Paper Trade

The Options Course, a recommended read, was borrowed from the library for me to learn from the expert and to keep my daily commuting time occupied.

One of the advice given was to paper trade.(using a demo account to trade without the use of real money).
Already I have bought a couple of call options and sold them way before they expire.(using Virtual Account)

Bought: - Call Options
- 1 Contract of RUT at $26.80 and sold one day later at $32.10. (profit of $500 after deducting brokerage fees)

- 1 Contract of C at $0.59 and sold 3 days later at $1.20 (profit of about $30)

- 1 Contract of SPY at $2.66 and sold 10 days later at $4.56 (profit of about $160)

Sold: - Naked Put
- 1 Contract of SPY Mar10 116 Put to receive premium of $186

I'm waiting for the Put Options to expire worthless.(effective today 3rd Friday of the month) If SPY drops big time before today, it would be exercised and I would be obligated to buy the shares. Since my virtual account has a lot of money, lol, I wouldn't consider this to be a naked put since I have the margin to actually purchase actual 100 shares of SPY. Correct me I'm wrong.

Learning points:

- if the call option contract is bought cheap(e.g $0.59), I have to make sure that the price goes up to a point where it is profitable after factoring in brokerage fees.
- I should plan an exit for both profitable and losing trades.
- Sell the call contract at least more 30 days before it expires as it still has time value, as advised.
- I should start to read charts and ratios before committing future trades(I did not do so for the above mentioned)