Options trading for a living

drownpruf · Oct 5, 2013

Quote from TSLexi:

If it wasn't a good strategy, why is it recommended for conservative trading styles?

Say what you want to mean.

Recommended by morons. Your last sentence is ebonical, and I cannot translate.

TSLexi · Oct 5, 2013

Quote from justrading:

You started with this;

Quote.

10-04-13 12:27 PM
Hi guys,

I'm thinking about trading options for a living. I have $20,000 saved up from my job, which I strongly want to get out of (escort), and I have had trading experience when I was in college.

My goal is to make at least $150/day. Since position sizing dictates I should only risk 10% of my total capital on a single trade, I need to make an ROI of 7.5%/day (not compounded, of course!). I plan to take the profits out of the trading account at the end of the week.

I plan on trading volatility, for example buying a call while shorting the underlying.

My questions are:

1. Do they make IV-based indicators, like a MACD, RSI, etc.?
2. Is $150/day a reasonable goal on a starting capital of $20,000?

Thanks!

End quote.

Now you have conviction about how to trade options, capable of defending a POV in such articulate terms.

Amazing.

Meds kick in?

Yes. From what I've been reading, DITM covered calls can return around 3%/month while protecting downside. So I could earn a yearly return of 42.6%, not counting dividends and the put premiums collected.

newwurldmn · Oct 5, 2013

Quote from TSLexi:

Yes. From what I've been reading, DITM covered calls can return around 3%/month while protecting downside. So I could earn a yearly return of 42.6%, not counting dividends and the put premiums collected.

Yes. This is true. All the professionals are doing it. It's a secret that the hedgefunds don't want you to figure out.

Can you post where you read it so it can be removed?

TSLexi · Oct 5, 2013

Quote from newwurldmn:

Yes. This is true. All the professionals are doing it. It's a secret that the hedgefunds don't want you to figure out.

Can you post where you read it so it can be removed?

http://www.investmentu.com/2011/April/deep-in-the-money-covered-calls-strategy.html

newwurldmn · Oct 5, 2013

I'll forward the article to Goldman Sachs so that it can be removed.

TSLexi · Oct 5, 2013

Quote from newwurldmn:

I'll forward the article to Goldman Sachs so that it can be removed.

You still haven't explained why this is a bad idea.

sellindexvol66 · Oct 5, 2013

Quote from drownpruf:

Recommended by morons. Your last sentence is ebonical, and I cannot translate.

You are aware of what my local hero P.T. Barnum said re what was born every minute?

Don't discourage these guys from selling to me my meat.

Squilly_D · Oct 5, 2013

Quote from stock777:

options will tear you a new one even faster than stocks, though most will lose all their money trading either so its a wash.

maybe options are a good way to start so you can blow up quickly and realize you know nothing.

Any financial product can tear you a new one if one doesn't know how to use it. Doing 1 $100 spread is one of the safest plays on the planet. Nothing comparable to this if one trades stock (you can use a stop loss but you are out once triggered; with the spread, there is a possibility that it comes back into favor).

Squilly_D · Oct 5, 2013

Quote from drownpruf:

Credit spreads = death.

Not if you learn how to trade them properly. This is a totally untrue statement. Thatâs like saying Futures = death.

TSLexi · Oct 5, 2013

Why do you act like this?

Bull put spreads are pretty safe...risk is limited to the difference between strikes, and profit is limited to the net credit.

The October 13 CVX 110 put is trading at $0.28, and the 115 put is trading at $0.57. My max profit is $29/contract, and my max loss is $500/contract, for a ROI of 5.8%.

As long as CVX doesn't drop below $114.71 (currently it's trading at $118.13) by expiration Friday, I stand to make a profit.