Options Trades For Capital Growth

[ironchef]

Options are too volatile for stops - they could go down to $1.00 and then back to $3.00 the next day, that happens all the time. A big advantage of options over futures is that you don't have to get stopped out of a trade only to see it rebound without you.

I picked the 3 contracts at $1.70 without stops because the risk is approximately the same has 12 contracts with a stop at $1.35 - $510 vs $420. My intention would be to keep the trade open and give it time to develop - even if it expires worthless.

Thank you for the reply. Make sense to me.

Personally, I stopped using stops even for underlying. Several times I was stopped out and the prices then reversed and went back up, never touched my stop prices again. So now I only do mental/paper stop and when the target is reached execute a sell order. It does mean I have to watch them carefully and constantly.

 

[Quest2016]

BTO 12 contracts of GLD Feb 26 2016 114 Call @ $1.85.

 

[OddTrader]

Market: U.S. Equities and Options

Risk per trade: 0.16 on $1.00 or 0.25 - 0.30 on every trade that cost between $1.80 and $3.50.

Maximum duration per trade: 2 Days

When carrying a trade of options for max 2 days, you cannot have any control overnight risk beyond your target risk per trade, can you?

Even much worse for possibly larger/unexpected risk, when trading equities!

Just 2 cents!

 

[Quest2016]

When carrying a trade of options for max 2 days, you cannot have any control overnight risk beyond your target risk per trade, can you?

Even much worse for possibly larger/unexpected risk, when trading equities!

Just 2 cents!

Whoa! My partner and I just discussed about the traders' nightmare - gap up or down against positions held overnight! I agree completely with you! The stop loss applies only to the first trading day when position is initiated.

Thank you for that comment, please keep a tab on this thread.

 

[Quest2016]

I closed GLD position for $360.00 (Commissions included). I hate scalping, but I cannot pass up trading opportunities that show up during trading hours.

Day trading is not my thing because I am experimenting my trading rules for capital growth, so please disregard any position posted on this thread that generates less than 50% .

Next...

 

[Illini Trader]

I admire your courage to put your trades out there for public scrutiny. However, I am blown away by your risk on each trade. Your "risk of ruin" is as close to 100% as it is possible to get. Professionals that I respect say 20% of your account at risk in options at any one time is the absolute maximum. Holding 70% of your account in GLD options overnight is like cuddling up to Mama Grizzlies cubs. In this case you sold quickly but your intent was to stay in up to a couple of days. I urge you to reconsider your quest because this account has no chance to survive. (Even if you are the best trader on the planet)

 

[OddTrader]

I closed GLD position for $360.00 (Commissions included). I hate scalping, but I cannot pass up trading opportunities that show up during trading hours.

Day trading is not my thing because I am experimenting my trading rules for capital growth, so please disregard any position posted on this thread that generates less than 50% .

View attachment 161712

Next...

Now I think I seem to understand a bit more about your experiment.

Are you saying your target profit per trade (and hence ideally every trade placed) is 50% gain and also growth based on the updated account value? Not 50% on the initial capital that started this experiment, nor 50% on the bought options investment value per trade!

That's very exciting indeed!

Look forward to seeing your trades! Good luck!

 

[OptionGuru]

GLD Feb26 2016 114.00 call current bid $5.50

 

[Quest2016]

I admire your courage to put your trades out there for public scrutiny. However, I am blown away by your risk on each trade. Your "risk of ruin" is as close to 100% as it is possible to get. Professionals that I respect say 20% of your account at risk in options at any one time is the absolute maximum. Holding 70% of your account in GLD options overnight is like cuddling up to Mama Grizzlies cubs. In this case you sold quickly but your intent was to stay in up to a couple of days. I urge you to reconsider your quest because this account has no chance to survive. (Even if you are the best trader on the planet)

Thanks! I appreciate your comment! This is an important experiment to me. Hell will freeze over ten times before I could lose the capital outlay. I understand your premise, though.

 

[Quest2016]

GLD Feb26 2016 114.00 call current bid $5.50

Even if the current price is $10.00, I am not bothered by it. I will not hold any option trade for more than 2 trading days until the account hits $50K. At that point I will go for volatile stocks.

Will focus on stocks with price range $20 - $45 for growing the initial capital outlay, so I may not post trades on a weekly basis. However, I will update this thread with more of GDX trades which may be once or twice a week.