Real-world Leverage/Liquidy for Max Profits

Quote from Look4aSine:



JJacksET4, would I really be able to buy 67 calls without endless partial-fills or having to up the bid?
I'm very interested in this exact question all along. I've done the math. 50-60 contracts seem undoable to me.
Then again I've only dealt with the personality of stocks.

And thanks for the replies everyone.
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Sorry, I didn't see your post earlier. I really don't think there would be ANY issue at all buying that many options when you are talking about MSFT NTM, etc. I mean there was 4000+ volume with 50K open interest on the Aug 26s. I think people make way too big of an issue about buying larger quantities - it's really only an issue with much less liquid stocks or of course, if you were buying 1000s of options.

I guess I don't know why you say "50-60 contracts seem undoable to me." If the order was placed at the ask or maybe 1 cent higher or so, it would be very possible to fill quickly.

JJacksET4
 
FYI, my posts are delayed. I guess since I am new.

Thanks, JJacksET4, you have definitely helped persuade me that I need to start some price watching. Of course, with all the options in a chain, I could really use some more help with narrowing the field.

This goes back to my outlandish comment about when I "know" a movement will occur. For me (or anyone else actually), this only happens occasionally. So I want to get it right when it does happen.

Therefore, in looking for the right option, I wish to know things like...
Is it better to start in-the-money, for a better delta? (but less contracts)
Should I focus on 1-month for more liquidity? (I think it's too short)
Or, is 2-month just as good?
I'm not really sure what else I should even ask, what else?

Thanks again, that should be more than enough for me. Thanks.
 
You want reward ? You have to take risk.

In your scenario of knowing something's going to happen I'd just buy slightly OTM calls and pray...

But if you're going to risk 5k and try to make 30k in one trade I'd say your chance of success is very small... and you'll probably lose most of it or all of it.

Why do you just goto Vegas and put it all on black twice ? Better odds and you'll get a free drink.
 
the spx is approaching this upper tl in a narrowing triangle,if it holds and reverses the lower tl is about 100 points away,if you catch it right and the scnario plays out,u should be able to buy (10 for $1000)the 1305 weekly puts for a buck,and sell em for 55(10 at $55000),in reality ,you buy em and it doesnt happen by friday,your options go out worthless and it drops the following week,or we break the tl and rally,you spent 20 % of your capital and u have 4 more chances,if you bought one the return is lower but you have 50 chances,dwelling on longshots is a fast track to the poorhouse
 

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Happy 4th everyone.

Whistlingleaf, sorry, but prayer is not a strategy I will ever have in my toolbox.

Ammo, your example with the SPX blows my mind. If that sort of power exists, WOW, are you for real? Of course, I can only assume you are for real based on the fact you have over 10,000 posts and because I can see your experience in your TA. It makes me want to hurry-up my option's education. I can't complain though. I did well trading just stocks last week. You mind if I ask how you did? I bet you were like me, you "knew". Anyway, weekly SPX? Interesting. But, it seems a bit too risky. I typically need 7-10 trading days for a movement to play-out.

Something else about me. For years I've only traded $4-$8 stocks, meaning, when I start doing options, I will also need to start following higher priced underlying stocks. I know with stocks, each one has a limit of shares that would become hard to fill. Well, I want to follow stocks that have enough options liquidity to easily handle 100+ contracts at a time. Of course, I'll start much lower. I also prefer US stocks since per the SEC they must follow the GAAP. What I don't know is if it is smarter to trade options in very high priced stocks, or maybe even the indexes. Ammo's example with the SPX makes me think I should focus on an index. Or maybe GOOG since it is very high priced. I'm clueless about price correlation as it relates to profit expectation.

To recap, I would appreciate any insights regarding:
List of underlying US stocks (high liquidity, high priced ones)?
ITM vs. ATM vs. OTM (is there a distinct advantage with one way over another)?
Expiration: decay, liquidity, price (I need 2 weeks, what's an optimal exp.)?

Thanks again.
 
Quote from ForexForex:

UPDATE

  • Bought 10 more @ $0.13
  • Average price $0.20
  • Total debt $253.00
More...



  • Account Balance: $5000.00 - $253.00 = $4750.00
  • Next week we progress to a $500.00 trade for your quest to $30,000
 
"Do the math and I think you will care. Even with the paltry $100 to $200 returns you will be up to your $30,000 target in no time.

I will post a live two day $100.00 trade this Wednesday July 6, 2011 and show you how easy it is to get 100% return by Friday July 8, 2011. Be sure to check back then. "




Uh, thought you were gonna show us how easy it is???
 
if you know what is going to happen, just make that trade over and over. if you keep rolling your gains, you win bigger and bigger.
 
Well, I've spent some time watching the L1's of a variety of different priced options (stocks/indexes). And it appears that the higher the underlying price, the bigger the movements in the option's "value". But, it also looks as if liquidity could be a problem, which is what I've been worried about all along.

Specifically, I'm seeing that the option's bid/ask range (ie. the value) can go up/down in large amounts with no trades having come through. Naturally, I assume it is because people are changing their orders.

Anyway, I will keep watching with the hope of answering most of my own questions, but I do still have one I wish to have answered here:

A list of underlying US stocks/index/etfs (high priced ones) with options (high liquidity)?

So far: GOOG, NDX, SPX
 
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