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My option trades
- Thread starter ryanpatrick
- Start date
Not to state the obvious, but this is literally the worst strategy I've ever seen or heard. OP just throwing money, literally without thought or reason into trade after trade. Since we're in a gambling mindset on this thread should we take bets to see how long it takes before he blows out his account?
Quote from TraderBoy23:
Not to state the obvious, but this is literally the worst strategy I've ever seen or heard. OP just throwing money, literally without thought or reason into trade after trade. Since we're in a gambling mindset on this thread should we take bets to see how long it takes before he blows out his account?
Hey, I did my homework on $BBY. I would have shorted the stock like I normally did. Of course, shorting it with $2000 capital plus $2000 margin gives me crap. Think about it, I'd put in $4000 in capital to short $BBY at $28 giving me about 140 shares (on estimate). What kind of profit would I be looking at today? Lets say I buy back $BBY at $25. My profit would be around $420, on a $4000 trade? I much prefer what I just did from options using less than $900 and getting a return of $1,100. Just saying, it's not like I closed my eyes and pointed to $BBY for a trade.
In fact, did you even look at $BBY's chart? Clearly first test at 200-day sma after a 30% run up. What were the odds that $BBY even beat that 200-day sma with a good earnings. Granted, this poor earning did help push it even much lower than what I thought. I was hoping $26 was support, but I was clearly wrong there. Looks like we may see it at $22 again, just not before expiration. I'd be wrong there too if it dropped that low this week.
Quote from ryanpatrick:
Hey, I did my homework on $BBY. I would have shorted the stock like I normally did. Of course, shorting it with $2000 capital plus $2000 margin gives me crap. Think about it, I'd put in $4000 in capital to short $BBY at $28 giving me about 140 shares (on estimate). What kind of profit would I be looking at today? Lets say I buy back $BBY at $25. My profit would be around $420, on a $4000 trade? I much prefer what I just did from options using less than $900 and getting a return of $1,100. Just saying, it's not like I closed my eyes and pointed to $BBY for a trade.
In fact, did you even look at $BBY's chart? Clearly first test at 200-day sma after a 30% run up. What were the odds that $BBY even beat that 200-day sma with a good earnings. Granted, this poor earning did help push it even much lower than what I thought. I was hoping $26 was support, but I was clearly wrong there. Looks like we may see it at $22 again, just not before expiration. I'd be wrong there too if it dropped that low this week.
Right, I don't need an overview of how option leverage works, I'm quite aware and of course in hindsight the answers are always very clear. The technicals didn't have anything to do with the earnings miss. What if they beat? then you're $900 in puts would be worthless, and you'd be down another 25% + and more than 2/3 along the way of having zero dinero. I mean think about it, sure you won this time, but two weeks ago you lost over $900 on one trade. over 30% of your account, gone. Look everyone gets lucky once in a while and perhaps you did your homework with bby. That's the beauty with options, when you're right and directional trading with them you can see you returns of 100% to over 1000%. My point is, is that if you're just stepping into the markets after reading books, and tossing around a thousand bucks, of your few thousand dollar account, with the mindset that of it's, "just gambling money" you will blow yourself out, it's just a matter of time.
Do you think today's top traders and top money managers just throw a few thousand or million bucks on a trade over and over again and got where they are today. I'm not trying to bash you, all I'm saying is that why not go into it with the mindset of appreciating your capital, not "if I lose it all, who gives a f%*k.
When one goes into a casino saying, "this is just gambling money, lets see what happens," that quite literally translates into, "ahh there's this money burnin a hole in my pocket, let's just put it on black and see if I walk out twice as rich or walk out with nothing, because I don't care. It's money to lose."
anyways, that's just my 2 cents. Do what you'd like and happy trading.
