Option trading for a newbie

Ben74 · Mar 6, 2009

Quote from Appleseed:

How does 1.2k get you 270 shares?
$1200/16=75 shares
what am i missing?
cheers
john

He meant risking $1200 max. Buying 270 shares at $16 comes to $4,320 but of that $4,320, he will then set a stop loss so that the most he can lose is $1,200. I believe that comes to a stop at $11.65 or so.

And what I'm trying to show is the downside risk can be the same i.e a $1,200 lost, but the upside reward is very different. Where as buying the stock yields far less then the stock option the higher the stock moves.

Ben

Appleseed · Mar 7, 2009

Quote from Ben74:

He meant risking $1200 max. Buying 270 shares at $16 comes to $4,320 but of that $4,320, he will then set a stop loss so that the most he can lose is $1,200. I believe that comes to a stop at $11.65 or so.

And what I'm trying to show is the downside risk can be the same i.e a $1,200 lost, but the upside reward is very different. Where as buying the stock yields far less then the stock option the higher the stock moves.

Ben

Thanks Ben i now see what was ment

cheers john

Appleseed · Mar 7, 2009

Quote from Appleseed:

Thanks Ben i now see what was ment

cheers john

meant
john

Ben74 · Mar 9, 2009

Bought 10 DKS March 10 calls at $1.40 for ($1,414.95).

Ben74 · Mar 10, 2009

Okay, not a bad day. I closed our DKS March 10 calls at $2.85, and made $1,420.10 on this trade.

Ben

2TwentyTwo2 · Mar 11, 2009

Ben,
I have been tracking your trades and following your journal here.
I was curious what site or sites you might be using to make these earnings trade estimates. Your system seems to be working nicely, good job!
22

MsFutures · Mar 11, 2009

Ben,

I am impressed with your trades so far as you are right a lot more times than wrong on the direction of your bet. What causes you to believe it shall be a call or a put? Thanks.

OptionsCharm

Ben74 · Mar 12, 2009

Quote from OptionsCharm:

Ben,

I am impressed with your trades so far as you are right a lot more times than wrong on the direction of your bet. What causes you to believe it shall be a call or a put? Thanks.

OptionsCharm

I think I took some pretty ugly losses too. I will check my account, but it wasn't all nice and up

Ben74 · Mar 12, 2009

I Bought 10 ARO March 22.5 calls at $2.35 for a cost of ($2,365). Let's hope ARO comes with a bang tonight.

Ben

Ben74 · Mar 13, 2009

Quote from Ben74:

I Bought 10 ARO March 22.5 calls at $2.35 for a cost of ($2,365). Let's hope ARO comes with a bang tonight.

Ben

Closed ARO calls at $3.10 and my gains are $720. Overall, my gains have climbed to $31,517.25. With that $12,000 starting capital, I like my account right now sitting at $43,500.

Ben