• Skip to primary navigation
  • Skip to content
  • Skip to footer
StoneX®

Trade Futures, Spreads and Options with Confidence.

Top Navigation

  • Open a Futures Account
  • Sign Up
  • Log in
  • 1.800.800.3840

Primary Navigation Menu

  • About
    • Who We Are
    • Services
    • Risk Disclosure
    • COVID-19
  • Trade
    • Broker-Assisted
    • Self-Directed / Online
    • Request Pricing
  • Hedge
    • Ag Marketing Plan
    • WASDE Analysis
    • Grain Resources
    • Livestock / Dairy Resources
    • Request Pricing
  • Invest
    • Automated Strategies
    • Managed Futures
    • Request Pricing
  • Advisories
    • GENERAL / FUNDAMENTAL
      • DT Newsletter
      • Insider Market Advisory
      • Turner’s Take Newsletter & Podcast
    • TECHNICAL ANALYSIS
      • The Cullen Outlook
      • Data Feed Trade
      • Jarboe Trading Journal
      • Trade Spotlight
    • AG MARKETING
      • Cattleman’s Advisory
      • Technical Ag Knowledge
      • Turner’s Take Ag Marketing
    • THIRD-PARTY RESOURCES
      • CFRN
      • Moore Research Center, Inc. (MRCI)
      • OptionWorks®
      • TASMarketProfile.com
  • Education
    • CME Group Resource Center
    • CME Group Offers
    • Small Exchange Resources
    • Guides
    • Frequently Asked Questions
    • Order Entry Handbook
  • Blog
    • Futures 101
    • Ag Marketing
    • Tips & Strategies
    • Trading Advisories
  • Resources
    • Trading Software
    • Quotes and Charts
    • Futures Calendars
    • Contract Specifications
    • Margin Requirements
    • Futures Calculator
  • Accounts
    • Apply
    • Access My Account
    • Funding
  • Contact
 

Learn How to Become a Scalper in Options Trading

February 24, 2021 by Daniels Trading| Tips & Strategies

Scalping is a short-term trading strategy in which the trader repeatedly takes small profits to secure market share. Although forex and equities products attract many scalper traders, futures and options are also ideal markets for the implementation of this powerful methodology.

Let’s take a closer look at scalping and what is required to make money as a scalper over the long haul.

The Ins and Outs of Scalping

The modern financial markets are diverse arenas featuring minimal barriers to entry. Because of the accommodative atmosphere, thousands of people enter the markets every year. Many new traders view scalping as a surefire way of making some easy money. Unfortunately, it’s a bit more complicated than that.

The "Option Strategy" course helps you understand the ins and outs of options trading strategies. Learn more >>>
From a practical standpoint, scalping has several attractive features:

  • Frequency: Scalping is an active trading strategy that requires executing a high number of trades on a daily basis. If you’re seeking action, rest assured that you’ll never be bored.
  • High winning percentage: Traditional day and swing trading strategies typically aim for modest 25-30 percent winning percentages to stay in the green. Scalpers shoot for much higher success rates, with most being above 50 percent. Because of the small profit targets, the odds of a scalp cashing in are much greater than those found in traditional trades.
  • Reduced risk: Scalping strategies are designed with ultra-short-term trading horizons in mind. Holding positions for only seconds or minutes vastly reduces exposure to systemic risk. If the market crashes or breaks out, scalpers are unlikely to suffer a negative impact.

There’s no denying that scalping offers a collection of unique benefits. Reduced risk exposure, high winning percentages, and constant action are factors that frequently gain the attention of novice traders. Action and limited risk? Where do I sign up?!

Despite the upsides, the scalper trader faces a long list of necessities that are vital to success. It isn’t enough to have a viable strategy—consistent execution is an absolute must. To accomplish this feat, all trade-related efficiencies need to be optimized. These five inputs are essential for anyone interested in becoming a profitable futures and options scalper trader:

Direct Market Access

To be a successful scalper, you have to be fast. Direct market access (DMA) enables you to transfer data to and from the market free of intermediaries. The result is reduced trade-related latencies facing order entry and active position management. Advanced platforms, such as dt Pro, offer this feature to retail traders who require the utmost speed.

Liquidity

The success of any scalping strategy depends on how efficiently it’s traded. From the standpoint of the market, maximum depth and liquidity are ideal. Deep markets feature tight bid-ask spreads and robust participation―two factors that minimize slippage and promote desirable order fills. Market liquidity is one area in which the futures and options markets are especially receptive to scalping. Equities indices, energies, metals, and bonds all offer contracts that are inherently liquid and tradable.

Volatility

Securities that exhibit constant pricing volatility are the best targets for the scalper trader. Although capitalizing on small price movements is the objective, the greater the volatility, the better. Large daily ranges and regular periods of heavy participation are common attributes of a volatile market. Many futures and options contracts offer consistent volatility. Three of the most active are WTI crude oil (CL), gold (GC), and the E-mini S&P 500 (ES).

Stamina

The backbone of any scalping strategy is the execution of significant volumes. For other disciplines, such as day or swing trading, patience is a virtue. Scalping is a different animal―you must be aggressive and ready to capitalize on all opportunities. Because scalpers take small profits, the number of trades executed is a primary driver of the bottom line. Missed trades are as bad as lost trades, which means the successful scalper trader must have the stamina to identify and execute trades all session, week, month, and year long.

Low Costs

Sunk costs are the amount of capital required to sustain operations. To active futures and options traders, this means commissions, exchange fees, data fees, and platform fees. One thing you can do to minimize your sunk costs is to deal with a good broker. Strong brokerage firms often provide their clients with complimentary trading platforms and data feeds. Reduced or tiered commission structures can also help mitigate the cost of buying and selling large volumes of contracts on the open market.

Want to Become a Scalper Trader?

Perhaps the single largest benefit of scalping is flexibility. As a primary or supplementary methodology, scalping futures and options can help you pursue your financial goals with limited risk. For more information on this exciting trading strategy, speak with an experienced Daniels Trading broker today.

Option Strategies Course

Filed Under: Tips & Strategies

About Daniels Trading

Daniels Trading is division of StoneX Financial Inc. located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading was built on a culture of trust committed to a mission of Independence, Objectivity and Reliability.

Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

Subscribe To The Blog

Footer

Site Navigation

  • Frequently Asked Questions
  • About Us
  • Customer Reviews
  • Contact Us
  • Futures Blog
  • Open a Futures Trading Account
  • Media Resources
  • Fund Your Account
  • Legal Notices

Contact Us

StoneX Financial Inc.
Daniels Trading Division
230 South LaSalle Suite 10-500
Chicago, IL 60604
+1.312.706.7600 Local / Int'l
+1.800.800.3840 Toll-Free
+1.312.706.7605 Fax

Connect with Us

Trustpilot
Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

  • Risk Disclosure
  • Privacy Policy
  • California Residents Privacy Notice
  • Terms of Use
  • Back to top