My option trades

Thankyou for those tidbits. You have given me something to chew on.

I guess we are trading the same thing? I´m swing trading within the weekly bar. I cannot day trade anymore, as the Exchanges will not allow it, due to the daytraders rule. Though I have a system that was working great, before they blocked me.

I´ve just recently got a newer system working with overnight and few days trading. Still experimenting with it.

I do appreciate the insights into using OTM and the ITM. I guess the ITM is better for me having to trade overnight or a few days? I will eventually take another look at the OTM choices. Do you actually make money with them? Some examples please?
 
I once bought DOTM exm (earning play) $3 strike call at 0.1 with a big size, thought I bought $2strike, late I realized I made a mistake.

but end up, i sold half at 0.15 and another half at 0.1 with b/e. I thought I will lose this money, luckily I made some. at some point there is no bid at all!

but if you buy ITM, maybe you lost.
 
trader 198

Thanks again, I´m chewing on it.

Another question, what are the commissions like on a $1000 in OTM 5 cent options? What does it cost you to pay for those commissions?
 
Quote from trader198:

I do not sell options. just buy options, then sell.
you do not need sell options first, that needs margin requirement. option leverage is rendered useless.

the only advantage of option is leverage: you can make money no other place you can make.

my 2cents is: trade options just like trade other stuffs, ignore time decay. but just focus on buy on the rise(either put or call). since leverage is high, a little move is magified into a big move, shorten your trading timeframe to 1' chart, get be quick to get in and get out, otherwise things easily upside down.


do not touch those options with no volume. for example, ITM options.

all should be OTM options.

do not average down, do not use stop loss, take risk just as acceptable.
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I understand why you buy, simple lack of capital. But that doesn't mean it's the right way to do something. You shouldn't start any business undercapitalized. You wouldn't start a restaurant if you couldn't afford an cooking grill, because you can't afford one.

I'm not being harsh, I'm just explaining what the professional traders do, they take advantage of those who buy options by moving prices as needed. Then they adjust the conversions to fair value to close out, pretty basic.

Buying something to close, well, maybe, but to buy hoping for some great big move, not so much. I know all the "limited risk" "cheap way to play" all that "stuff" - I'm seriously just trying to help.

Maybe even calendar spreads, short the near term ATM, buy a far out, delta neutral, adjust as needed. But, be sure to roll out right after expiry.

Anyway, best of luck, and I really am just trying to help.


Don
 
Quote from falconview:

trader 198

Thanks again, I´m chewing on it.

Another question, what are the commissions like on a $1000 in OTM 5 cent options? What does it cost you to pay for those commissions?
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That's a question for your broker, wide range of course. One of these retail guys will help you with that I'm sure. I'm sure it will be TOS or IB....guys? Where is the best place to play?

Don
 
Quote from falconview:

Jeff

I´m coming to the same conclusion already as an amateur. Though I´m still playing with playing trends pre-earnings and post earnings. Thing is one article I read suggested that I should never waste my time on a stock that swung less than $1.50 to $1 a day.
Been wondering where especially one would look for those type. Is there a list somewhere maybe?
I regret making the bet on FL this afternoon after the fact, but never again, win or lose. However, pre-earnings and post earnings some of them should fit a trending profile. I really hadn´t considered such an idea, or even heard about it before. But somebody on here said they started mid quarter ( six weeks ) looking for them. Makes sense to me. I had this week been spending too many hours eliminating lists of stocks, as most of them were small companies. Too much work. Perhaps the S & P 100 or something? Anybody care to pass a tip where to find the movers? I suspect it would be the same bunch all the time, once you know where to find them.
Technically charting that should be easy to spot. I had started 10 days out before an earnings report, but it looks like, as someone on here suggested 6 weeks is better. Sounds okay to me. Now I need to make a stock list to look for trading patterns.
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falconview,

Here is a list of American Exchange Traded Funds from wikipedia:
http://en.wikipedia.org/wiki/List_of_American_exchange-traded_funds
(if that link doesn't work, just go to wikipedia.com and type in
"List of American exchange-traded funds."

But again, its a lot of stuff to sit there and chart.
The major ones I look at are:
SPY
DIA
IWM
XLF
IYT
of that group, IWM (Russell 2000, see attached chart) is just starting a 10dma / 20dma bearish cross and could possibly correct to 80.
That isn't much move between the closing price of 81.47 to 80.00,
so I would wait for it to rally up to 83 again and buy puts.
Its just one possible idea.

Also I heard you say you can't day trade options.
Change your account to "Cash Only" and that will fix that, but it may require you first close the margin account and then re-open it as a "Cash Only" account.

Jeff
 

Attachments

Thankyou for the courtesy Mr. Don Bright. Much appreciated.

Will look up calendar spreads. Short the ATM, but what do you mean FAR OUT ?

In the meantime about 10 minutes to find if that stupid gamble I made yesterday on FL is going to lose me a bunch, or win? Ay yi, yi! Should never have done it. Straight gamble. Thats not me. But Ryan is infectious. :)
 
Thankyou Jeff

I got out of my gamble with FL, with just the loss of commissions. Boy was I agonizing over that. Never again. Rolling dice is not my game at all. Pyschologically unfit for it.

Thanks for the listings of indexes. Got them written down. Haven´t got totally turned off on stocks. Just that I will gravitate to the six week or less time frame, going into an Earnings Report. Which would be May, August, November and February. I should maybe live so long :cool:

What I need now is a list of the major stocks that are good movers swings percentage wise on a day. That would be aapl. Don´t know any others?

I was trying to look up the C that Don mentioned, but don´t find anything and will start reading up once again on the Calendar Spread. He being the second person to tell me about it. Atticus should be a good person to tell me about that? I´m sure the major explanation will be online. But not the tricky bits that make it work short term?

Since my agonizing is finished, I feel great this morning now. Can even smile at myself. Going to make some breakfast here. I´ve been up since 5 a.m. it now being 9 a.m. local time. Just watching QQQ for the time being. Having 2 contracts in for a short trade.

Playing with a new indicator I made early this morning, trying to fit into the 5 day period.

Thankyou one and all for caring and sharing. It´s fun as a hobby, but with my wife phoning and asking if I am making any money, it gets iffy sometimes. I´m on a losing streak right now. Which is why I´m trading small for the moment.
 
Quote from falconview:

Thankyou for the courtesy Mr. Don Bright. Much appreciated.

Will look up calendar spreads. Short the ATM, but what do you mean FAR OUT ?

In the meantime about 10 minutes to find if that stupid gamble I made yesterday on FL is going to lose me a bunch, or win? Ay yi, yi! Should never have done it. Straight gamble. Thats not me. But Ryan is infectious. :)
More...

Sell the near term, say Mar or April xyz50 call, buy the xyz50 jun or july, roll when close to expiry, based on current pricing, either to close or actually roll to short jun long sep or dec. Be sure to keep pretty close to delta neutral, time decay will obviously affect the near term more quickly than the far out.

Don
 
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