What I am about to share in almost not even an option play...But it is the safest play I have seen. I have learned this move from my wife. Find an industry leader (ADM, Walmart, Lowe's, McDonald's), buy it after a bad quarter. Just enjoy the dividend for a few quarters or years. When the stock comes back strong, do a covered call way out of the money. You may get another 1-3% and the stock won't be called away. Hold onto the stock and just wait...Patience!! You have kept industry leaders and hopefully they don't get called away. You enjoy the dividend and "some" option money. A very conservative play...
What are some Basic Strategies that have Worked for You?
- Thread starter zghorner
- Start date
Hull is my go to bible.
One humble suggestion: If you are like me a mom and pop amateur retail, not good at maths, you must try to understand the basic principles behind how options are priced based on the relationship between the underlying and its derivatives, how time and volatility (noise) affects the pricing of the derivatives. Most of the time options are priced very efficiently so neither retail buyers or retail sellers have any edge and at best you breakeven. But occasionally some options will be mispriced and you can make money trading those.
If you like Taleb, you can also follow him, hunt for black swans and make a killing.
alright ill invest some time learning more about options pricing thank you.Hull is my go to bible.
One humble suggestion: If you are like me a mom and pop amateur retail, not good at maths, you must try to understand the basic principles behind how options are priced based on the relationship between the underlying and its derivatives, how time and volatility (noise) affects the pricing of the derivatives. Most of the time options are priced very efficiently so neither retail buyers or retail sellers have any edge and at best you breakeven. But occasionally some options will be mispriced and you can make money trading those.
If you like Taleb, you can also follow him, hunt for black swans and make a killing.
you being sarcastic about hunting black swans???
Not at all, I was quite serious.
This is called overkilled, but they are not black swans. Poor birds, mistaken ID.
Along this line of thinking is waiting for a quality stock to be mis-priced on news, or better said, an over reaction to negative news. One I recall is Capital One. This is mentioned in The Big Short.
You can read about it here:
https://www.bookcaps.com/the-big-sh...shcornwall-capital-unlikely-captitalists.html
Selling premium in the options market and then letting time decay the options away. After about a 50% gain and usually buy them back depending on how far the options and the money.