Quote from TraderBoy23:
Right, I don't need an overview of how option leverage works, I'm quite aware and of course in hindsight the answers are always very clear. The technicals didn't have anything to do with the earnings miss. What if they beat? then you're $900 in puts would be worthless, and you'd be down another 25% + and more than 2/3 along the way of having zero dinero. I mean think about it, sure you won this time, but two weeks ago you lost over $900 on one trade. over 30% of your account, gone. Look everyone gets lucky once in a while and perhaps you did your homework with bby. That's the beauty with options, when you're right and directional trading with them you can see you returns of 100% to over 1000%. My point is, is that if you're just stepping into the markets after reading books, and tossing around a thousand bucks, of your few thousand dollar account, with the mindset that of it's, "just gambling money" you will blow yourself out, it's just a matter of time.
Do you think today's top traders and top money managers just throw a few thousand or million bucks on a trade over and over again and got where they are today. I'm not trying to bash you, all I'm saying is that why not go into it with the mindset of appreciating your capital, not "if I lose it all, who gives a f%*k.
When one goes into a casino saying, "this is just gambling money, lets see what happens," that quite literally translates into, "ahh there's this money burnin a hole in my pocket, let's just put it on black and see if I walk out twice as rich or walk out with nothing, because I don't care. It's money to lose."
anyways, that's just my 2 cents. Do what you'd like and happy trading.
I didn't say I don't appreciate my capital. What I did say is that if I do lse it all as I've read on here and in books, then I considered it $2750 worth of experience. I came prepare to lose it all if necessary to learn more on the ins and outs of options. Paper trading is crap, it doesn't put your entire feeling into a trade. When you have actual capital of your own into a trade, that's when you'll be more willing to fight and learn from it.
What did I learn so far, losses can be big, you don't have to tell me that, I loss more than $900 on $TIF options last week. Still, it seems everyone else believes I'm putting money into these option trades and gambling it away.
That's what I was defending. I clearly wasn't gambling, already did all my research....$BBY is one of my tracked stocks back when $BBY was trading between $45-$50 just a couple of years ago. I put the trade on yesterday knowing that the odds were on my side. If $BBY had a strong report (lol, who'd thought that? ESPN's C'mon man comes to mind. You don't make money selling $199 42 inch TVs even if they are the bulky ones.), that 200-day ma should keep $BBY shares in check. I'd say the odds were 80-20 in my favor. If I had that kind of odds at the Casino, I'd gamble everyday.
Looking ahead, I like ACN on Thursday, probably won't put in a trade because of its recent price action (the stock is in no-where land), but if I decide to play, I'm going to play a call...It'd be interesting to see the Dec calls with 1 day left of trading. Best of luck to you and everyone else trading over the next 3 weeks too.
Quote from ryanpatrick:
I didn't say I don't appreciate my capital. What I did say is that if I do lse it all as I've read on here and in books, then I considered it $2750 worth of experience. I came prepare to lose it all if necessary to learn more on the ins and outs of options. Paper trading is crap, it doesn't put your entire feeling into a trade. When you have actual capital of your own into a trade, that's when you'll be more willing to fight and learn from it.
What did I learn so far, losses can be big, you don't have to tell me that, I loss more than $900 on $TIF options last week. Still, it seems everyone else believes I'm putting money into these option trades and gambling it away.
That's what I was defending. I clearly wasn't gambling, already did all my research....$BBY is one of my tracked stocks back when $BBY was trading between $45-$50 just a couple of years ago. I put the trade on yesterday knowing that the odds were on my side. If $BBY had a strong report (lol, who'd thought that? ESPN's C'mon man comes to mind. You don't make money selling $199 42 inch TVs even if they are the bulky ones.), that 200-day ma should keep $BBY shares in check. I'd say the odds were 80-20 in my favor. If I had that kind of odds at the Casino, I'd gamble everyday.
Looking ahead, I like ACN on Thursday, probably won't put in a trade because of its recent price action (the stock is in no-where land), but if I decide to play, I'm going to play a call...It'd be interesting to see the Dec calls with 1 day left of trading. Best of luck to you and everyone else trading over the next 3 weeks too.
