Daytrading options

smallfil · Apr 3, 2023

earth_imperator said:
I was talking of the option premium, not the stock price.

That was what I was talking about. When I traded NVDA it had premiums $5-$8 per contract (that is $500-$800 per contract). I passed on times it was over $8. Now, it cost thousands for 1 contract.

Temujin79 · Apr 4, 2023

Trading options especially day trading options just doesn't work, the risk/reward is abysmal. If I am a long term investor or some kind of swing trader sure maybe that makes sense to throw in a protective put and covered call, otherwise... I can't seem to see the value in day trading options.

earth_imperator · Apr 4, 2023

Temujin79 said:
Trading options especially day trading options just doesn't work, the risk/reward is abysmal. If I am a long term investor or some kind of swing trader sure maybe that makes sense to throw in a protective put and covered call, otherwise... I can't seem to see the value in day trading options.

What's the mean reason against daytrading options, compared to daytrading stocks or ETFs or indices?

Temujin79 · Apr 4, 2023

day trading something that has a reputation of "picking pennies before a steam roller" won't work in the long run.

earth_imperator · Apr 5, 2023

@Temujin79, your above 2 silly statements indicate that you have no clue about options.
Read first some literature on options, and only then come back to such discussions about options.

Temujin79 · Apr 5, 2023

I am new to options but I just don't like the risk/reward picture. I thought I would like to do box spreads but the commission and fees beats the crap out of that setup. Can any of you recommend a strategy that is very safe with very low return?

earth_imperator · Apr 5, 2023

Temujin79 said:
I am new to options but I just don't like the risk/reward picture. I thought I would like to do box spreads but the commission and fees beats the crap out of that setup. Can any of you recommend a strategy that is very safe with very low return?

With options it's possible to tailor your desired risk/reward yourself by combining options with different strikes etc.
For example study this strategy called LongButterfly: https://optioncreator.com/long-butterfly
It consists of 1 short option and 2 long options. It gives a certain guarantee: a win zone in the middle, and losses are capped at both sides.
So, with this strategy there is no unlimited loss. Ie. one has full control over the loss in advance.

Temujin79 · Apr 5, 2023

futures-options-strategies_long-butterfly-example_540x300.jpg

I am thinking something like this, thank you for your suggestion. I can't seem to make the pyramid flatter, I don't need much profit I want the pyramid to spread wider and lower. Can you give me an example for a particular stock?

getthatintoya · Apr 5, 2023

Temujin79 said:
I am thinking something like this, thank you for your suggestion. I can't seem to make the pyramid flatter, I don't need much profit I want the pyramid to spread wider and lower. Can you give me an example for a particular stock?

long 50 put short 51 put short 57 call long 58 call will give you what you ask for.

earth_imperator · Apr 6, 2023

Temujin79 said:
I am thinking something like this, thank you for your suggestion. I can't seem to make the pyramid flatter, I don't need much profit I want the pyramid to spread wider and lower. Can you give me an example for a particular stock?

See this: https://optioncreator.com/steli10
It has a risk/reward of about 1.10 : 3.90, ie. about 1 : 4, but one has also to consider the probabilities for each of the 2 cases...