I always wonder where it is best to start getting into trading stock. Like a place where you can play with a few shares but are not overwhelmed with lots of fees for simple transactions. Any suggestions? Possibly in Europe?
If you are in technology for ex., I would have a look at tech shares, you will then have a slight information advantage at least.
Trading account: either just talk to your bank (most of them provide a trading account) or find a broker on comparison websites. ultimately the trading fee, if not exaggerated, is not that important if you only dabble once in a while.
For example, enter the market by writing Puts, earn a premium and if executed you then own shares at a discount. Then turnaround and write Covered Calls on the stock for out of the money strike prices. Earn a premium on your stock, and earn dividends, and capital gains. Protect your capital by using part of your Call premium to purchase a protective put on your stock (in line with your risk profile). If executed on the Call repeat by writing Puts.
Of course there is a lot you need to know, Google is your friend.
Problem with this is that sometimes the price might dip for irrational reasons(let's call it technical reasons), which is the good scenario.
However, sometimes price might dip because of fundamental reasons(let's say company announces that their CFO has misstated results for last 5 quarters).
Even worse is writing Covered Calls without any thought. There was that guy on Reddit who sold Covered Calls on his McDonalds stock. It worked great for a few months, collecting premiums while the stock stayed stagnant. Then the stock dipped in such a way that writing Covered Calls at the original strike price was not really worth it anymore, while writing at a lower price than purchase price was even worse. The protective puts(which he did not have) would not have been triggered either as the dip was not low enough.
So again, there is no free lunch.
With this strategy you have the chance to protect your capital (by buying protective puts) while earning an income (write premium) and capital gains (in the money Covered Call strikes and dividends). You can make money with this strategy when the market is going straight up, somewhat up, and sideways. You can protect your capital when the market goes somewhat down, but you will loose money if the market crashes.
Frankly there is much I've not said when it comes to trading that is do or die. Money management, position sizing, managing positions, emotional management, fundamental/technical/sentimental analysis just to name a few areas a successful trader should master or at the very least have a working knowledge of.
As I said in another comment, writing options covered or not is basically a bet against volatility.
That's why you look at historical volatility and other criteria when selecting a watch list.
Here's a concrete example. A stock is trading at $100 and you write a put on it struck at $90, earning a premium of (say) $5. Then the stock falls to $80 and the put is executed, so you buy the stock for $90.
You now have something worth $80 and a $5 premium, but you paid $90, so you are $5 out of pocket.
Now you write a covered call on the stock struck at $100, earning a $3 premium (because it's further out of the money the the put you wrote earlier). The stock goes to $110, so you sell it to the call owner for $100. That's nice, you've earned the $3 premium and you sold the stock for $10 more than you bought it for (a total of $13 up). But if you hadn't written the call, you could have sold the stock for $110, and been $20 up instead.
If you also buy a protective put (say for $1) then that's an additional loss you bear in this scenario, since you can't execute the put.
If you're writing options, you're basically betting against market volatility. You'll do alright in the short term, but you'll get absolutely creamed if there's a stock market crash or other crisis.
To put it another way, you make money when you buy, not when you sell. Therefore your purchase price is a margin of safety if done right. I carefully select the companies I trade by building up a 'conservative' price target based on a company's tangible book value per share (TBVPS). I try to write puts that offer a good risk/reward profile relative to the TBVPS. Even if I was caught in a market crash I'm as close to book value as I can get. Having done my homework I'm sure this company will outlast the extreme market sentiment. When such events occur I add to my position on the strength of my fundamental analysis. The market always overshoots and creates a wealth transfer opportunity.
Your advice of combining options and stocks is at best a little naive, and at worst will be a disaster for anyone who's not a sophisticated options trader.
https://news.ycombinator.com/item?id=5107045
Edit: specifically (in the UK?), http://www.timetotrade.eu
About a week ago there was additional discussion of their support for live trading: