Questions by a newb

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bob2007

Hi, I've been trading equities and researched equities on and off for 7 years. I've made some decent picks like when i.e. GOOG when it went from 220 to 305 in a month or 2. However, that was probably my biggest gain and I feel 30% return a year is considered good in equities investing but definetly not so good for my pocket, given that I don't play with a whole lot of money.

I think options is a better alternative. I'm confident in my picks and I think giving up the typical 10% charge as per the stock price is not too much.

Question: Looking back, I thought GOOG would go to 240 (minimum) and 280 (maximum) when it was at 220 within 6 months. What kind of option would I buy to maximize profit? what would be the strike be and what would the expiry date I should choose? Would I choose a 1 year expiry to give me a bit more room? I know that prices certainly vary, but can you guys give me some pointers on the decisions.
 
Quote from bob2007:

Hi, I've been trading equities and researched equities on and off for 7 years. I've made some decent picks like when i.e. GOOG when it went from 220 to 305 in a month or 2. However, that was probably my biggest gain and I feel 30% return a year is considered good in equities investing but definetly not so good for my pocket, given that I don't play with a whole lot of money.

I think options is a better alternative. I'm confident in my picks and I think giving up the typical 10% charge as per the stock price is not too much.

Question: Looking back, I thought GOOG would go to 240 (minimum) and 280 (maximum) when it was at 220 within 6 months. What kind of option would I buy to maximize profit? what would be the strike be and what would the expiry date I should choose? Would I choose a 1 year expiry to give me a bit more room? I know that prices certainly vary, but can you guys give me some pointers on the decisions.
More...

If you aren't planning on doing anything fancy (spreads, straddles, strangles, condors, etc.) and just want to trade options in place of the stock then look at LEAPS. LEAPS are basically long term options. This will reduce your Theta risk (time decay) yet still be cheaper than buying the underlying stock.
 
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