Is it possible to be good at stock trading but not at option trading?
Is option trading more difficult than stock trading?
What are your thoughts?
Is option trading more difficult than stock trading?
What are your thoughts?
Stock trading vs option trading
- Thread starter stockoptionstrader
- Start date
They are two different product. If they were the same ... Only one of them would actually exist =D Options are a bit more complex than Stocks or Futures ... Trading Stocks and Futures is like trading the Option's Delta (Monyness) only. While trading Options you're exposed to more factor than Monyness alone (Like Time, Volatility & Co). So you can thrive with linear products (Stocks & Futures) but fail with non-linear ones (Options). If it's more difficult or not depends on your strengths and weaknesses. Aha ... Don't ask a fish to climb a tree. However Exotic Options need a team to be traded contrary to Vanilla (More Straightforward) ones that a retailer could monitor alone.
I already made money while OTM with Options. Inversely I already lost by being ITM ... So you definitely don't trade Options as you would trade Stocks or Futures.
I already made money while OTM with Options. Inversely I already lost by being ITM ... So you definitely don't trade Options as you would trade Stocks or Futures.
It's always possible to be good at one thing in the market, and perform poorly in another. -- The marketplace is not a video game, where you progress or succeed based on levels of perceived progressing difficulty.
Generally speaking, options trading is more difficult though then stock trading.-- With options, you're essentially holding a bomb, or making a bomb
...but, bombs Can be Good.
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Option trading is more difficult, because you have to manage the effects of volatility and time decay on the option value.
But, my guess is, if you're proficient at trading the underlying, you probably wouldn't be so bad at trading the derivative.
General pros/cons:
Stocks are usually more liquid than the options.
Options take less capital to control a similar amount of stock, so risk can be reduced.
But with that risk reduction comes reward reduction, unless you're buying DITM.
But, my guess is, if you're proficient at trading the underlying, you probably wouldn't be so bad at trading the derivative.
General pros/cons:
Stocks are usually more liquid than the options.
Options take less capital to control a similar amount of stock, so risk can be reduced.
But with that risk reduction comes reward reduction, unless you're buying DITM.
It took me much less time to get profitable with options than anything else I learned before to trade, but that is not to say they are easy, I just have been trading very long time. Unlike most who are into the Greeks, I am purely directional as I can read underlying charts decently. I had been using options to hedge Commodities for longest of time, but just been trading options last 3-4 years to make profits.
I think any market is like the rest, more time spent learning about them, paper trading, back testing, you bound to get good at it. It wasn't till 18 months later did I start trading options for a profit instead of just hedging.
I think any market is like the rest, more time spent learning about them, paper trading, back testing, you bound to get good at it. It wasn't till 18 months later did I start trading options for a profit instead of just hedging.
options
stock trading is more difficult if you trade with stops etc , option trading for weekly swing gives you the time for your trades to materialize.You need holding power with leveraged trading , cash stock trading can take out your stops , and return to orignal price.
stock trading is more difficult if you trade with stops etc , option trading for weekly swing gives you the time for your trades to materialize.You need holding power with leveraged trading , cash stock trading can take out your stops , and return to orignal price.