Quote from Rob on Business:
Hi Palawan and Chagi!
I'm just a newby on the block and want you to know I've been looking for someone to talk to about options trading for months! So yes, someone IS reading your input! I've just registered this evening and haven't digested or looked up the data you've discused yet, but plan to since I have A LOT to learn! I've been trading realtime since February and am coming here with big ears since I've lost a ton of $ with only a few dollars left to turn around with.
I've been trading GOOG, ECA, EBAY, which are usually good movers, but my timing is terrible as is my patience and discipline. For example, I've noticed GOOG lately has been forming predictable cup patterns with the stock price correcting back to the average price line whenever a market fluctuation has caused it to deviate from it. all the deviations have been up, not down. So when it spiked Aug.2 I expected the upward swing to continue after the corrections Aug.3+4, buying an Aug. 320 call yesterday for the expected upswing today, yet for the first time the stock price closed below average! Being an Aug. call, I've not much time to beat the decay to break even. I don't even have enough money to buy the Sept. call! Same deal with EBAY. Recent history shows to sell positions at doji's, which I faithfully did Aug.3, whereupon I bought a put to ride the dip. Only I got anxious because of its crazy rise since its last E.R. and traded it in for a call after only one day, losing money on today's dip. I know the Nasdaq's 38 point dive the last couple days is a great excuse to use, yet had I stuck with the put til candle shaped near day's end to indicate otherwise, I'd have been in the money. Another Aug. call to have to ride...! And so it goes.
You mention valuations - I've noticed options pricing higher at day's open than intraday, likely because of higher volume, so I consider it an advantage when I'm selling in the first hour and buying intraday. I've found with good volume, the bid-ask spreads for the options on the stocks I mentioned are pretty good, even standing even sometimes.
I was hoping to be able to trade full time in the winter months here in Canada come this winter as I'm tiring of wrenching in the cold and tree removal is pretty dead then. But unless I get some good help real soon, that dream will die a sad death. So, for any of you successful traders out there, consider this a humble cry for help!
God be with you,
Rob
May God be with you, as well.
Rob, my trading style is not really close to yours. you appear to be a technical trader, and i consider my trading methodology to be at the most 20% technical. you also seem to daytrade options. i gotta tell you, i used to do that and i eventually blew up my account. i lasted for a little bit with some nice winners, and that was because there was so much volatility at the time. nowadays, the volatility is not really there, at least not like the ones in late 2000/early 2001, which would make me think that daytrading options successfully would be so much harder. i cannot do it...
as far as advice, i don't think i'm qualified to give any. i've had a nice run the past few months but i think luck has played a good part. i just tried to be really selective before putting the positions on.
if you have call options on ebay, i would keep them. earnings has been released and ebay didn't disappoint. the problem is you're really playing the short term options. it's tough! there's so much noise coming from everywhere and it's hard to keep focused. like you said, you get impatient because there's not too much time left on your options and time decay is killing you. it's so much more relaxing to have longer term options. you can ride-out and stay put even when the short-term fluctuations coming from market-related movements are taking place.
the past couple of days, the markets were reacting to the possible rate hike based on strong jobs data. so what? last time there was a rate-hike, the market dipped, but that dip turned out to be an opportunity to be long. my opinion is that it's still a buy-the-dip market, until the downtrend lasts for a couple of weeks. having said that, it's a little discomforting to see the CFTC Commitments of Traders report showing the commercials are short on the nasdaq 100 index about 19,000 futures contracts (full size and minis combined). it's been a while since i looked at the CFTC data, but the last time, the commercials were long...
my real advice, and this may be too late , is to pick longer term options. you can still use your techinical methodologies but you'll have a better chance of being right. i think it's easier to predict the movement on the underlying given enough time. i'm able to sleep well at night, go to work, and just not worry too much on the daily movements of my positions. i still think about them constantly, but i'm able to discipline myself to be patient because i can afford to be with longer-term options. if you had 3-month options, you could give it about 2-3 weeks to go in the direction you thought it would go, then if it doesn't (but hopefully it does) you can close it out for profit or loss. hopefully for profit.
I can't think of anything else...
I wish you the best of luck and I hope you make it.
. But other people have posted encouragement as well and I see the views increasing, so...
