Educating myself on trading options

Quote from traderswin:

I am trying to learn options on futures, since I am a futures trader.

Any book/webiste would you guys recommend on this?

Thanks:)
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Options are options, so any good book on options should do the job. There're a few subtle differences between equity/index options and options on futures, which you can learn after you know the basics, but the principles are the same.
 
Quote from MTE:

Options are options, so any good book on options should do the job. There're a few subtle differences between equity/index options and options on futures, which you can learn after you know the basics, but the principles are the same.
More...

Hi MTE,
Thanks.

So, any good book to recommend?

Gav
 
Quote from TruthTeller:

Are you consistently profitable trading stocks?

If not, then don't touch options until you are, because they'll simply accelerate your losses. I have never known, heard about, or read about a profitable retail options trader who was not first an excellent and experienced equities trader.

If you ARE profitable, then why do you want to take on the extra hurdles and risks of options? If you can successfully trade the underlying, in my experience, you are better just trading the stock and avoiding the additional risks inherent in the spreads and decay.
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Do you really experience options trading?
 
Quote from traderswin:

Hi MTE,
Thanks.

So, any good book to recommend?

Gav
More...

Check out the Options section under Books tab on this site.
In particular:

- Option Volatility & Pricing
- The Option Trader Handbook : Strategies and Trade Adjustments
 
Quote from MTE:

Check out the Options section under Books tab on this site.
In particular:

- Option Volatility & Pricing
- The Option Trader Handbook : Strategies and Trade Adjustments
More...

That's cool. I saw these two books in my local bookstore. Will check it out again.

Thanks.:)
 
The difference between stocks and options is the total risk. When you take a stock position----you have all your capital at risk theoretically. That is huge since, you probably will spend atleast, $5,000 on a $50 stock at 100 shares. The advantage is that you can hang onto your stock longer without fear of expiration.
Options on the other hand has a smaller risk dollar wise. If you put in $1,500 on 5 contracts @ $3.00 per contract----the most you can lose is $1,500.00. The drawback is the expiration date. If your option moves the other way, you will incur huge losses and if you let it expire----you will lose everything!!! Volatility of options is a friend or a foe, depending on which side of the market you have and where the stock is headed!!!
In any case, I believe it boils down to discipline. You need to learn when to hold them and when to fold them. I know that I have at times let positions run against me longer than I should have!!! Study and practice paper trading. If you decide to do live trading----start with a small position say 40 shares or 1 contract so, as to give you a feel of the market without hurting yourself in a huge way.
 
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