Directional Option trades

Quote from rfriend73:

The responses on here indicate that intraday option trading is not very viable, efficient and has too many variables associated with it too be consistently profitable.. Also that the underlying should be traded instead..I whole heartedly agree.. but for the small retail trader with a 10K acct and not associated with a prop firms resources, then what is the alternative ?
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Account size is whatever it is.
Take the leverage if you are willing to take the extra risks. If you aren't then trade with the size you have.
 
Quote from rfriend73:

The responses on here indicate that intraday option trading is not very viable, efficient and has too many variables associated with it too be consistently profitable.. Also that the underlying should be traded instead..I whole heartedly agree.. but for the small retail trader with a 10K acct and not associated with a prop firms resources, then what is the alternative ?
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Spreads.
 
With $4500 today, I had the leverage of 10,000 shares or approx $315,000 worth of the stock at market value. I don't have near that in my account. I was able to make a $900 return off the $4500, and it took a 20 cent down move in the stock.

You are correct in that if I had the cash to buy the stock position instead of the equivalent amount of options I would have been able to make a larger profit around the $2000 mark though, but I don't have that kind of money to trade with. I am only 21 for Pete's sake! haha
 
Quote from FCXoptions:

I have taken two trades in the past two days, one each morning once I see a setup occur. Yesterday I sold WAAAYYY too early, I took a $350 gain instead of a $6000 one by about 30 minutes, but still a profit. Today I took a $914 profit after commission. I made it a point to hold longer as long as my setup was valid still.

My issue has been getting nervous once the trade runs a few hundred in my direction and closing it out quickly out of fear it is going to reverse. Today I held significantly longer and it paid off considerably.

What made me blow up last year, was I would cut the winners short and let the losers run. It worked great for 4 out of 5 days, but the one day a week I was wrong would wipe out all the gains plus considerably more. Averaging down and "knowing it would come back" was my downfall.
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you have to decide which time frame is trending, if you curve fit different time frames you will get killed. Personally I have learned not to fade the weekly time frames. Pick your frame and trade it, es really close to rolling over here on the weeklies, I am watching 148 on spy till then its a dip.
 
Today I actually did have a temporary issue with a wide spread, if I had set a tight stop I would have taken a pretty bad loss for the day. Price reversed on me quickly and gapped about 5-10 cents two times and the spread was like .33/.41 which would have killed me. But the setup was still intact so there was no reason to bail on the trade. Price returned within a couple minutes back to my break even and then some. But to those who said the spreads will kill you, when the market moves fast like that you are definitely right.
 
Quote from FCXoptions:

With $4500 today, I had the leverage of 10,000 shares or approx $315,000 worth of the stock at market value. I don't have near that in my account. I was able to make a $900 return off the $4500, and it took a 20 cent down move in the stock.

You are correct in that if I had the cash to buy the stock position instead of the equivalent amount of options I would have been able to make a larger profit around the $2000 mark though, but I don't have that kind of money to trade with. I am only 21 for Pete's sake! haha
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if you are trading this big, you will probably eventually blow up. the education you receive in the process might make it worth it.
 
Quote from newwurldmn:

if you are trading this big, you will probably eventually blow up. the education you receive in the process might make it worth it.
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Haha, I am not really getting back into the options game right now. I just took a couple trades trying out some setups. But you are right on that size. I realized that today. I will more than likely cut back my position sizes a decent amount (about half) so I can feel much safer letting a position run for a little bit.
 
I am not going to be taking this trade in real money I just did it in my optionshouse paper account but what do you all think of this:

Buy $26.00 put on VXX
Sell $25.50 put

Total debit of .31 cents at last look. Max profit of 19 cents. All you need is VXX to stay exactly where it is at through friday or go down...just not up lol
 
the issue of liquidity, spreads, etc can be eliminated by only trading the highest volume options. there are hundreds of stocks w/ options that have a b/a spread less than 5%.
 
Quote from FrankSlaughtery:

the issue of liquidity, spreads, etc can be eliminated by only trading the highest volume options. there are hundreds of stocks w/ options that have a b/a spread less than 5%.
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Already done..I trade 4 stocks whose options have a .01 BA spread, underlying trades over 5 million daily shares and ATM option trades over 1000 contracts a day...
 
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