How do options traders make money?

A career as an options trader can be lucrative, but there is also an inherent risk in speculative investing. If an options trader works for a large firm, such as a hedge fund, they are paid a base salary and then earn commissions for profitably buying and selling options. If you decide to become an independent options trader, you make money directly from each successful trade. Options traders working for large firms rely on bonuses. The more successful your skills at trading options, the greater your bonus will be at the end of the year; independent traders must do without this incentive.