Options anyone?

[PrideofSA]

I'm an options trader in the US markets and am making money in all market conditions....up, down and sideways.

Anyone else doing this too?

 

[BB gun]

I'm an options trader in the US markets and am making money in all market conditions....up, down and sideways.

Anyone else doing this too?

really, I don't understand options. But going long in a couple CCL options sounds appealing? What do you think?

 

[bunsen burner]

It annoys when I see ads targeting mum & dad investors that claim options trading is easy, low risk, and lucrative. Options trading should be for experienced stock market investors or for people who have had some sort of financial training. Options simply magnifies profits or losses. It can be equally disastrous as it is lucrative.

 

[PrideofSA]

It annoys when I see ads targeting mum & dad investors that claim options trading is easy, low risk, and lucrative. Options trading should be for experienced stock market investors or for people who have had some sort of financial training. Options simply magnifies profits or losses. It can be equally disastrous as it is lucrative.

I've actually never bought a share in my life and after discovering and learning options (always still learning more) i willl never buy a share in my life.

Options (if done correctly) can be great for limiting your risk and increasing your profits, but you have to know what you are doing. And yes anyone can learn it, as long as they are disciplined and take the emotion out of the trade.

First we always look at risk, and risk graphs before entering a trade. 2nd you must always have an exist plan before you enter. You should never be in a trade and wondering when you are going to get out...you should know before hand.

Also lastly, money management is the biggest thing with any form of investment, because if you win only half the time, but have good money management, you will profit more on the wins than you will lose on your losses.

Thats just my experience, however as i said, i am always learning. Be glad to hear what others experience in options is. because i think anything that is unknown is generally feared. Oh and i only trade US markets because of liquidity. The ASX is not liquid enough for options.

 

[BB gun]

. Oh and i only trade US markets because of liquidity. The ASX is not liquid enough for options.

If you take that attitude the ASX will always remain that way

 

[PrideofSA]

If you take that attitude the ASX will always remain that way

lol thats true, but there isn't enought options to choose from yet and i can't guarentee there will be a buyer when i want to sell, it's just the way it is at the moment...and i am definitely hearing what you are saying though

 

[bunsen burner]

I've actually never bought a share in my life and after discovering and learning options (always still learning more) i willl never buy a share in my life.

Options (if done correctly) can be great for limiting your risk and increasing your profits, but you have to know what you are doing. And yes anyone can learn it, as long as they are disciplined and take the emotion out of the trade.

First we always look at risk, and risk graphs before entering a trade. 2nd you must always have an exist plan before you enter. You should never be in a trade and wondering when you are going to get out...you should know before hand.

Also lastly, money management is the biggest thing with any form of investment, because if you win only half the time, but have good money management, you will profit more on the wins than you will lose on your losses.

Thats just my experience, however as i said, i am always learning. Be glad to hear what others experience in options is. because i think anything that is unknown is generally feared. Oh and i only trade US markets because of liquidity. The ASX is not liquid enough for options.

That sounds like it's straight off the get rich scheme phamplet. I'd be wary. I used to work with options and had a lot of contacts with brokers. If it was easy as some of these marketing people make out then all the brokers would be retired. Options is just a way of trading shares with greater risks and greater rewards.

 

[BB gun]

what the difference between warrants and options

 

[bunsen burner]

lol thats true, but there isn't enought options to choose from yet and i can't guarentee there will be a buyer when i want to sell, it's just the way it is at the moment...and i am definitely hearing what you are saying though

Interested in knowing what strategies you most often use? Write calls, buy puts, buy calls, write puts, or more sophistcated stategies such as spreads and straddles?

 

[bunsen burner]

what the difference between warrants and options

http://www.asx.com.au/markets/pdf/DiffOptWnts.pdf

 

[BB gun]

http://www.asx.com.au/markets/pdf/DiffOptWnts.pdf

cheers

 

[PrideofSA]

Interested in knowing what strategies you most often use? Write calls, buy puts, buy calls, write puts, or more sophistcated stategies such as spreads and straddles?

Debit Spreads (ie Bull Call Spread or Bull Put Spread) & Calendar Spreads (for sideways markets - which is IMO the best ones to do) as well as simple calls and puts

If you look at risk graphs though you will see they are lower risk than simply buying stock, and you get a greater ROI.

Also knowing what makes the price of the option helps. Like volatility, time value as well as intrinsic value. In particular don't be on the wrong side of volatility and time value. (most people buy options at the time of greatest time decay ie 30 days to expiration, which is why they are considered risky, simply people just aren't educated on how to use them to their potential

Also the volume of the underlying asset (stock usually) as well as the open interest on the options for it have to be above a certain amount, otherwise liquidity may be a problem.

Also most brokers don't know much about options either, because they don't have to know much. Using a broker that has a great understanding of options really helps. Don't just go for the broker that charges the lowest commission.

 

[bunsen burner]

Debit Spreads (ie Bull Call Spread or Bull Put Spread) & Calendar Spreads (for sideways markets - which is IMO the best ones to do) as well as simple calls and puts

This is all well and good but how do you personally know if it's a bearish or bullish market or somewhere in between? Do you do the research yourself or do you get help?

If you look at risk graphs though you will see they are lower risk than simply buying stock, and you get a greater ROI.

Certainly greater (much greater) ROI but at the same time the greater LOI (is that an actual term?).

