Day Trading Options

Robert Morse said:
IMO, less critical for scalping more for longer hold times or after a large change.
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Thank you. I seem to be quickly re-learning the craft, thanks to you. But I have a ways to go before I dive back in. Stocks with unusual volume and volatility are my bread and butter.

One more question, do you have a totally different style from Dustin? I only ask because I've seen you post on his threads. Put another way, do you not look for a 10/1 reward to risk ratio?
 
I do not know who "Dustin" is. I was an option market maker but now I only trade in my Roth IRA. I use options to reduce my cash usage and reduce risk and pick a direction, or to hedge after a large move in my favor.

jnbadger said:
Thank you. I seem to be quickly re-learning the craft, thanks to you. But I have a ways to go before I dive back in. Stocks with unusual volume and volatility are my bread and butter.

One more question, do you have a totally different style from Dustin? I only ask because I've seen you post on his threads. Put another way, do you not look for a 10/1 reward to risk ratio?
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jnbadger said:
Thank you. I'm a pure day trader in my prop account, but I've been trading more options lately in my Roth with TDA, which is obviously just cash and no leverage. I got lucky earlier this week by buying NKE OTM calls for .10 and sold them for .50 yesterday. I knew it was a stupid risk, because as Dustin says, 5,1 will not get you anywhere in the long run in the options market. But, sometimes I need to let off a little steam with very little money by doing something silly.

Who was it in one of the Market Wizards books who said (paraphrasing) he would take his big trades seriously, but the other trades just kept him amused?
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My second cousin read The National Enquirer for 30 years. He was a very successful business man...Died at 101. He read the Wall Street Journal every day. He call it his "main meal". He read the Enquirer...He called it "dessert"!!
 
Cabin111 said:
My second cousin read The National Enquirer for 30 years. He was a very successful business man...Died at 101. He read the Wall Street Journal every day. He call it his "main meal". He read the Enquirer...He called it "dessert"!!
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Wow, I wander if you got a chance to pick his brains. Any lessons that you can share?
 
qlai said:
Wow, I wander if you got a chance to pick his brains. Any lessons that you can share?
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So many, but I'll just give you one. He was a grower of melons. He bought farmland cheap. He then developed packing sheds and had a very good working relationship with suppliers and grocery store chains. He controlled the whole chain to market.

Was thinking of the Apple store or Gallo wines. With Gallo...Over 1/2 the wines on the shelf are Gallo, even though they say another name. Be dominate, control the supply chain and you should do well...

A similar situation...I own stock in Meritor (MTOR). They are getting bought out by Cummins (CMI). You could have business schools study supply chain synergy on this move...
 
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tradingpoker said:
Humour me please, as this may sound like a silly question for some of you. But I still want to here your answers.

I would day trade ITM options because?

I would not trade ITM options because?

I would day trade OTM options because?

I would not trade OTM options because?

Thank you for your time and answers
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My trading strategy of options has evolved over the last 17 years. I usually like to own some stock of that option. To answer your question.
I trade directional only OTM with a lot of runway. It doesn't mean I hold for that long. I just don't like getting burned by theta. I aim for a delta in the mid 30's with a robust gamma. Tight bid/ask is crucial, and OI has to be high. Lots of 50 to 100 at a time give a nice profit on small price movement.
 
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