said that 80% of traders who buy options lose money daily. It is risky and most retail traders lose money when buying it.
The majority of losers are those who buy options for the long run. As we know options require buying and selling before the expiration date. This feature makes it difficult to hit profit goals concerning time and expiration.
Why do most options traders lose money? The reason is that they try to hold positions up to the expiry date. It’s better to exit the market before the expiry date whenever you get a good price. Don’t hold options for long.
Can You Get Rich by Trading Options
Yes, you can, if you have the knowledge, risk mitigation skills, and more than $5000 in your account. However, it will take time to develop a winning strategy.
But if you are consistent and you stick to one effective strategy you can get rich. The flexibility of options allows you to leverage your position to boost your return.
3 ways can make you a rich trading option with versatility. Let’s have a look at the ways to make more money out of options:
- If you use options for hedging, you can make a huge return. To do so move in any direction upside, downside, and sideways.
- Through option trading, you can grow your small account.
- The risk is there but you can minimize it. To do so minimize the amount spent on the premium option.
FAQ
Why do most options traders lose money?
Many options traders lose money when they try to hold options till the expiry date. In greed of making more profit, they don’t sell it at the right time. They think a much better opportunity is yet to come.
In this attempt, they even miss the opportunity to make money in their hands and even lose more. So, it’s better to exit the market as soon as you get a good price without waiting for more for expiration.
Who is the richest option trader?
The name of the richest trader in the world is Paul Tudor Jones (1954–Present). He is the founder of Tudor Investment Corporation, owns a $7.8 million hedge fund. He made this amount from the 1987 stock market crash.
Final Lines
According to stats, out of 151 traders, 80% were successful in the past quarter of years. It’s a big percentage. If you play safely keeping an eye on the risk factors, you can surely make money. This type of trading is getting more and more popular day by day.
It is better to start with a moderately profitable simple strategy. Gradually add a bit of versatility to your trading style and skills. The future of options trading is bright!
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