explain how to make profits in option market

[valerio zhang]

can someone please explain real quick which way a seller of a buyer would want the market to go and why. Thanks, noobie here.

1.buying a call
2.selling a call
3.buying a put
4.selling a put

 

[xandman]

I hope this is for your homework. If you want to trade you have some serious reading to do.

You make a profit at expiration when:

1. the stock went up
2. the stock went down or did not move
3. the stock went down
4. the stock went up or did not move

 

[galvinlee888]

can someone please explain real quick which way a seller of a buyer would want the market to go and why. Thanks, noobie here.

1.buying a call
2.selling a call
3.buying a put
4.selling a put

Seller want to sell when the market is high, buyer want to buy when the market is low.

The million dollar question is how you know a market is low or high, or going no where ?

 

[elliots11]

Seller want to sell when the market is high, buyer want to buy when the market is low.

The million dollar question is how you know a market is low or high, or going no where ?

That's a question YOU need to answer. There is inherent uncertainty in the market. Personally, If you have not already I recommend you read Market Wizards. This should give you some insight. There are many approaches to this and it depends on the time frame you trade and what type of trader you are and your ability to delay gratification and not panick. There is no pat answer to this and I would be highly wary of anyone who claims to know 100% that answer. The real question is do you have a method of not allowing losses to take over? It is the losing trades or the failure to contain them that destroys trading accounts. Everyone has losers the question is are you able to be good at losing. The better you are at losing the more money you will make.

 

[galvinlee888]

Fr

That's a question YOU need to answer. There is inherent uncertainty in the market. Personally, If you have not already I recommend you read Market Wizards. This should give you some insight. There are many approaches to this and it depends on the time frame you trade and what type of trader you are and your ability to delay gratification and not panick. There is no pat answer to this and I would be highly wary of anyone who claims to know 100% that answer. The real question is do you have a method of not allowing losses to take over? It is the losing trades or the failure to contain them that destroys trading accounts. Everyone has losers the question is are you able to be good at losing. The better you are at losing the more money you will make.

From the way you answer the thread, i can tell you are one of those 95% crowd. All the best to you.

 

[elliots11]

If you have a better answer why not share instead of guessing how successful I am?
Those in the 95% are those who failed to contain losses.

 

[galvinlee888]

If you have a better answer why not share instead of guessing how successful I am?
Those in the 95% are those who failed to contain losses.

Really?
Those 95% failed because they don't have edge, mostly are those trade using classic trading approach who die with millions cuts- commission, slippage, negative expectancy system and etc.The common symptoms of those are when they failed, they will blame:
1. Market conditions changed and their system no longer profitable
2. They break their rule and hence they loss
3. Someone / government manipulate the market

Those kind of excuses will make them feel better
The reality is they don't have a positive expectancy trading approach. Market and Wall Street never change for the last 100 years (even most of the buildings and street there remain the same lol) , you will win if you are able to find the profitable way. A good trader can always goes back to profitable situation regardless what type of market, even they make a few mistakes here and there (fat finger, break their rule and etc), commissions&slippage or market conditions change (such as the super bull market we have now)

Are you profitable?

 

[Windlesham1]

I'm profitable I don't trade a 'system' but have a systematic approach,as all systems fail eventually. Options give us the flexibility to be neutral and make money

 

[elliots11]

Not impressively profitable but not giving up. Some of the market wizards blew out their accounts before becoming in the 5% group. I don't claim to be in the 5% group but am aspiring to. I am working on becoming better at this.

 

[ExperiencedJoe]

Seller want to sell when the market is high, buyer want to buy when the market is low.

For retail, they want to buy when it's high, they want to sell at stop when it's low. I suspect you may have got things mixed up, or you are a market maker here on intelligence gathering mission ?