Day trading Options (best option?)
- Thread starter tradingpoker
- Start date
"Using Options as Shares of Stock" - Article
https://www.elitetrader.com/et/thre...u-like-post-it-up.356297/page-14#post-5573460
The second I heard someone talking about day-trading options, I cringe knowing that 98% of them don't even understand all the wash-trades they are doing. The IRS may come up to bite you big-time.
Seems really none of the youtube self-declared mensa-trading geniuses even talk about it, and I bet they aren't even aware either.
Thanks for the heads-up
Do you have any helpful information for us?
From where did you get your knowledge of the wash-trade implications of day-trading stock options?
Do you have a link?
Is it different from the same risk associated with stocks?
What is different?
How is a trader to avoid the pitfalls?
"Splain it to us or direct us to link or authorative information?
-
Meanwhile...
Here are a couple of links that delve into that dark night...
ET search:
https://www.elitetrader.com/et/search/13962356/?q=wash+sale&o=date&c[title_only]=1
Last edited:
Discussion in 'Journals' started by Dustin, Jul 16, 2021.
"I love short-dated options as a way to play my hunches in an extremely leveraged fashion. My trades can last hours or days depending on the setup and day of the week when the setup presents itself. My top 20 trades this year account for >70% of my year.?
https://www.elitetrader.com/et/threads/trading-as-an-art-form.360259/
"I love short-dated options as a way to play my hunches in an extremely leveraged fashion. My trades can last hours or days depending on the setup and day of the week when the setup presents itself. My top 20 trades this year account for >70% of my year.?
https://www.elitetrader.com/et/threads/trading-as-an-art-form.360259/
ITM options will always give you more consistency over OTM options but if the underlying makes a big move in either direction you'll lose more or make less vs OTM.
Example. Would be during an earnings release. If you bought deep ITM and it completely goes in the opposite direction you just loss full investment on the more expensive premium vs losing full investment on cheap OTM lottos.
There is too many variables when to choose ITM vs ATM vs OTM.
You just need to experiment and find out what works best for the type of options your playing.
Also, worth noting the deeper we get ITM for options the more illiquid the volume tends to be. Like 90% of options won't even have volume on ITM calls esp during the 1st hour which makes daytrading them more difficult.
Example. Would be during an earnings release. If you bought deep ITM and it completely goes in the opposite direction you just loss full investment on the more expensive premium vs losing full investment on cheap OTM lottos.
There is too many variables when to choose ITM vs ATM vs OTM.
You just need to experiment and find out what works best for the type of options your playing.
Also, worth noting the deeper we get ITM for options the more illiquid the volume tends to be. Like 90% of options won't even have volume on ITM calls esp during the 1st hour which makes daytrading them more difficult.
Last edited:
There arent really that many variables if you "understand" a terminal payoff of a backspread vs a ratio....Im assuming that traders trade equal delta or equal dollars on ITM vs ATM vs OTM..
Its really a question of how much gamma you want,and what you can stomach as far as a winning percentage...
Its not complicated
Its really a question of how much gamma you want,and what you can stomach as far as a winning percentage...
Its not complicated
Unfortunately, I don't have a clue when it comes to spreads.
My broker doesn't provide that level of access.
Therefore, I have never even bothered to look into them!
Lets say a stock is trading at 100...
1 week 100 call trades for 4
1 week 105 call trades for 2
You have 8 dollars to invest and will hold for 1 week
If you think the stock is going to 105,what would you buy??
If you think its going to 110,what would you buy??
If you think its going to 115 or higher,what would you buy??
1 week 100 call trades for 4
1 week 105 call trades for 2
You have 8 dollars to invest and will hold for 1 week
If you think the stock is going to 105,what would you buy??
If you think its going to 110,what would you buy??
If you think its going to 115 or higher,what would you buy??
You should stay at level 1 with your broker.
DO NOT PASS GO...DO NOT COLLECT 200 DOLLARS!!