Does anyone make a living using straight directional trades ?
- Thread starter rfriend73
- Start date
Straight options on SPY a few strikes OTM with the right expiry are basically the same as futures for daytrading... Higher commissions and spread though.
The only advantage directional options have over futures is the weekly options have insane leverage for catching a high odds setup...
Id recommend futures over options if you have a account size over 100k. Otherwise options are better for catching large moves as they can take the heat.
The only advantage directional options have over futures is the weekly options have insane leverage for catching a high odds setup...
Id recommend futures over options if you have a account size over 100k. Otherwise options are better for catching large moves as they can take the heat.
You should read the section called... MY OPTION TRADES.
I used to do spreads, and now I'm doing cash secured and naked put selling.
It's NOT for everyone, but I'm comfortable with it.
I feel I have the self discipline not to be greedy. And to use the proper criteria of L-T tech analysis and intelligent fundamental analysis, to do it reasonably wise and safely.
As a side note. Just got back from seeing Batman. Thought it was a big waste of time. Long, boring and a stupid story.
I used to do spreads, and now I'm doing cash secured and naked put selling.
It's NOT for everyone, but I'm comfortable with it.
I feel I have the self discipline not to be greedy. And to use the proper criteria of L-T tech analysis and intelligent fundamental analysis, to do it reasonably wise and safely.
As a side note. Just got back from seeing Batman. Thought it was a big waste of time. Long, boring and a stupid story.
Clearly you aren't a true fan of the caped crusader! I enjoyed it though. Bane's voice wasn't quite what I was expecting though and I think Charlize Theron should have played cat woman. But I enjoyed myself.
Sorry to go off topic!
Directional trading, yes and no. I have made and lost a good bit doing it. Then wins are awesome and the losses awful if you aren't careful. Don't trade big sizes on weekly options on a Friday that is for sure unless it's in the money. If your wrong you will lose so much so fast on expiration day.
I was a fan of the series. I just thought this one was too long and too boring,... and with a story that was all over the place, and too stupid to be believeable. I even thought the acting by a lot of the characters was silly and not believeable.
As for doing weekly options, I've never done them.
Mostly because I'm pretty picky when it comes to stock and strike selection.
So when I finally see something the looks good, I'm not going to waste the opportunity picking up a puny credit on a weekly.
Good stocks offering good strikes, don't often stay at such good value for long. Hence I prefer to get as much credit as i can from them, over a 4 - 6 period.
The annualized % return looks really good on those weeklies.
But the dollars suck.
When i go shopping, stores and hookers want to be paid in dollars. Not percentages.
And unless you go from week to week with either no gaps or few trading gaps, those frequent gaps between weekly trades, will eventually cut into your dollar and % return at year end. Not to mention all those extra commissions.
However, if you're more into trading volatile, and unstable crap, which pays much better premium than the more reasonable valued quality companies,... then i agree weeklies may be the place to be.
Get in and get out.
As for doing weekly options, I've never done them.
Mostly because I'm pretty picky when it comes to stock and strike selection.
So when I finally see something the looks good, I'm not going to waste the opportunity picking up a puny credit on a weekly.
Good stocks offering good strikes, don't often stay at such good value for long. Hence I prefer to get as much credit as i can from them, over a 4 - 6 period.
The annualized % return looks really good on those weeklies.
But the dollars suck.
When i go shopping, stores and hookers want to be paid in dollars. Not percentages.
And unless you go from week to week with either no gaps or few trading gaps, those frequent gaps between weekly trades, will eventually cut into your dollar and % return at year end. Not to mention all those extra commissions.
However, if you're more into trading volatile, and unstable crap, which pays much better premium than the more reasonable valued quality companies,... then i agree weeklies may be the place to be.
Get in and get out.
I have made 40% and 110% ROI in 2 consecutive weeks playing directional moves with flys and calendars... with small sizes... on the ES and SPY...
Impossible to do with big size (10,000 ES and up). Bid-ask spreads too wide, commissions too high. Execution delays too big. Ass open wide cold in the open for too long to get them off.
A crap market for pikers, that's what options are.
And before you comment, do the math: 10,000 ES is about 650 M non-leveraged bet. Peanuts compared with the cash or futures markets. I can get 10,000 ES done in or out 1,000 times faster than a 100 ES FLY at mid.
A waste of time.
Impossible to do with big size (10,000 ES and up). Bid-ask spreads too wide, commissions too high. Execution delays too big. Ass open wide cold in the open for too long to get them off.
A crap market for pikers, that's what options are.
And before you comment, do the math: 10,000 ES is about 650 M non-leveraged bet. Peanuts compared with the cash or futures markets. I can get 10,000 ES done in or out 1,000 times faster than a 100 ES FLY at mid.
A waste of time.
making a living is too hard. some years are terrible some are good in the long run good. but if you trade for living a bad year will hurt your psyche alot.
so best is to just trade for pension or trade for capital appreciation and get money for living from something else.
so best is to just trade for pension or trade for capital appreciation and get money for living from something else.
I think that's a tough way to make a living... I've had nice success with non-directional trades. iron condors, butterflies, calendars.... (I'm consistent). I do directional stuff as spec plays only. For me it's just too hard to be consistent. (however, I'm sure there are people who have mastered it)