Does Day Trading Apply To Options?
In short, yes, day trading does apply to options. But what is a day trade, and what other trading styles are there? Is one better than the other?
1. Day trade
A day trade is when you enter and exit a trade on the same day. Day trades require more time and knowledge, so you'll find day traders sitting at their desks all day, monitoring their positions. A day trade is a higher risk and a high reward.
2. Scalps
Scalp trades are fast, and you’re in the trade for a 10%-20% profit. I don't recommend scalping if you don't have a broker with fast fills or a hotkeys/stream deck setup. Many traders will start their morning with a scalp; if the position continues to go their way, it can turn into a day trade.
3. Swing trades
Swing trades are trades you purchase with time; a typical swing trade is anywhere from 1-2 days up to a few months. Swing trading is an excellent option if you have a full-time job. It requires less time monitoring positions and is less stressful; with swings, you can buy and forget.
4. What's the best trading style?
I use all three trading styles. When I’m on vacation, I’ll swing trade. If I have time for a quick trade, I'll scalp and be gone for the day, and if it is a typical day, I’ll be at my desk trading. I recommend you learn each tradeing style and find which works best for you.