Trading Options as a Prop Trader

10/15/2009 12:01 am EST

Focus: FOREX

Tim Bourquin

Co-Founder, The Traders Expo and The Futures & Forex Expo

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Most at-home traders decide to trade their own account and pay themselves from those profits on a regular basis. Another option, however, is to trade a firm's capital and be paid based on a percentage of the profits generated. Today's interviewee, Evan McDaniel, chose the latter option and trades firm money instead of his own. He is an options trader, and we quickly get into the strategies he employs to generate the profits he needs to make a living. Evan discusses how he decides what options to buy and sell, how he stays out of the "danger zone" where volatility can wreak havoc on any option trader's account, and the time frames he watches on the underlying stocks. We also talk about the "greek" he monitors most closely to ensure he is on the right side of a trade, and the support and resistance levels that are important to his style of trading. Finally, we talk about the psychology of trading firm money and why he continues to choose that route instead of trading his own money.