Is there a tool to pick the best option?

Im not sure why hes even bothering with options.

He's right 60 percent of the time.

We don't know his risk reward metrics,but I don't think I know one great directional trader who sells premium .

If he goes the backtesting route I think he will find on a risk adjusted basis,selling premium is not the way to go..









Baozi said:
OP, besides a screener, some basic knowledge of how volatility works should be your next priority.
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spinn said:
Hi everyone, I am a fairly good trader and am probably right in terms of direction on 60% or more of my trades. My problem is I really do not know what I am doing :) . I am just picking options to sell to open usually that are worth $1,000 or so.

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I take very small risks but am hoping to increase position size at some point.
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This sounds something like 'what is the best kind of razor blades to swallow? I like being safe, so I'm just picking ones that are about 2"x2" right now.'

If you're any good on direction, you should be buying options, not selling them - just what @taowave was saying. Selling is basically a bet against volatility (to put it crudely, a bet on minimal price movement) whereas buying is the opposite. If you're any good at predicting direction - and even more so, the distance the price will move over a given tenor - you can make a killing by buying options (e.g., some types of trades have returns in the 100:1 range.) Selling is mostly about smaller returns in steady or decreasing volatility - i.e., when the market isn't moving (not exactly the case right now.)

All of the above has exceptions and can be modified in lots of ways... that's why it's called "options". :) But in the main, that's how it works. In general, selling options in this market is a bad idea.

But then, doing anything that you don't understand with options - or trading in general - is a bad idea. And yet, here we are...
 
Every one here is always ready to tell you why you should not be trading. Don’t judge a book by it’s cover. Don’t judge a trader by one post.
 
taowave said:
Orats has my vote,I use it,but its not plug and play..Right 60 percent of the time? That's pretty dam good..Not sure I would be naked selling options if I was that good..Have you looked at your risk adjusted returns vs the underlying?

And what do you mean by looking at the SPY at 300,but think it's going down in the next 30 -60 days??

I'm guessing your are looking to short calls/call spreads for apx 10 bucks anticipating a 20 percent plus decline??

Don't love that trade

Definetly check out Orats and put the time in
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Right 60% of the time but he doesn't know what he's doing and he's quoting a snake oil options vendor.... you've seen this story before.
 
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