I am a beginner, so I'm looking for some guidance in Options Trading.
Can anyone guide me with few basics of Options Trading
- Thread starter kyliebrow786
- Start date
Hone your ability to predict, or manage, the future,
That's what trading is all about in a nutshell, -- And it is one big ass nutshell you have to crack, if you're just starting out from scratch,
This may not be the simple, quick, easy answer you may be looking for -- but the good, or correct, one is the road less traveled, or of the toughest resistance,
Most people enter this trading game thinking they will be driving a Porsche by next month, and more than 99% are gone by next month,
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Robert Morse
Sponsor
Here are two places to get started.
https://www.lightspeed.com/trading-education-center/
http://www.cboe.com/education/education-main
The learning curve for options is very steep, and your gains (or losses) will come from places you don't even recognize even with a command of the knowledge from Options 101 type websites.
What's your trade experience? I tend to suggest that if you're good enough with price action, stay with that, because the only thing options will offer is leverage and higher risk. And if you're looking to use options for leverage, it's just a fancy way of saying you're over leveraged.
Which brings me to: Why do you want to trade options?
If you don't have a working, expert understanding of VOLATILITY as a dynamic component of price and THETA as a component of "time to be right" you should not trade options. As far as the learning curve goes it's long and steep and never quite ends. As a comparison, think of Frank Morris (Clint Eastwood) in the movie Escape From Alcatraz.
Watch this movie and every time someone says "Alcatraz" you hear "Equity Options."
Good luck...
Watch this movie and every time someone says "Alcatraz" you hear "Equity Options."
Good luck...
Welcome.
Many of us who trade options in the current bull market ( since 2009) confuse the bull market with our option trading skills. Options are leveraged instruments so in an up market, it multiplies your profits. When this bull run is over, it will multiply your losses. When it ends, the way I trade, I will be in a lot of hurt unless I quit now.
If you still want to do it, like Bob Morse recommended, read from a few educational websites but don't pay a lot of money buying services or expensive courses. None worked very well from feedback from my friends who did.
For me, I cut my teeth reading Larry McMillan's book and Sheldon Netenberg's book and got the basics first. Then I started with covered calls and cash secured puts based on my bet of the direction of the underlying.
Good luck.
Many of us who trade options in the current bull market ( since 2009) confuse the bull market with our option trading skills. Options are leveraged instruments so in an up market, it multiplies your profits. When this bull run is over, it will multiply your losses. When it ends, the way I trade, I will be in a lot of hurt unless I quit now.
If you still want to do it, like Bob Morse recommended, read from a few educational websites but don't pay a lot of money buying services or expensive courses. None worked very well from feedback from my friends who did.
For me, I cut my teeth reading Larry McMillan's book and Sheldon Netenberg's book and got the basics first. Then I started with covered calls and cash secured puts based on my bet of the direction of the underlying.
Good luck.
anyone trade calendar spread? is it a profitable strategy?
Robert Morse
Sponsor
victorycountry,
IMO, you should not set out to do any particular spread, unless your focus is on credit spreads. You should examine each symbol, determine where you thing a stock will trade or not trade over a time period, then choose the best strategy given current options prices that best maximize profits for a given risk level.
Bob
IMO, you should not set out to do any particular spread, unless your focus is on credit spreads. You should examine each symbol, determine where you thing a stock will trade or not trade over a time period, then choose the best strategy given current options prices that best maximize profits for a given risk level.
Bob
I leg into calendar spreads incidentally when I walk my strike up to the long side (or past it) of the diagonals I'm playing. I'm also toying around with them as a "from-jump" position...I see how they could work, but they're not intuitive at all, and very dependent on a good fill of your entry and exit order. Very few symbols have the liquidity for the strategy to work. You might want to play with it with money you can accept losing as a "learning expense" to see how they work.
@tommcginnis is the guy to ask about this. I've been playing with them for about a month now, and they're still a little baffling to me.
Figure out how they work, and file them away as one of many strategies to employ when market conditions warrant.
@tommcginnis is the guy to ask about this. I've been playing with them for about a month now, and they're still a little baffling to me.
Figure out how they work, and file them away as one of many strategies to employ when market conditions warrant.
At one time I bought a book by a fellow named Terry. He specialized in calendar spread and claimed it was like printing money, easily 36% return a year. Well, as beerntrading said, it is actually very tricky to trade and I was never able to trade them profitably. Sometimes I ended up legged into them but not by choice.
If you are new to this game, try something else first.
Regards,