Option allows you to make more money on the same stock than just buying it out right. Obviously in any trades market, you have to be efficient at what you do, so I am suggesting to Joel to get at least two books on trading just to see the markets from two different view points... then as your techniques become more efficient you can fine tune you technique to fit your trading style.
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Options or futures?
- Thread starter Joel Reymont
- Start date
Quote from socalpt:
so I am suggesting to Joel to get at least two books on trading just to see the markets from two different view points... then as your techniques become more efficient you can fine tune you technique to fit your trading style.
Thank you socalpt! I have a couple of books, just ordered a number of books and have about 400 euro worth of books yet to order.
I had some of these, a long time ago but unfortunately had to leave my library behind. Yes, I will be ordering McMillan books as well as Sheldon Natenberg's.
My starter list:
"Futures Game: Who Wins, Who Loses, and Why" Richard Teweles;
"Mastering the Trade: Proven Techniques for Profiting from Intraday and Swing Trading Setups" John Carter
"Come into My Trading Room: A Complete Guide to Trading " Alexander Elder
"The Trading Game: Playing by the Numbers to Make Millions " Ryan Jones;
"Market Wizards: Interviews with Top Traders"
Jack D. Schwager;
"The New Market Wizards: Conversations with America's Top Traders" Jack D. Schwager;
"Pit Bull: Lessons from Wall Street's Champion Trader" Martin Schwartz;
"Trade Your Way to Financial Freedom" Van K. Tharp; Hardcover;
Yet to order (I'm a voracious reader):
Options as a Strategic Investment - McMillan
Option Volatility and Pricing - Sheldon Natenberg;
Beyond Technical Analysis: How to Develop and Implement a Winning Trading System - Tushar S. Chande;
Expert Trading Systems: Modeling Financial Markets with Kernel Regression - John R. Wolberg;
Winning on the Futures Markets - Angell
Winner Take All: A Top Commodity Trader Tells It Like It Is - William R. Gallacher;
How Charts Can Help You in the Stock Market - Paul Cherney;
Winning the Day Trading Game: Lessons and Techniques from a Lifetime of Trading - Thomas L. Busby;
Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets - Nassim Nicholas Taleb;
Complete Guide to Spread Trading - Keith Schap;
Technical Traders Guide to Computer Analysis of the Futures Market - Charles LeBeau;
My only complaint is that it takes too long for anything to arrive to the Canary Islands :-(.
Joel,
You have some good books on your list. Just remember that live trading is never quite the same as reading.
Open an account with IB and then get some experience paper trading: http://www.interactivebrokers.com/en/software/paperTrader.php?ib_entity=uk
The minimum is not too high and they have a good interface if you are interested in futures, options and stocks. Try some trades in the papertrading account and see how it goes.
You have some good books on your list. Just remember that live trading is never quite the same as reading.
Open an account with IB and then get some experience paper trading: http://www.interactivebrokers.com/en/software/paperTrader.php?ib_entity=uk
The minimum is not too high and they have a good interface if you are interested in futures, options and stocks. Try some trades in the papertrading account and see how it goes.
... or downQuote from socalpt:
Now just sit back and watch, if it doen'st go side ways on you will likely make some money.
... or slowly upwards
... or loses volatility
... or pays a dividend
... or interest rates go down
If none of those things happen, then just buying calls will make you money!
So far this year, I have traded over 1100 purely options positions.
Long only positions: I win 29% and my average winner is 250% my average loser.
Mixed positions (spreads): I win 40% and my average winner is 160% my average loser.
Short only positions: I win 80%, and my average winner is 55% my average loser.
So, at least in my case, buying options is 71% of the time a losing proposition. Perhaps socalpt is a much better trader than I am, but I've never found it the case that you "just buy some options, sit back, and you'll make some money".
---
As to your original question... I had an automated system trading options for a while. Essentially I was trading the price action of near-money OEX options. It worked reasonably well. With a good data feed, there may be some possibilities there. The important thing is to be able to make trading decisions based upon the bid/ask rather than the last. Ocasionally, the strike you're interested in can get pretty sparsely traded with large bid/ask movements. At the time I was with Tradestation and they did not support this feature, so I abandoned my system.
Quote from garbo:
Open an account with IB and then get some experience paper trading: http://www.interactivebrokers.com/en/software/paperTrader.php?ib_entity=uk
Thank you garbo! I'm funding my ToS account first and then my account with Velocity Futures. IB requires too much paperwork for a corporate account.
Most of my options are long and I also don't want to pay for the straddle either... so I have to be vey precise about my picks; I can do better than 50%, some gains more some are not as high but I can break even if I win 1 over 3 loses. When the stock doesn't go my way I'll cut my loses early, and the rest I'll ride them till expirations... then I'll sit back and watch the stock go.
Added OptionCoach's book to my list and will keep reading through the SPX Credit Spread thread. It's reeeaaallyyyy long, though.
Quote from Joel Reymont:
Added OptionCoach's book to my list and will keep reading through the SPX Credit Spread thread. It's reeeaaallyyyy long, though.
he's got a couple of threads around here
reading his materials will teach you how to make your money slow, which is generally the best way to make it and keep it
Quote from Joel Reymont:
Added OptionCoach's book to my list and will keep reading through the SPX Credit Spread thread. It's reeeaaallyyyy long, though.
Take your time and learn. Be prepared and gain low risk experience because the markets will always be there but your account balance can evaporate reeeaaallyyyy fast.