What is the best method to sell Options on low volume stocks?

JesseJames - Be sure to talk to OX about commissions once your free trade credits are depleted. If they say no, wait a month or two and try again. My accounts there have never been all that active (mostly retirement $) and they budged quite a bit from the posted rates on the website.

I appreciate the referral fee offer, but it's not necessary. I once was eligible for a couple of referral fees when some relatives opened accounts, but the whole process was a hassle. I think I had to wait six months - nothing happened - and then my email inquiries were always routed to a different customer service rep. I gave up because it wasn't worth it. That's probably what they want people to do. :p

Other than the issue above, their customer service has been fine.
 
I was going with the assumption that you thought the underlying had run its course when you wanted out for $8 but couldn't get much beyond a $6 bid. At that point in time, why didn't you exercise and dump the shares?

I routinely use long ITM calls as a proxy for the underlying on swing trades. I exit when the underlying hits my limit or stop. I'm finally turning a decent profit, but it has nothing to do with the fact I'm trading options -- it's all about the underlying.
 
I got $2.15 on my wife's IRA and the ARIA Calls I kept in my account are $3.00x3.30 at one point today. I listened to your advice and my wife said she will make you all some Aprium or Pluot Jam since you helped me get her position out first.


With Option Expresses 'walking" program, is that a program that watches the underlying stock and moves our bids up if the stock goes crazy like ARIA did again today? Is there a forum to share our Option Trades we are buying intra-day or do you all like to keep that proprietary? I have nothing to hide, I don't buy massive blocks of stock so I can't move the Market.



Using what I learned on Elite Trader, I avoid the method of trading options that almost blew my account up in 2002 and 2008 when Option prices were distroted with heavy premiums and I bought Options that were going to expire in a couple of days. If I can share one thing about the Option Market, if you love a stock, please pay up for the contracts like I did with my ICE January $200 Calls $6.7-7.10) average. KORS January $80 $3.00, CME March $82.50 $3.40, WDC January $75 $3.00, BAC $1.35 for the $15 Calls, CRM $4.9 mid 2014 $52.50 Calls.



Thank you again for helping me get my brain on right, you all are too kind. Xandman, my book arrived today, thank you and can you comment about the idea of joining Bernie Shaffer's website and his ideas or Option Monster with Dr. J and his brother, are they good honest guys or like Jim Cramer (I don't like him) do you think?
 
They are definitely old pros in the business and I think listening to them has educational value.

Like Bill Gross, they are usually talking their own book. Also, taking a position is easy. it's how you manage the position is what determines your profitability. Stock traders scale their positions. Bond traders watch their duration. Option traders manage both, but each messes up our perception of the other.
 
Xandman, I will gladly share the biotech picks and get your ideas on how they are behaving from another set of eyes. I have a friend who worked for Crutt-Rotterdam as a biotech analyst and moved to Santa Barbara, California joining up with Argus Investment and finally moved to work with a Hedge Fund. The pay was not the greatest even after he brought great ideas forward, he is trading on his own money now.


He is loving Elan (ELN) now, how high do you pay up for Calls on expensive Biotech's like BIIB, PCYC, AMGN, GILD, ENDP? SRPT and RNA are interesting, SRPT keeps climbing back after getting slammed by their dismal drug progress. The VA's doctors has been prescribing ARNA's weight-loss drug (old Phentermine Phen-fenn base) with Topomax cocktail, what price range do you like to buy options at? I bought some additional BAC Calls, what's your take on the Banking sector? If William Ackman is positive on Freddie and Fannie, should we follow his bread crumb trails and follow MBI too?
 
I don't really buy biotechs though I've always been fond of big stodgy Pharma names for B&H.

I usually buy options when I perceive (imagine?) that IV is underpriced to what I think realized volatility will be.

The trade becomes directional when I expect mean reversion in the underlying.

Though, I have been thinking on doing a 6 month Bull Ratio spread on the SPX to start 2014 and then taking a very long vacation until VIX pops over 20 : ).
 
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