yet another young trader with outrageous claims

[yayt]

Quote from forex-forex:

You need $25,000 to day trade options, I believe you are starting with $10,000.

I did start with 10K and am up since I started;

You are correct, I still have to wait for the option trades to settle, which takes 1 day, so by market open the next day I am able to trade again.

Was that what you were saying?

Sorry, to clarify, I am not making multiple round trip trades per day, I make one trade (with entries spread out) and cash out at once later on in the day. So yes, I am not day trading options in the sense of making multiple roundtrips in a day.

 

[forex-forex]

Quote from yayt:

I make one trade (with entries spread out) and cash out at once later on in the day. So yes, I am not day trading options in the sense of making multiple roundtrips in a day.

Opening and closing an option position the same day is considered a day trade. After 3 day trades in a 1 week period - or maybe 5 trading days - an account with less than $25,000 might be suspended for 90 days. I don't know the exact details but you should check them out.

Look into trading YM,ES and NQ mini futures, they pack more punch than options and you don't have to worry about the PDT, pattern day trading rules.

 

[GTG]

I don't get your account suspended for being a pattern day-trader. You only lose the ability to use margin for awhile....if the guy is only going long options, he doesn't need margin anyway.

 

[kinggyppo]

Quote from yayt:

Wow, that attack came out of nowhere

I'm actually curious now haha, what is your strategy (and if you don't mind sharing, performance)? (Not that I'm agreeing with the other poster's post)

Basically, I arrived on my strategy before I opened my brokerage account (actually, my "discovery" was the only reason I actually did open the account).

The basic premise behind this "pseudo-arbitrage" strategy is looking at "mispricings" according to comparisons against other securities and entering and exiting trades at points statistically likely to yield a large enough margin of profit. "Statistically likely" is from my analysis of years of daily data combined with, recently, months of tick by tick data.

It has been working pretty well, and only recently have I been getting more comfortable (cocky? haha) with risking a larger portion of my capital on each trade.

One of my biggest problems has been managing bid/ask spreads as wide as 50 cents. While I still have been profitable, (which I guess attests to an "edge") this has led me to consider other strategies or even other securities from the "favorite" ones Ive been trading. Once I am able to day trade stocks, I hope to get past the obstacle of wide spreads by trading the stocks themselves, but unfortunately this will eliminate the leverage which I feel I need.

Since there is more liquidity and considerably smaller spreads on the stocks themselves, I am also working to make a system that will take care of entering/exiting the actual stocks automatically. Because I will be able to take advantage of the many, smaller mispricings that occur throughout the day (that i cant take advantage of because of the 50 cent + spreads) I actually may be able to be even more profitable.


With regard to technical analysis, how successful do you guys feel things like stochastic, channels, bollinger bands, etc. are? It seems that since everyone uses them there's isn't much advantage? Or is it more like since everyone follows it, it works? Or, similar to Elliot Wave Theory, it's just the natural order of things for it to happen and thus people can take advantage of it?

If you are directionally trading options then you want the spreads to be as thin as possible. To my knowledge spy and qqqq
at most a tick apart on the most liquid strikes with the newer penny pricing. Example GS is a stock I like to play with for direction, however the spread is routinely .30 to .40 wide. I have to be pretty confident on the move, else you are down .40 cents
(40 dollars) a contract , this is before the position starts moving against you, remember you can gear your leverage in options to whatever you want, so you can trade really hot or keep more neutral. I would master the basics first, it makes me laugh when someones first option trade is an iron condor, oh well to each his own. Good trading.

 

[yayt]

Quote from kinggyppo:

If you are directionally trading options then you want the spreads to be as thin as possible. To my knowledge spy and qqqq
at most a tick apart on the most liquid strikes with the newer penny pricing. Example GS is a stock I like to play with for direction, however the spread is routinely .30 to .40 wide. I have to be pretty confident on the move, else you are down .40 cents
(40 dollars) a contract , this is before the position starts moving against you, remember you can gear your leverage in options to whatever you want, so you can trade really hot or keep more neutral. I would master the basics first, it makes me laugh when someones first option trade is an iron condor, oh well to each his own. Good trading.

Hey,
You are very right, I just bought some puts and am already out 40 cents because of the spread... and my confidence is waving, haha.

Whose first trade was an iron condor? I'm not sure if you were referring to me in this post.

Also, no trading yesterday.

 

[yayt]

Quote from forex-forex:

Opening and closing an option position the same day is considered a day trade. After 3 day trades in a 1 week period - or maybe 5 trading days - an account with less than $25,000 might be suspended for 90 days. I don't know the exact details but you should check them out.

Look into trading YM,ES and NQ mini futures, they pack more punch than options and you don't have to worry about the PDT, pattern day trading rules.

Hey, yes this was another reason I moved towards options, with stock this rule does apply, and so I could make only 3 day trades per 5 business day period. With options I can make as many trades as I have settled funds, but thanks for pointing this out.

Also, I will look into trading the e-minis for the future, but will definitely be reading a lot before I jump into them since I have pretty much no idea how they work.

 

[kinggyppo]

Quote from yayt:

Hey,
You are very right, I just bought some puts and am already out 40 cents because of the spread... and my confidence is waving, haha.

Whose first trade was an iron condor? I'm not sure if you were referring to me in this post.

Also, no trading yesterday.

Like I said spy and qqqq have some of the tightest spreads and great liquidity; try your system or backtest it on these, slippage is much less than equity options.

 

[forex-forex]

Quote from yayt:

Also, I will look into trading the e-minis for the future, but will definitely be reading a lot before I jump into them since I have pretty much no idea how they work.

If you are successful in short term trades with qqqq options then NQ futures might be better, each 1 point move is worth $20.00 and commissions are cheap, a 1 point move won't even move the options. I have made a few YM mini-dow trades.

Once you try future contracts you might not go back to the options.

 

[yayt]

Quote from forex-forex:

If you are successful in short term trades with qqqq options then NQ futures might be better, each 1 point move is worth $20.00 and commissions are cheap, a 1 point move won't even move the options. I have made a few YM mini-dow trades.

Once you try future contracts you might not go back to the options.

Sounds good I'll definitely be looking into this this weekend.

A measly $165 on the puts today, done for the day.

 

[yayt]

Quote from forex-forex:

If you are successful in short term trades with qqqq options then NQ futures might be better, each 1 point move is worth $20.00 and commissions are cheap, a 1 point move won't even move the options. I have made a few YM mini-dow trades.

Once you try future contracts you might not go back to the options.

Sounds good I'll definitely be looking into this this weekend.

A measly $165 on the puts today, done for the day.