Who is really making a living trading options??
- Thread starter nnfx
- Start date
Large or sticky capital is a legitimate edge.
Though I don't know if this guy has the kind of wherewithal for it to be an edge for him.
Options went down the tubes for trading intraday, in Locked markets and Arbing.
Making markets off the floor also went to shit when the did away with the Nickle spread.
Intra-day trading Options, is dead.
I'm sure some sole bandits are trying to trade them and may make some money. But overall, Dead.
Making markets off the floor also went to shit when the did away with the Nickle spread.
Intra-day trading Options, is dead.
I'm sure some sole bandits are trying to trade them and may make some money. But overall, Dead.
"Ok, lets talk about what really gives u an edge in trading options
1) i understand all those 20-25 strategies and i paper traded them but overall i was at breakeven and it was just gambling becouse without knowing where the stock will go or whether the certain commodity will rise or fall this is just gambling.
2) Options are fairly priced so that neither sellers or buyers are in initial advantage. I understand this concept.
So who in here is actually making money trading options and how do you guys do it? I know some of you dont want to share your secret methods ...but for those of you who are kind to give some advice i have simple question
-->>> what kind of strategy do you use and what excatly gives you and EDGE? (is it finding some mispricing in volatility or sth else? trading the earnings?)"
In my experience:
Options trading is roughly 10 times more difficult than trading stocks.
The depth of knowledge and experienced required to do it properly is enormous to do well. This eliminates many retail traders who want the easy way out. (Buy at the green arrow, sell at the red.)
Options are a vehicle so the statement "edge in trading options" is a bit nonsensical. One can trade an edge in options. One can know more about options than 99% of traders and thus gain some edge etc. Reading 5 books on options, or taking a course, and then gunning the option market makers is just silly. You answered your own question in comment number one.
Many retail traders overtrade their account balances and choose options because they don't have money. I heard of one retail guy who bought 2200 straight call options based on a news article, closed his eyes, and won big. Assuming that was true, is he a successful options trader?
Options are almost always fairly priced. Knowing when they are not is an art and of course can lead to an edge but you need good capitalization behind your edge. Your question makes no sense to me.
Most retail traders are looking for an edge. There is no edge in a tool, generally speaking, and retail traders wouldn't be able to use it. Those with multi-billion accounts could use it. Better to piss into the ocean in my view.
One more thing. If you think when I place my option trade, I KNOW anything, then you need to go back to school. If any trading entity (market makers included) could trade 100% right, then you would already know their name. They would have all the money in the game within a year. Trading is about probabilities, not certainty. If you can't deal with that, then you are playing in the wrong game and you will get hurt.
Hopefully that helps you out.
1) i understand all those 20-25 strategies and i paper traded them but overall i was at breakeven and it was just gambling becouse without knowing where the stock will go or whether the certain commodity will rise or fall this is just gambling.
2) Options are fairly priced so that neither sellers or buyers are in initial advantage. I understand this concept.
So who in here is actually making money trading options and how do you guys do it? I know some of you dont want to share your secret methods ...but for those of you who are kind to give some advice i have simple question
-->>> what kind of strategy do you use and what excatly gives you and EDGE? (is it finding some mispricing in volatility or sth else? trading the earnings?)"
In my experience:
Options trading is roughly 10 times more difficult than trading stocks.
The depth of knowledge and experienced required to do it properly is enormous to do well. This eliminates many retail traders who want the easy way out. (Buy at the green arrow, sell at the red.)
Options are a vehicle so the statement "edge in trading options" is a bit nonsensical. One can trade an edge in options. One can know more about options than 99% of traders and thus gain some edge etc. Reading 5 books on options, or taking a course, and then gunning the option market makers is just silly. You answered your own question in comment number one.
Many retail traders overtrade their account balances and choose options because they don't have money. I heard of one retail guy who bought 2200 straight call options based on a news article, closed his eyes, and won big. Assuming that was true, is he a successful options trader?
Options are almost always fairly priced. Knowing when they are not is an art and of course can lead to an edge but you need good capitalization behind your edge. Your question makes no sense to me.
Most retail traders are looking for an edge. There is no edge in a tool, generally speaking, and retail traders wouldn't be able to use it. Those with multi-billion accounts could use it. Better to piss into the ocean in my view.
One more thing. If you think when I place my option trade, I KNOW anything, then you need to go back to school. If any trading entity (market makers included) could trade 100% right, then you would already know their name. They would have all the money in the game within a year. Trading is about probabilities, not certainty. If you can't deal with that, then you are playing in the wrong game and you will get hurt.
Hopefully that helps you out.
Initial. Edge is proven in practice. Either you gain an edge on the vol-line or you sell index skew and hedge discretely. You will do better in options if you have an edge in price or volatility.
Path-(in)dependency is the hook. If you could accurately predict variance you would never be a net buyer of options (in $-terms).
The best option player I've ever seen tends to wait until the last 2 weeks before expiration and trades size. He mainly sticks with the QQQ with price per contract ranging from 0.25 to 1.50 and contract position size from 200 to 1200.
This morning, he bought 100 AAPL Nov 435 contracts for $3.00. He hasn't announced a sell yet but that bid got up to about 5.20 this morning. That's $22,000.
Within the past 2 days, as the QQQ was falling, he bought a little less than 200 58 Oct calls for ~1.35 and 500 around 1.25 (whole premise was market anticipation of Apple results). He sold out as it rose for around a $16,500 profit. On the 3:00 PM EST time rise yesterday, he bought 1200 contracts at 0.53 and sold at 0.75, so, just over 25K profit.
Look, I have no way of auditing his records to know if he's real or not, but, since he's a private trader posting to a board with absolutely no ties to vendoring or mentoring and since I've been watching his posts for 2 years, my conclusion is that he's on the level.
I think size matters a lot in the game of becoming a successful buy-side options trader. This guy tends to get on a roll of 3-6 wins, getting 10K to 25K per win with like 0.30 to 0.50 moves in the QQQ (super liquid and you get 60/40 tax treatment). When he gets a loser, it's like 5-10K, losing like half of what he had in the play.
It's probably not what any of you want to hear, but large contract size with sub-dollar moves on a super liquid index is the most likely way of making it in that game (for a 6-7 figure annual income).
[Personally, I have absolutely no stomach for that game]
This morning, he bought 100 AAPL Nov 435 contracts for $3.00. He hasn't announced a sell yet but that bid got up to about 5.20 this morning. That's $22,000.
Within the past 2 days, as the QQQ was falling, he bought a little less than 200 58 Oct calls for ~1.35 and 500 around 1.25 (whole premise was market anticipation of Apple results). He sold out as it rose for around a $16,500 profit. On the 3:00 PM EST time rise yesterday, he bought 1200 contracts at 0.53 and sold at 0.75, so, just over 25K profit.
Look, I have no way of auditing his records to know if he's real or not, but, since he's a private trader posting to a board with absolutely no ties to vendoring or mentoring and since I've been watching his posts for 2 years, my conclusion is that he's on the level.
I think size matters a lot in the game of becoming a successful buy-side options trader. This guy tends to get on a roll of 3-6 wins, getting 10K to 25K per win with like 0.30 to 0.50 moves in the QQQ (super liquid and you get 60/40 tax treatment). When he gets a loser, it's like 5-10K, losing like half of what he had in the play.
It's probably not what any of you want to hear, but large contract size with sub-dollar moves on a super liquid index is the most likely way of making it in that game (for a 6-7 figure annual income).
[Personally, I have absolutely no stomach for that game]
is his name neke?
