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Anyone trade options?

Jase

By Jase,
in Huddle Lounge

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Jase Apprentice

Jase

Posted
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I got approval recently to trade options, I can do anything but naked writing.

 

Over the past couple of months, I've been educating myself.  It seems like you can make a good return as long as you know what you're doing and don't get too greedy.

 

Anybody have any tips?

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thefuzz Mentor

thefuzz

Posted
Posted

I got approval recently to trade options, I can do anything but naked writing.

 

Over the past couple of months, I've been educating myself.  It seems like you can make a good return as long as you know what you're doing and don't get too greedy.

 

Anybody have any tips?

 

I looked into it years ago, but I just felt the risk wasn't worth the reward.

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Happy Panther Grand Master

Happy Panther

Posted
Posted

I got approval recently to trade options, I can do anything but naked writing.

 

Over the past couple of months, I've been educating myself.  It seems like you can make a good return as long as you know what you're doing and don't get too greedy.

 

Anybody have any tips?

 

My only advice is not to think of options as a way to generate return in and of itself but rather a way to tweak your positions to hedge and/or massage risk. Have a very specific goal in mind. I think too many people look at the potential big payday for small investment and piss their money.

 

If you don't have a specific goal stick with equities.

 

Sounds like you are doing your research.

 

My buddy loves covered calls and I have sold calls on occasion for a very specific reason. But I tried to explain to him that a covered call limits the upside. Who cares he says, if the strike price is reached I will get 12%. Great...but if you look back at your portfolio it is the occasional 30%+ swing in a stock that drives your overall return. If you remove those shock gains you lose profit over time even though it feels like you are making money. 

 

Anyway there is a textbook by Bodie Kane and Marcus that has some great chapters on options and what all the Delta Vega, Gamma risk crap is if you haven't already learned past that. 

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Jase Apprentice

Jase

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My only advice is not to think of options as a way to generate return in and of itself but rather a way to tweak your positions to hedge and/or massage risk. Have a very specific goal in mind. I think too many people look at the potential big payday for small investment and piss their money.

 

If you don't have a specific goal stick with equities.

 

Sounds like you are doing your research.

 

My buddy loves covered calls and I have sold calls on occasion for a very specific reason. But I tried to explain to him that a covered call limits the upside. Who cares he says, if the strike price is reached I will get 12%. Great...but if you look back at your portfolio it is the occasional 30%+ swing in a stock that drives your overall return. If you remove those shock gains you lose profit over time even though it feels like you are making money. 

 

Anyway there is a textbook by Bodie Kane and Marcus that has some great chapters on options and what all the Delta Vega, Gamma risk crap is if you haven't already learned past that. 

 

I like the flexibility it gives me.  I have a pretty small investment account at the moment (hasn't always been that way) and I like being able to mimic some of the things I used to do when I had 10x the balance.

 

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Jase Apprentice

Jase

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if you are going to be doing any trading...just make sure the other guy has a smaller penis than you and that his wife has to be at least as good looking as your wife...preferably hotter

 

Any tips on how to check if the other guy has a smaller penis?

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pstall Newbie

pstall

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Start watching options action on cnbc. Get a feel for the ebb and flow and better able to anticipate where a stock might be headed.

Then get to understand fundamental charts so you can see a head and shoulders chart or a bottom or when a breakout or ceiling may be. But only do covereds man.

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