What sets options traders apart from stock traders?

Quote from christianhgross:

Trading stocks is like skiing on snow. You go to the top of the hill, look down the hill and start skiing and hope that you don't fall. With skiing on a groomed hill, what you see is what you get.

Trading options is like skiing in powder snow. Just because you can ski on snow does not mean you can ski in powder. With powder there is not only skiing, but being able to gauge the quality, depth, and type of powder. Many more moving parts.
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Good analogy but I'd go with trading options is like skiing in a mogul field on a black diamond slope, occasionally in white out conditions :)
 
>> If you don't have the capital, you will get flagged as a pattern daytrader (no more than 3 buy/sells in a day over a rolling 5 business day period, the 4th gets you flagged) so you're trades have to be very selective and worth the effort. Or you will be swing trading positions held overnight. <<

If you maintain the 25g minimimum, you can hold up to 100g intraday and you can roll it over as many times as you like.


>> Option traders react very fast, far faster than stock traders. The only way to get near a bottom or go short near a top is to put it in ahead of time and be near the front of the line. Otherwise you are likely going to be ahead of the market to get filled in most cases. <<

LOL. You trade as fast as you want, regardless of whether you trade stocks or options. Using options doesn't get you in the front of the line any faster than an equity trader.
 
Quote from spindr0:

FWIW, the PDT limit is 4 day trades in the SAME security in the rolling 5 day period.
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absolutely, completely wrong.

it is 4 day trades in ANY security.

buy MSFT, sell MSFT.
buy CSCO, sell CSCO
buy DELL, sell DELL
buy IBM, sell IBM.

you're now a PDT.
 
Trading options is like chess.
trading just equity is like checkers.
trading forex is like tic-tac-toe (the only winning move is not to play)
 
If you want leverage, you should join prop.

Option trading is for those who like to add more dimensions instead of directional bet.

If you are good at trading stocks, don't trade options, just join a prop firm to get the leverage that you want.
 
I can't speak for other options traders. But I am not smart enough to trade stocks.

I have no idea what a stock is going to do. But to sell options, all I need to know is what it is not going to do, or at least what it is not going to do very much of. I find it hard to be 'right' but not nearly so hard to be 'not very wrong.'

And, I don't even have to be right about price at all; I only need to be sorta right about volatility.

The danger comes in the leverage. But nobody is forcing you to take full advantage of that feature. You can trade as small as you want.
 
You would be better to use the leverage of options on other side of equation. Maintain the same profit outlook while you reduce the risk and exposure. Make the same money safer.
 
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