new trader

Quote from murray t turtle:

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1] Runtrade sounds like you have the guts to be an entrapeneur;
if you cant get in with Market maker/specialist,
another elitetrader had a window washing business till he could trade full time

2] Verdais had another helpful point,'' experience watching the markets....is better than books, better than seminars.''

3] And while option buying is fun, exacting as far as capital risked;
markets stay moderately bullish or moderately bearish much of time. Sheldon Natenberg likes '' to buy/sell underlying stock in moderately bullish or moderately bearsih market.''Plus much much better bid/ask spread to trade/invest stocks

3.3]And like Option Trader says ''and you would also get the asking priice'' Money makers/specialists may split bid /ask however for option buyers/sellers for high liquid stuff like QQQQ options, especially with tons of patience.


Wisdom is profitable to direct.
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Thanks for the advice...here would be my response(s):

1) I heard UPS has good benefits and pay over graveyard shifts:p

2) I plan to watch/papertrade the markets extensively for about 2-4 months before trading.

3) I have been developing trading strategies and risk-reducing scenarios over the last 10-12 hours of study. I am feeling confident on my work so far ( I have even been working on a continuous positive expectancy theory where after each trade, risk approaches zero yet profits remain uncapped).

3.3) I feel patience will not be a problem for several reasons.


and 4) i may be over a little over confident at times:p hehe
 
Quote from RunTrade:

Thanks for the advice...here would be my response(s):

1) I heard UPS has good benefits and pay over graveyard shifts:p

2) I plan to watch/papertrade the markets extensively for about 2-4 months before trading.

3) I have been developing trading strategies and risk-reducing scenarios over the last 10-12 hours of study. I am feeling confident on my work so far ( I have even been working on a continuous positive expectancy theory where after each trade, risk approaches zero yet profits remain uncapped).

3.3) I feel patience will not be a problem for several reasons.


and 4) i may be over a little over confident at times:p hehe
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Runtrade;

3.3] My main mistakes in derivatives trading was in using too much leverage, [options not ITM or not near the money ] ;
so wrote more ITM [in the money] high liquid options in my plan.

:cool:

However from before the start rightly knew the moneymakers/marketmakers/specialists would help me.

Knew that before reading Market Makers Edge, book by Joshua Lukeman;
knew it even more after reading that one.
 
Quote from Option Trader:

Reply to Runtrade:

When you mention consistant profits , beware of the calendar spread and covered call myths. For the most part I would not look at option trading as a method of gaining consistant income, rather to leverage positions and limiting risk. On that note, the private message I sent you before I believe was good advice, and I mean it. I am not in position to weigh pro's and con's of equity versus future options.

As for writing strategies, condors in my opinion is the only strategy worth focusing on. You can send me a private message.
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why PM. why don't you bring some light to all of us:)
 
I agree with zdreg. Post the advise you gave so we can all learn.

Should be interesting from someone recommending Condors to newbies and referring to Covered Write myths.

kny 3 :cool:
 
Quote from kny3:

Post the advise you gave so we can all learn.

Should be interesting from someone recommending Condors .....

kny 3 :cool:
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Not investment advice;but that would be helpful to study condors;
didnt say one should use margin as a a new trader.

But study yes, study condors yes;
use margin as a new trader,NO:cool:
 
Run Trade,

I would suggest you get a hold of George Fontanills book, The Options Course, 2nd Edition. It cost me $70 which I feel is worth it.
Take it slow and trade 1 contract at the start. I started with 2 contracts and now trading 5 contracts. I am looking to trade 10 contracts or more by next year.
Maintain a trading journal. A lot of people including me (before I realized how important it is) do not maintain trading journals. You realize your mistakes and can correct them which will only improve your performance.
Trading stocks or options requires patience. A friend of my who is impatient blew up close to $300,000 because she was impatient. She missed making money on options on some trades I told her about which made me money because she would not pull the trigger. Finally, she listened to my last trade on IRF MG which we bought at $2.65 and sold at $8.20.
Now she promises to listen.
"It is not the number of trades that matters. If don't have a trade, don't force it!!!"
 
It is common for "newbies" to be led to believe they can make a steady income with covered calls and it would provide them a nice margin of safety. The reality is that collapses in stock price, which everyone knows does happen often enough, will damage writers of covered calls almost enough, while they were having that illusion of safety. Perhaps collars would handle this concern.
Regarding condors: There is nothing wrong with a person knowing what the conclusions are of more experienced option traders; by studying condors (as Murray mentioned) a person can learn to aim his focus more. Condors are like doing two credit spreads, one for calls and one for puts; the risk level is much less than by covered calls.
 
A covered call is exactly the same as a naked put (except with higher margin requirements). If you're comfortable selling covered calls, you should be equally comfortable selling naked puts.

Food for thought.
 
Options, I loved them, but they sometimes left me burned such as the time I was long a lot of calls when 9/11 hit.

My advice to you is to find a NYSE stock and learn how it trades. You can then by trial and error trade ATM or ITM and have decent luck if you truly understand the underlying. I always traded WMT options. My favorite trades where on expiration week and there would be a lot of calls or puts at a certain strike such as 30,000 calls at 55 strike, and then the stock would move to say 55.25 and the 55 puts would be ask at .30 so
I would buy 10 or 20 and then the stock would fall to like 54.50 and the put would then be selling for .50 and I would pocket an easy 60% profit on a day trade. I did this numerous times over the past 5 years and almost always made between 50 to 100% on these day trades. But the game is really hard because of the time constraint, and my warning to you is to not get big headed and try to do size if you get on a hot streak. I did, and I pissed off about 4k last nov as I had the WMT 55 puts at 2.5 and the election went through and the stock promptly shot to 57.5

http://stockcharts.com/def/servlet/SC.web?c=WMT,uu[w,a]daclyyay[de][pc20!c50][vc60][iUb14!La12,26,9]&pref=G
 
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