Index vs Equity
- Thread starter TradeCat
- Start date
- When in doubt trade options on the QQQ (also look at DIA and SPY) - especially the weeklies.
- Concentrate on about 10 stocks only - include FANG (FB, AAPL, AMZN NFLX, GOOGL).
- Index Options or Equity Options are equal - neither is "better".
I actually like thinly traded equity options. Lost $ every time I tried index options but made some $ with thinly traded options in spite of wider bid/ask spreads.
You see, I don't think I can compete against the pro traders', institution players', hedge funds', fellow ET experts, etc. who mostly traded indices or high volume equity options. I only like to trade against MMs and other small retail traders like myself a few contracts at a time.
You see, I don't think I can compete against the pro traders', institution players', hedge funds', fellow ET experts, etc. who mostly traded indices or high volume equity options. I only like to trade against MMs and other small retail traders like myself a few contracts at a time.
ironchef ............ You might like PCLN options. Volume is relatively low on the options and stock, and it doesn't take much to move PCLN.
I don't know why I respond to these. Question for OP: what do you think option trading strategies should look to accomplish trading volatility?
Sell high? Buy low?
What's your forecasting model?
If you don't have one, then don't trade options.
Sell high? Buy low?
What's your forecasting model?
If you don't have one, then don't trade options.
Last edited:
Yesss! on PCLN. Traded it as a stock and made OK money. Though it is harder to speculate. I once held my position for two weeks to get a 2% return. Talk about competing with very wealthy investors. They love the high dollar value equities.
Iron chef: Thinly traded. How thin? I look for open interest around 40x my contracts. Though I have tried some mid-cap companies with low OI and was able to profit on day or two holds. High risk of being left holding the bag.
Iron chef: Thinly traded. How thin? I look for open interest around 40x my contracts. Though I have tried some mid-cap companies with low OI and was able to profit on day or two holds. High risk of being left holding the bag.
Some of them had no OI and from the bid ask, I guessed my counter parties were the MMs. Not sure it is a good way to go but I did try a lot of other strategies and none worked too well.
I am still learning and I welcome comments and guidances from other expert ET options traders.
Best wishes.
Thank you for the suggestion. I definitely will take a look.ironchef ............ You might like PCLN options. Volume is relatively low on the options and stock, and it doesn't take much to move PCLN.
By the way, I noticed you focused only on a few stocks.
Regards,
Last edited:
Though you need only 1/10th the options on SPX than you would on SPY (thus saving on contract fees), the bid/ask spread is very wide, sometimes, 20-30cent wide. That makes me nervous.