Best Options for day-trading...

I must be a glutton for punishment :)

Trade whatever option you can make money with. It makes no difference what other people trade or how they trade or the size of their trades. What matters is that you select the strategy that is appropriate for your risk tolerance on stocks that you can time within the framework of the options. It's as simple as that :)

PS If RIMM is down 4 points then you've identified a stock that you should have shorted (wink)
 
I day trade with IWM options. Their spread ATM is usually 1-2 cents. You need to make sure you are willing to loose 20-50% since the delta is usually 40-50%.

It all workout about the same if you control a your risk in terms of dollars. Lets say you want to make $1000.

On IWM you have to expose $75k for a 1 point move == $1000.

On ATM option (approx) the same point assuming ATM is $2.00 and Delta is 0.45. You will need a to purchase 20 contracts == $4,000 exposure. The same point would of bring you about $0.90.

Lets say it moves gainst you 1 point, then you are down $1000 on the IWM. In the ATM option you are proabaly down about $1,800 before "oh shit" comes up.

Consider the -$800 a premimum for only exposing $4k (instead of $75k) and the chance that you if you are directionally right you would of make much more than $1000 without having to expose 75k. You can use the 70k left for other opporunities.

Since you are not holding this thing too long volatility is not usually a big concern. Neither is theta depending when you do this.

If I had $75MM then I would probably use the options just to hedge since $75k is a small piece of the pie.
 
Quote from samuelg:


- penny priced options with high volatility like RIMM & AAPL
- penny priced options with lower volatility & lower stock price (<$50) like CSCO, MSFT, etc
- penny priced options with lower stock price + higher volatility like YHOO, C & DNDN
- penny priced ETF options like QQQQ, SPY, XLF, IWM, etc
- highly volatile stocks like DRYS, FSLR, BIDU
- any others?
More...

here is the thing i dun't think u trade it the same way on msft and spy and aapl and all make good money,those stock r all characteristic.

let me tell u a story:one crazy guy in our company always put orders against market trend on stocks like MSFT /INTC / CSCO etc,and he made good money.but he nerely trade QQ /BIDU that way c'z it's expose urself under hudge risk.while MSFT /INTC / CSCO doesn't.

so£¬it's smart to do whatever makes you money.
 
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