need some direction

T

therealjones

Hey everyone, I've having a rough start so far with options trading, learned about it from tasty trade and so far I've lost about $250. I have an 11k account and am looking for some trade ideas and direction.

I can't sell naked options, so iron condors and verticals are what I pretty much have to play with. I see some people who sell weeklies in SPY or QQQ, I'm just looking to start getting a good couple of trades going.

Any advice would be great! Thank you
 
Trade on sim until you have a solid, proven profitable plan on how to proceed. Dont trade real money until you have all this in place.

Keep studying, read as many articles you can, watch videos of options, read up on Black-Scholes, the greeks, get some good books (Euan Sinclair) etc.

There's no magic anywhere. Becoming a profitable options trader and a professional one at that, is just as hard as in any other job. In fact many would say it's harder.
 
therealjones,

What sort of advice are you looking for?

What are your expectations for your trading? If you think that losing $250 is a bad result then I believe that you should have more realistic expectations for your trading.

If you're wanting a 100% win rate then you could sell > 90% OTM strangles on the SPX with long options 25 points further out (effectively an Iron Condor) to limit your capital requirement. These might not make you much money but the success rate will be near 100%. As you get better executing these trades you could begin to take on more risk selling closer OTM which will increase your profitability, however with a reduced success rate.
 
I know that I'll lose, but so far I've been trying to do trades that use $100 in buying power at a time, doing a lot of them, following tasty trades "number of occurrences" the problem is that "forgetting about the losers" has caused some huge losers and "managing winners at 50%" hasn't compensated.

I can't trade any naked options, and have been using dough mostly, which doesn't support options in futures yet.

Is trading in the SPX doable for a small count of 11k? What kind of buying power per trade is a good ratio? I've heard 3, 5, 10%
 
therealjones said:
I've having a rough start so far with options trading, learned about it from tasty trade and so far I've lost about $250.
More...

Why would you want to learn from a couple of old market maker dinosaurs who can barely articulate the simplest of option concepts?

What have you learnt so far that is of any practical use?
 
Be careful selling weeklies on the SPX, that's a really big contract.

Unless, Your playing with Greeks in 1000th digit. Start with SPY.

If your constrained with capital, but have low commissions. Consider doing 2 vs 3 month calendars, holding for 1-2 weeks.

If you want action, trade the underlying directionally and capture 2 week premiums on by doing a buy write. That locks you in for awhile and prevents over trading.
 
agreed rickty, and buy them back at double the ic credit.

or keep buying options and almost assuredly kill the account as a newbie.

rickty said:
therealjones,

What sort of advice are you looking for?

What are your expectations for your trading? If you think that losing $250 is a bad result then I believe that you should have more realistic expectations for your trading.

If you're wanting a 100% win rate then you could sell > 90% OTM strangles on the SPX with long options 25 points further out (effectively an Iron Condor) to limit your capital requirement. These might not make you much money but the success rate will be near 100%. As you get better executing these trades you could begin to take on more risk selling closer OTM which will increase your profitability, however with a reduced success rate.
More...
 
I haven't bought premium, just been selling it. So I could do something like sell todays SPX, a vertical, Buy the 1870 Sell the 1875, would only collect .46 but its 88%OTM.

Next weeks MAY 9, doing a 90% OTM spread would collect .50cents

If I do an iron Condor with both sides being 90% OTM expiring today would collect .56, MAY 9 iron condor 90% OTM would collect .76

Is that the general idea rickty?
 
therealjones,

So far you've told us you're not satisfied with your trading results. So when someone is not satisfied it's because the outcome did not meet their expectation. So please clearly state what is your expectation for your trading?

Also, how many trades did you put on? What sort of trades were they? e.g, long calls, short put spread etc.

I'll have more to say in a subsequent post (if you want to keep this going).
 
For the past 3 weeks I've had 4 days a week thats been -$30, and then maybe one +50, so just to start seeing some green being posted would be a good start, I have the following trades

Bull put spread in AMAT sold the 21 bought the 20 because of high IV a month ago, expires in 15 days and is a 42.50 loser

Bull put spread in APOL, was high IV, sold 31 bought 30 expires 15 days and is a $56 loser

Bear call spread in CSCO sold 23 bought 24, that ones almost even, 15 days exp.

Bear call XLK, 15 days left, sold 36 bought 37, $26 loser

Iron condor XRT 85 86 C, 77 78 P, 15 days left, waiting on this one, down $4

YHOO bear spread, 37 38 C, down 15, 15 days, waiting on this one too

Pandora, 21 22 bull put spread, 15 days left, this ones working out

I'm looking for high probability steady small gains, just feel like I'm in a losing streak and getting stuck, need some green to lift my spirits.

So yesterday I put on a few weekly spreads in SPY, expiring today, all with 80% OTM, risk 80 to make 20, and those are working out, will let them expire worthless. This seems to be the first thing that has worked out well so far! I just keep being sway by "market correct is coming!" talk and have been bearish on most things and have lost.
 
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