Is day trade options really viable?

almost an exercise in futility. with all the other viable trading strategies out there, it almost seems as if it would be a waste of time. Why not use a strategy where you start out with at least a 50/50 set of odds? you could use more expensive options that would move closer with the stock but then the leverage benefit that would apparently be provided through the use of options would now be offset by a higher premium. If the plans are to day trade, it seems you really cant beat using the underlying.
 
Wide spreads. Quotes not honored. Autoex turned off. Busted trades. Crossed markets. Cancels that are not allowed.

sheesh....

If I wanted that many problems in my daily life, I would be married.
 
Agree. Most people are losing since their 50/50 odds are chopped to the losing side for many reasons.

:p


Quote from POSMENTUDE:

almost an exercise in futility. with all the other viable trading strategies out there, it almost seems as if it would be a waste of time. Why not use a strategy where you start out with at least a 50/50 set of odds? you could use more expensive options that would move closer with the stock but then the leverage benefit that would apparently be provided through the use of options would now be offset by a higher premium. If the plans are to day trade, it seems you really cant beat using the underlying.
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Quote from Lobster:

And now imagine you trade not just one but 10 contracts. Then you would have to be right about the underlying movement at least $5 to break even. I wonder how those guys who trade hundreds of contracts do it.
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This is not accurate. You need generally about the 50 cent move of the underlying (in your favor) for the available Bid to reach the original Ask at which you bought it. But whether you trade 1 contract or 10 contracts makes no difference. If you buy 1 contract at $1.00 which you later sell for $1.10, you will make $10 minus commissions (total profit $8 on IB SMART orders). If you traded 10 contracts instead of 1, you would make $100 minus commissions ($80 profit on IB SMART order).
 
I have been trading options on stocks for a while. My result shows day trading is much harder than swing trades. Instead of having 10-20 trades per day, now I'm doing 5-10 trades a week while working on a full time job. Position size 1-5 contracts and use scale in/out.
 
Some calculation not right? Double check please. $3.

:p

Quote from hii a_ooiioo_a:

This is not accurate. You need generally about the 50 cent move of the underlying (in your favor) for the available Bid to reach the original Ask at which you bought it. But whether you trade 1 contract or 10 contracts makes no difference. If you buy 1 contract at $1.05 which you later sell for $1.10, you will make $50 minus commissions (total profit $48 on IB SMART orders). If you traded 10 contracts instead of 1, you would make $500 minus commissions ($480 profit on IB SMART order).
More...
 
Quote from hii a_ooiioo_a:

This is not accurate. You need generally about the 50 cent move of the underlying (in your favor) for the available Bid to reach the original Ask at which you bought it. But whether you trade 1 contract or 10 contracts makes no difference. If you buy 1 contract at $1.05 which you later sell for $1.10, you will make $50 minus commissions (total profit $48 on IB SMART orders). If you traded 10 contracts instead of 1, you would make $500 minus commissions ($480 profit on IB SMART order).
More...

Dream on buddy, a 10 lot for a nickle nets 30 bucks at a dollar commission.
 
Thank you. I had my numbers mixed up, and I edited the post to fix them now. But my point was that your profit on 10 contracts is 10x your profit on 1 contract, on the same amount of movement of the underlying stock.
 
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