Paper Trading Resources

The name Paper Trading implies what the process used to require in the old days: you, a notebook and pencil, and the morning newspaper with the previous day's closing stock prices.

We've come along way since then, of course. As retail traders and investors have become more sophisticated, so has the need for more sophisticated and up to date tools.

I've listed three different choices below for free Paper Trading. Please note that the first two, although they're provided by individual online brokers, are also hosted on the CBOE.com website. There's no direct link to them, however. From the home page, move your mouse over the TRADING TOOLS tab (the 5th tab from the left) to access the drop down menu where you'll find that they're accessible.

Paper Trading Choices

2. paperMoney - stock and option practice trading - highlights trading software by online broker thinkorswim - they're in the process of being acquired by rival TDAmeritrade, so it's unclear in what capacity this free practice trading software will remain available in the future - as above, access through the TRADING TOOLS on the CBOE.com home page.

3. Wall Street Survivor - Although you can't actually trade options, this is still a good free practice trading choice for several reasons:

• Easy to use
• Cash prizes and redeemable Loyalty Points available
• Tons of educational resources, including articles and video tutorials
• Lots of community and forum resources available

One thing I wasn't aware of when I first signed up, however, is that you actually have access to two separate accounts. There's the contest account that qualifies you to win weekly and monthly prizes, and then there's a "permanent" account that won't enable you to win any prizes but it doesn't ever get reset either (unless you choose to reset it).

Also, there's a limit to how much of your account balance (you start with a $100K margin account for both the contest and permanent accounts) you can place in any one trade, so it prevents someone from maxing everything out on one stock and then getting lucky. This helps to reward skillful trading over lucky trading.