Also knowing what makes the price of the option helps. Like volatility, time value as well as intrinsic value. In particular don't be on the wrong side of volatility and time value. (most people buy options at the time of greatest time decay ie 30 days to expiration, which is why they are considered risky, simply people just aren't educated on how to use them to their potential

I assume you go through the NYSE? The usually set the prices of options at staggered amounts above and below the current market price right? And set the premiums?

A few questions:

Where do you get your info from? i.e. how did you learn

How long have you been doing it for?

How successful have you been?

And can I assume if you write a call and it gets excercised you have the funds set aside to go buy the stock?

 

[morgoth]

Pride of SA, there is ALWAYS a market. Market makers are appointed (as they are in the US), prices may not always be fair but you can always buy and sell on the ASX Options market.

What are you doing spreads, straddles etc?

 

[bunsen burner]

Pride of SA, there is ALWAYS a market. Market makers are appointed (as they are in the US), prices may not always be fair but you can always buy and sell on the ASX Options market.

What are you doing spreads, straddles etc?

The ASX has been trying to promote options for a few years now. They often do a run around to many financial companies and invite the brokers (and anyone else who wants to go) down to the ASX for an options seminar. Options just hasn't really taken off in this country. As far as I know options are only offered on a limited amount of stocks in Australia.

 

[morgoth]

Yep due to liquidity in the underlying stocks although you can get a European option on just about anything (cost can be high though).

Warrants are the laymans option and they are used a lot.

 

[PrideofSA]

This is all well and good but how do you personally know if it's a bearish or bullish market or somewhere in between? Do you do the research yourself or do you get help?[/font][/color]

Certainly greater (much greater) ROI but at the same time the greater LOI (is that an actual term?).

I assume you go through the NYSE? The usually set the prices of options at staggered amounts above and below the current market price right? And set the premiums?

A few questions:

Where do you get your info from? i.e. how did you learn

How long have you been doing it for?

How successful have you been?

And can I assume if you write a call and it gets excercised you have the funds set aside to go buy the stock?

I do my own research on and have some good software for this kind of thing. I get to know patterns in stock and many other rules that you develop and learn to follow.

I trade on any of the US Markets, i just pick whatever stocks come up for the day in my searches on the software, i don't have to even know which market the stock is in.

yeh they do set the premiums as well as the strike prices which are usually in $5 dollar increments above and below the stock price. But also knowing delta and how that effects the price of the option helps to decide which strike prices to go for, ie In the money, at the money or out of the money.

Haven't been doing it long, but the more i learn, the more successful i am becoming. I have done some options courses, which include books, dvd's etc, and have friends that are very successful in options trading too.

I never get exercised on a stock, because i'm never in within the last 30 days before expiration as time decay will eat you alive, however if i am selling options then this is a good time to be in, but never naked, i always have a buy side to cover the risk, which is what a calendar spread does.

 

[bunsen burner]

I do my own research on and have some good software for this kind of thing. I get to know patterns in stock and many other rules that you develop and learn to follow.

I trade on any of the US Markets, i just pick whatever stocks come up for the day in my searches on the software, i don't have to even know which market the stock is in.

yeh they do set the premiums as well as the strike prices which are usually in $5 dollar increments above and below the stock price. But also knowing delta and how that effects the price of the option helps to decide which strike prices to go for, ie In the money, at the money or out of the money.

Haven't been doing it long, but the more i learn, the more successful i am becoming. I have done some options courses, which include books, dvd's etc, and have friends that are very successful in options trading too.

I never get exercised on a stock, because i'm never in within the last 30 days before expiration as time decay will eat you alive, however if i am selling options then this is a good time to be in, but never naked, i always have a buy side to cover the risk, which is what a calendar spread does.

Interesting.

When I was working with options I seriously considered getting into it, but the more I looked, the more it looked like gambling. Am considering looking into it again and reassessing. Where did you get your software from?

 

[PrideofSA]

Interesting.

When I was working with options I seriously considered getting into it, but the more I looked, the more it looked like gambling. Am considering looking into it again and reassessing. Where did you get your software from?

Yeh well i mean, i know all the risk b4 entering, so i never consider it gambling.

I'm not saying at all that options is the only form of investment that can work well, i think, and i am still learning, that it's all about mind set.

I'll recommend 1 book to you tho,

"Trading in the Zone" by Mark Douglas

also, all successful people believe in investing in education, saying that, it's not the cheapest book around, but it's well worth it. It's like $60 or something

 

[skipper kelly]

 

[PrideofSA]

So what do u reckon then? Think you may look into options are bit more or still a bit unsure?

 

[bunsen burner]

So what do u reckon then? Think you may look into options are bit more or still a bit unsure?

Maybe. I might go out and purchase that book.

 

[PrideofSA]

Maybe. I might go out and purchase that book.

yeh, the book is great, however it's not gonna teach you about options, rather the mindset behind being a successful trader.

Good luck anyhow

also good luck for your team on Sunday against us, should be a good game.

 

[likka]

Yeh well i mean, i know all the risk b4 entering, so i never consider it gambling.

I'm not saying at all that options is the only form of investment that can work well, i think, and i am still learning, that it's all about mind set.

I'll recommend 1 book to you tho,

"Trading in the Zone" by Mark Douglas

also, all successful people believe in investing in education, saying that, it's not the cheapest book around, but it's well worth it. It's like $60 or something

Thanks for all the info.

What software do you use?

 

[TheBloods]

Options are not necessarily a high risk strategy - they can also be low risk.

If you concentrate mainly on buying rather than writing them then your downside is limited.

The potential for magnifying losses and gains equally really applies more to futures.