How to Make Money While in Your Underwear

Day trading is a unique topic in that some of us have at one time or another have “played the market” or more likely the “market has played us.” Regardless, as many of us combat a down economy, a brutal job market, and enter a period of time when millennials are redefining what a rewarding and successful career actually is – it is an interesting possibility; could I make money while in my underwear?

While I will not get into the details of how to be successful or the general logistics of doing it, I will explore why day-trading has become so popular over the last decade. For many, using platforms such as E*TRADE, Scottrade, or TD Ameritrade are familiar for investing disposable income for appreciation and financial returns; however, there is a fundamental difference between – personal investment and day-trading. With day-trading, unless one is under the oversight of a brokerage firm or a brokerage ‘shop,’ then you must have at minimum $25,000 in a margin account as well as proper licensing, fees for each exchange, and multiple other requirements. This fundamental difference lies largely in the volume (amount of) trades taken during a given period (day, month, trading session, etc…).

Conceivably, this is a significant obstacle for someone scrapping up enough cash to make it worth their while playing the market. Many individuals may make one or more trades in a given day at the personal level, but nothing in comparison to the potential hundreds that could be made day-trading in a given session. At higher trading volumes, indeed the risk is high, but the reward is significant as well. After personally speaking with a trading supervisor and a veteran of Wall-Street for over three decades, I was enticed and became even more interested about this part-time (full-time for many – however, if you like to work hard and are a workaholic it’s fitting) earning opportunity.

Here are some points that I took away from the highly educational conversation about day-trading that may be of value to the readership:

• When trading through a ‘shop,’ which is essentially a group that allows an individual to come in and invest an amount equal to about $5,000, you receive many of the benefits that are not received when going in alone – such as training by professionals, use of a trading platform, online web training, a backbone to lean on for assistance, and most importantly – an ability to leverage your equity (approximately 4x).

• Day-trading is high risk, high reward – there is no getting around that. If you do not have an appetite for risk then you most likely will not get too far. Some days you win, some days you lose – but with the right attitude, strong work ethic, and a commitment – you can at minimum learn something new and cross off one challenge on the list.

• Many people day-trade and work a full-time job, such as in accounting, education, or science. They simply trade when the market opens at 9:30AM EST, make a few calculated trades, and then close out their positions from the market just before starting work.
For many the real challenge is how soon and how much money can be made with this endeavor – because of after all you have to pay the bills – even if you are in your underwear.

Additional reading sources:
http://en.wikipedia.org/wiki/Day_trading
http://www.sec.gov/answers/daytrading.htm

Picture courtesy of Freefoto.