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Newbie here.
- Thread starter cramerica
- Start date
. Paper trade.
So your a noob with no clue and the first thing you want to do is short options contracts naked.
Sure thats a good start to riches.
I do not like the term naked put if enough cash is securing the assignment of the underlying equity to your account if you are short that put contract. Technically it is a cash secured put not a naked put.
Sure thats a good start to riches.
I do not like the term naked put if enough cash is securing the assignment of the underlying equity to your account if you are short that put contract. Technically it is a cash secured put not a naked put.
Yes ..... Overstate your income, assets, and option trading experience to get approved for option trading. Nothing wrong with that. The forms are part of the "Get To Know Your Client" routine that they must do to cover their asses.Quote from cramerica:
Should I over state with Scott in order to get approved.
It's doubtful they will check.Quote from cramerica:
Will they check or do they just go by the info I give them?
Quote from mc_s:
Writing naked puts is not as dangerous as writing naked calls, like I said, as long as you have sufficient funds for the purchase of the stock you are promising to buy should the price of the stock drop and you get exercised!
Get over the "unlimited" loss concept of short stock. Nothing goes to infinity and if you know what you're doing, losses are cut regartdless of whether you're long or short.
Never sell more calls than stocks that you own!! If you own 1000 shares never sell more than 10 contracts!!! Right? each contract being for 100 shares. because you have the 1000 shares already, you don't have to go to the open market in order to get the shares to sell (which may have gone way up in price, right?)
...selling a call is a promise to sell a stock for a certain price, what business do any of us have making this promise if we don't already own the shares we are promising to sell. If someone takes us up on our promise (exersises us) where we gonna get the shares?? The market right? what happens if the price of the stock has taken off since we made our promise, we could possibly have to go to the market and spend $12.00 dollars per share in order to turn around and be obligated to sell them to our option purchaser for your agreed upon price (the strike of the call that you sold) which could be say for example $8.00/share or worse, you just don't know what could happen after you sell the call, anything could happen right? That's why you should never sell naked calls.
So it's OK to take the risk of a stock going to zero but overwriting could be disasterous? LOL. Great R/R spectrum. You do what you're capable of understanding, tolerating and managing.
Thanks again for the replies.
KINGOFSHORTS, I had misspoken what my intentions were. I do not want to sell naked options. I only want to buy options. Another question I have is if anyone here is playing on Wall Street Survivor? I can not find anything on there that shows a profit/loss on a particular stock or option. It shows in your dashboard while you still own it but as soon as you sell there seems to be no record of it other than in your total value. TIA
KINGOFSHORTS, I had misspoken what my intentions were. I do not want to sell naked options. I only want to buy options. Another question I have is if anyone here is playing on Wall Street Survivor? I can not find anything on there that shows a profit/loss on a particular stock or option. It shows in your dashboard while you still own it but as soon as you sell there seems to be no record of it other than in your total value. TIA
Quote from cramerica:
Thanks again for the replies.
KINGOFSHORTS, I had misspoken what my intentions were. I do not want to sell naked options. I only want to buy options. Another question I have is if anyone here is playing on Wall Street Survivor? I can not find anything on there that shows a profit/loss on a particular stock or option. It shows in your dashboard while you still own it but as soon as you sell there seems to be no record of it other than in your total value. TIA
Don't know much about Wall Street Survivor, but if you have TD Ameritrade (which I also have) why not download the Thinkorswim platform and use that to paper trade? It has a papertrade option when you login.
There is a wealth of professional level tools/features on that platform. Plus chat and daily educational webinars on the market, options etc, and you can watch cnbc live, including Cramer. haha. In addition most of the educational seminars are archived. They are extremely helpful to beginners, but there are more techincal seminars as well.
I mention this to you because for a long time I had TD Ameritrade and wasn't using the Thinkorswim platform because I just didn't know about it or that it was available free just for being a TD Ameritrade client.
Call up your broker and threaten to leave them on the spot if they don't grant you options approval. Or you could always lie, which is what most people do anyway. I remember when I first started on thinkorswim, and was denied level 2 (couldn't buy calls or puts). I called up TDAmeritrade and was like yo, I moved here from Schwab to trade options, and now you're telling me I can't? And the guy at TDA basically said, "Your approval level is based on your experience, you must have said you had none. Apply again and lie your face off."
The next day I was trading options!
Got my buddy into it too, he knew nothing, just wanted to buy some calls that's all, and Schwab said no. We called them up and said "If you ever wanna see my money again you'll hook me up right now, or I'm out." He's a happy owner of 200 calls now.
The next day I was trading options!
Got my buddy into it too, he knew nothing, just wanted to buy some calls that's all, and Schwab said no. We called them up and said "If you ever wanna see my money again you'll hook me up right now, or I'm out." He's a happy owner of 200 calls now.