Look I understand what you're saying, when I said appreciate, I meant increasing it, not being grateful for it. Perhaps it's the way you started the thread, stating as though you seemed to not care about the outcome of the results, but just "hoped" it would work. You won't have 80-20 odds on each trade and there are many more functions of options that are much safer than just strictly directional trading, (such as hedging your options by selling a further otm contract against your long positions). But your trading is your trading, you do what you like. You could also trade in smaller contract amounts, that would help limit your losses, (yeah, yeah it'll limit your profit blah blah blah). I'm not wanting you to fail, it's just inevitable that those with reckless risk management or none whatsoever, usually are the first to go. Again not trying to bash you, but the market has a quick way of making you eat your humble pie.
You may hit your $4000 goal, but that's a very, very short time frame, <3 weeks. If you want to be successful once you get into 2012, you'll have to learn some size/risk management.
I'm not using a system.....I've been trading stocks on and off for the past few years, very familiar with them. But, I like the leverage in options. I find that a lot of time, I'm risking well too much in stock trades and compensation for that risk is too low. I made this jump onto options just now because job is gone, 401k is barely hanging (I switched to all bonds and cash type positions). Using half my severance pay ($2750) to test out this option market. I'm losing on the NUAN trade as we speak should have sold out yesterday. As for ACN, I haven't made that trade yet. This market is nonsense right now.
If any, I'm looking at Verifone. It's interesting at this price level. It was too high at $43, but I like it now at $40.50. Do I think earnings I will push it back to $43, heck yeah, will I trade it? Not sure just yet. I liked the 41 calls at $1.50, and now I like the 40 calls at $1.50, so what's next? I think I'll get into PAY dec 40 call if the shares can trade back to $40.80 by 2PM and I'll be hoping it holds that level before the market closes too. Of course I would hope PAY 40 calls are still below $2.00 at that time.
If any, I'm looking at Verifone. It's interesting at this price level. It was too high at $43, but I like it now at $40.50. Do I think earnings I will push it back to $43, heck yeah, will I trade it? Not sure just yet. I liked the 41 calls at $1.50, and now I like the 40 calls at $1.50, so what's next? I think I'll get into PAY dec 40 call if the shares can trade back to $40.80 by 2PM and I'll be hoping it holds that level before the market closes too. Of course I would hope PAY 40 calls are still below $2.00 at that time.
I´m enjoying this. It´s good for a laugh and chuckle.
To make money you do have to bet on a direction. It is a bet though. Getting my head handed to me on a platter today. Ouch!
When I could day trade, was doing okay, but the EXCHANGE called me a pattern trader and now I get caught with having to trade overnight and can´t take quick losses. Real BUMMER.
Just getting burned waiting for overnight stuff.
To make money you do have to bet on a direction. It is a bet though. Getting my head handed to me on a platter today. Ouch!
When I could day trade, was doing okay, but the EXCHANGE called me a pattern trader and now I get caught with having to trade overnight and can´t take quick losses. Real BUMMER.
Just getting burned waiting for overnight stuff.
Quote from falconview:
I´m enjoying this. It´s good for a laugh and chuckle.
To make money you do have to bet on a direction. It is a bet though. Getting my head handed to me on a platter today. Ouch!
When I could day trade, was doing okay, but the EXCHANGE called me a pattern trader and now I get caught with having to trade overnight and can´t take quick losses. Real BUMMER.
Just getting burned waiting for overnight stuff.
Oh yeah, I get that feeling too, and then they make you wait 90 days to remove you from pattern day trader and restore your margins lol.
Bought into PAY Dec 40 call at $1.50. I like it, not just because of its price level now, but this market seems to be holding it here at current levels. I know we're not done just yet, still have to wait for that 3PM rush hour. Still, I bought 5 using $750 plus comm. I have $2131.67 in cash, so if it all goes bad, I figured to be in a ($370) loss with 2 weeks left.
I have learned a lot of these past few trades though, so the amount of experience gain is clearly worth the potential $370 I paid for it. If I even make out with a profit in PAY, then I'm probably one step closer to where I want to be by the new year in terms of experience.