We here at thinkorswim officially became part of Ameritrade this past week. We are little guppies swimming in a much bigger pond and there is a great deal of excitement for most of us with the prospect of a larger customer base to assist in investment strategies. I bring this up because I believe this is the same sentiment many traders experience when they foray into new products like options or futures from the world of stocks. There is excitement, but of course a little trepidation as well. As long as we don't lean too far over our skis initially, we will absorb some knowledge and make some strides. But it is so important to resist the urge to get ahead of ourselves.

This is our ongoing lesson to the legions of folks who are taking control of their investments; baby steps, baby steps. You can always grow trading plans down the road, but it must come in a gradual manner and not in gulps or you could choke.

So on your first venture into options, start with one contract and get some familiarity and gains. It is very easy to trade up, but much harder to reduce size because you can get slapped down. The lesson is short and sweet, but it is a simple lesson everyone must heed.

Steve Quirk

thinkorswim, Inc. and its registered employee, Steve Quirk, do not solicit or recommend any form of trading in the individual stocks (or their derivatives) mentioned above. Please do careful, independent research before investing any money as well as weigh the possible consequences on your particular financial situation before doing so. The risk of loss may be substantial.

thinkorswim, Inc. is a wholly owned subsidiary of TD AMERITRADE Holding Corporation.