Can Options traders stick with only a handful of stocks?

[RGLD]

What I've learned about options is there is no strategy where it won't let you profit from any market condition. Even if stocks with low vega, you can do Iron Condors or Butterflies to take advantage. The only difference is the vega between the buy and sell prices that dictate a "good" trade.

To take this theory to the extreme, do you think you can stick with ONE stock? And just put options around it and profit? Less research.

 

[tommcginnis]

It's be great to do all of that options stuff without worrying at all about the 'business' itself -- *that* would be sweet trading. For sure, for sure. Just ONE magic stock....NO research at all....
How could we do that?

 

[ironchef]

To take this theory to the extreme, do you think you can stick with ONE stock? And just put options around it and profit? Less research.

Yes and yes.

 

[RGLD]

It's be great to do all of that options stuff without worrying at all about the 'business' itself -- *that* would be sweet trading. For sure, for sure. Just ONE magic stock....NO research at all....
How could we do that?

You obviously never heard of traders who only trade the S&P... Nothing magical about that.

It's sweet to NOT have to research the fundamentals. What's the point? Your loss is fixed and whatever fundamentals you find might not take effect until the options expire or time decay eats so much of it, that you'll break even if you're right. Or if you plan to use call/put spreads during earnings, how the stock re-acts to good or bad numbers are completely arbitrary as well.

 

[destriero]

I follow less than 30.

 

[ironchef]

You obviously never heard of traders who only trade the S&P... Nothing magical about that.

It's sweet to NOT have to research the fundamentals. What's the point? Your loss is fixed and whatever fundamentals you find might not take effect until the options expire or time decay eats so much of it, that you'll break even if you're right. Or if you plan to use call/put spreads during earnings, how the stock re-acts to good or bad numbers are completely arbitrary as well.

There are major differences between trading indices vs trading individual underlying.

With indices, you essentially make macro bets. Trading individual equity you bet on idiosyncratic. In either case, there is no edge randomly/mechanically buying or writing options. One still needs a correct opinion to make money.