I have been paper day trading penny stocks for a couple of months now and have been succesful but I want to explore some different sources of possible income. Options day trading is far more confusing than stocks and I cant find as much info on youtube so if anyone can please help I would be very thankful. I buy a call option of (XYZ-$150) for $9.50 in the money $5 at the money and $2.50. Does the strike price have to be below the stocks trading price in order for me to sell for a profit or can I sell either one for a profit when the price has went up. Also how do I calculate profit in options?
Day Trading Options
- Thread starter blackafro2468
- Start date
Two places online to start with options education are the web sites for the CBOE (Chicago Board Options Exchange) and OIC (Options Industry Council-option education program). I think you will find these to be a much more credible source of information than random youtube drivel.
Best of luck - Lou
Lots of articles and youtube videos out there that will explain all your questions. These are very basic. But you can sell an option whenever you want. However options are not linear. Just because the stock moves does not mean the option will move by the same amount.
Why would anyone on their right mind "day trade" anything. Let alone options. The bid/ask is gigantic and they use little balance sheet. Literally the worst product to "day trade", with the caveat that "day trading" is idiotic across the board and only benefits the brokers through higher commissions. You're basically "trading" noise -- it's glorified gambling. Unless you're a market maker and they still hold overnight balances and are considerably more diversified than the average "day trading" bozo.
You can't be that successful trading penny stocks, if you're looking for something else more fruitful.
Options day trading is not that much different from penny stocks, or day trading or trading any other instrument or symbol.
The bottom line stems on your ability to predict its future movement. and/or manage it and your personal risk.
If the strike price is below the trading price, then the option is considered useless. and/or vice versa with a bearish, Put bet.
You should really read a basic option trading book or two, and websites...these all will really answer your basic, fundamental option trading questions. -- You sound absolutely new and confused.
Fortunately, once you learn it...this game can be a breeze,
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Day trading options typically is only on weekly options or on earnings days.
You are looking for stocks that move and otm options that are cheap. Fridays are most volatile as the option is pretty close to the trading price, but this is what you want.$150 stock drops to 148 you look at the 150 call or of it runs up to 152 you look at the 150 put. The cost of the option is critical if you have a $2 flat then great. Ten cent options on a Friday can go to 50 cents for a 5x. Some of the big movers NFLX AMZN NVDA are expensive but if you call it right make a lot of dough. VXX is pretty good and is good place to start.
You are looking for stocks that move and otm options that are cheap. Fridays are most volatile as the option is pretty close to the trading price, but this is what you want.$150 stock drops to 148 you look at the 150 call or of it runs up to 152 you look at the 150 put. The cost of the option is critical if you have a $2 flat then great. Ten cent options on a Friday can go to 50 cents for a 5x. Some of the big movers NFLX AMZN NVDA are expensive but if you call it right make a lot of dough. VXX is pretty good and is good place to start.