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andy_williams's avatar

What is the niche market for option trading in U.S.?

Asked by andy_williams (16 points ) March 13th, 2012

I am trying to come up with an option trading educational website. I am doing some research on it. What is the niche market of option trading for U.S.? How much is the potential or what should be my positioning strategies? Also I am willing to find the biggest challenge and frustration of people who really start options trading and why they start it in the first place and what have to be the magic bullet for them to sell. Could anybody help me with my research? Thanks in advance.

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7 Answers

elbanditoroso's avatar

Intelligent people who have money they are not afraid to lose.

It is a small market.

andy_williams's avatar

@elbanditoroso How small? Do they differentiate option trading over stock or forex? which one is more profitable?

wundayatta's avatar

I’m sorry, but it sounds to me like you aren’t even asking the right questions. Where did you get this idea? Why do you say “the” niche market instead of “a” niche market? Surely there can not only be one?

Also, you say you willing to find the biggest challenge, but how do you propose to find it? Do you even know anything about how to find it? Do you plan to talk to customers? Do you have a group of people you can talk to? Will you use a focus group? Have you done a literature review? Do you know what the various option trading markets are? Have you ever done any trading of your own?

Answer these questions, and maybe I can help you. As it is, it sounds like you are asking someone to develop a business plan for you. That makes no sense.

andy_williams's avatar

@wundayatta Thanks a ton for asking the very necessary questions. I am novice in the field; however willing to invest in a new option trading training website with one of my friend. That is the reason I am willing to find out if my investment in this particular domain has any value addition in terms of revenue generation or not. I have done little research on this and has little concept about the operating market, about OCC, Arca market and its structure, NYSE Euronext etc.
I have been given a business plan by a 3rd party (and they billed me for this service), but not sure whatever they have presented to me is 100% true or not. Hence I thought that I should take the pain and find it out myself. So at this point whatever info I have, all have been provided by my partner and by the 3rd party vendor.
I agree with all the points raised by you and agree that I don’t have any perfect answer for these. but I am willing to find out. Is there any niche market I should focus on? Will my investment pay me off in future? etc. etc. I have done a literature review and has visited OCC websites and reading out lots of blogs (for e.g. www.optiontradingpedia.com , http://sjoptions.com/videos or this one http://options21.com/options-trading-courses/options-mastery-mentoring/ etc). I have done a Gap analysis too so that the website do not lack the essential quality aspects, but still not sure if I could reach break even points.
Now if this answered your queries, let me know if you could help me out. I am by profession a designer not a trader.

Thanks much.

wundayatta's avatar

You need more information and I see that you recognize that. However, fluther is not the place to get that information, unless there is an options trader here who is willing to look over your business plan.

I would never trust a business plan made by a third person unless you had a lot of involvement in it. You have to make hundreds of decisions when starting a business, and if you didn’t make those decisions, your business plan is worthless.

The best thing to do is to start shopping your plan around to various investors. They will tell you what is wrong with it. They should give you advice about where the holes in your plan are.

I could look at your plan, but you can’t trust me if I offer you free advice. You would only want me to advise you if you paid me, and you can’t pay me because you don’t know who I am. So any specific advice I give you is worthless.

Have you written up your lit review? You need to describe the business of options. You need to identify the places where there are underserved opportunities. I would be asking traders about this. I would be reading everything I can in the trading literature. I would also ask myself if there was a commodity I knew a lot about, because that is where I would focus my energies. If not, then a commodity I was interested in. Then I would write down why I was interested in it.

Your business plan needs to show you how you reach your breakeven points, and you have to believe it is a real plan that you can make happen. Your money will be on the line here.

You remind me of some clients I have—they know a lot, but they have no idea how to organize their efforts. You have a business plan. It should have steps to take. You should start with step one, and then move forward. Write yourself a time line. Tell yourself how much time you think it will take to accomplish each task. Then start working on your tasks and see if you can do them in the time allotted. If not, adjust your time estimates.

I find that I can get even people with large dysfunctions in planning to be successful when they take this approach. Sometimes I build them spreadsheets to help them do what they need to do. Once you have a list of what you need to do and the time you think it will take, you should be in good shape. Good luck.

gorillapaws's avatar

The process of making the business plan is crucial to the success of the business, it forces you to really think things through. After you’ve made it, you probably won’t look at it much, but the value is in the creation step. Outsourcing the process is useless.

I would read Rules for Revolutionaries it’s written by a venture capitalist who gives a lot of no-bullshit honest info about building a company. He also wrote The Art of the Start. There is a lot of overlap in the content, but I think either one will give you a much better perspective on how to start a successful business.

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