Interested in trading options?

sunrisetrading

Hi,
We are final year business students, currently undertaking a group project ' Sunrise Online Options Trading Co'. The attached link is a customer survey and will be used for DCU assignment purpose only.We will appreciate if you could spend 2 mins to fill in the survey.

Thanks very much for your time!

Please click the link below:

http://www.surveymonkey.com/s.aspx?sm=4xNjv_2fAj7OZLcw_2fto1ZxcQ_3d_3d

Karoma

Done.

sunrisetrading

I've been trading American Options for the last 6 months. Really had great fun. I enjoy doing the Technical and Fundamental analysis.Applied a good few strategies( Calender Spread,Long Straddle,52 week High/low, as well as some directional trading). I lock my profits usually within a few days after placing my trades. Made some significant profits within a few days.I am happy with what I am doing now at spare time.

As a beginner with trading options, I summarized the following personal memo:

1.Always make sure you pick the right stock
2.Do not sell naked
3.dont not be greedy,be good at time and money management
4.Buy cheap options only
5.Buy options with expiration date at least 60 days from now
6.Keep your ear open to news
7.Hav a fancy PAD with u,ensure u can close ur trades no matter where u are.

Just wondering if any one is also trading options, can exchange some practical opinions and techniques.

xebec

One thread on the same topic is enough guys. No need to post it twice.

ixus

Hi Sunrise,

You might get more of a discussion at www.trade2win.com

I've only ever done virtual trading but plan on getting into the real stuff when I can get a it of cash-flow going.

Out of interest :
What capital did you feel was sufficient to start up?
What have been your influences?
Who do you use?
When you started off, how much exposure have you left yourself open to?

Any other info?

This is open to anyone else who wants to share of course

I know the strategies you're implying, I just haven't put them into use with capital yet, still playing with a simulator!

Article43

sunrisetrading wrote: »

I've been trading American Options for the last 6 months. Really had great fun. I enjoy doing the Technical and Fundamental analysis.Applied a good few strategies( Calender Spread,Long Straddle,52 week High/low, as well as some directional trading). I lock my profits usually within a few days after placing my trades. Made some significant profits within a few days.I am happy with what I am doing now at spare time.

As a beginner with trading options, I summarized the following personal memo:

1.Always make sure you pick the right stock

Incorrect: Picking the right stock has nothing to do with making money from trading !

2.Do not sell naked

Incorrect: This is what the pros want you to think as over 80% of traded options expire worthless - but not for the light hearted !

3.dont not be greedy,be good at time and money management

Correct

4.Buy cheap options only

Incorrect: Sell expensice options at the right time !

5.Buy options with expiration date at least 60 days from now

Incorrect: Sell expensive options with at least 30 days to expiration.

6.Keep your ear open to news

Incorrect: The only thing you need to know about news is at what time the reports are released - and do not trade at those times !


7.Hav a fancy PAD with u,ensure u can close ur trades no matter where u are.

Not realistic unless you are daytrading and are in complete control !

Just wondering if any one is also trading options, can exchange some practical opinions and techniques.

Yes, I do, but only Index Options and only selling, no buying. As for sharing, not at the moment as my main focus is daytrading stocks and index futures.

Rgds,

Article43

Fremen

2.Do not sell naked

Incorrect: This is what the pros want you to think as over 80% of traded options expire worthless - but not for the light hearted !

I think the point to note here is that if 80% of options expire worthless, some of the remaining 20% will expire deep in the money: this is what you need to hedge against. You should be thinking in terms of expected value rather than percentage of options expiring profitably.

An analogy would be rolling a die: if you roll a six, I pay you ten euro, but if you roll anything else, you pay me one euro. Now, over 80% of your rolls will be less than worthless, costing you a euro. However, over the course of many rolls, I will lose money by "selling" you the chance to play this game.

ircoha

sunrisetrading
Always make sure you pick the right stock

Article43
Incorrect: Picking the right stock has nothing to do with making money from trading !

Amazing grace, how sweet the sound
That sav’d a wretch like me!
I once was lost, but now am found,
Was blind, but now I see that Picking the right stock has nothing to do with making money from trading .

Mikel

Fremen wrote: »

You should be thinking in terms of expected value rather than percentage of options expiring profitably

Exactly.
strange that someone so confident in their own ability to trade would not know this......

Mikel

sunrisetrading wrote: »

I've been trading American Options for the last 6 months. Really had great fun. I enjoy doing the Technical and Fundamental analysis.Applied a good few strategies( Calender Spread,Long Straddle,52 week High/low, as well as some directional trading). I lock my profits usually within a few days after placing my trades. Made some significant profits within a few days.I am happy with what I am doing now at spare time.

As a beginner with trading options, I summarized the following personal memo:

1.Always make sure you pick the right stock
2.Do not sell naked
3.dont not be greedy,be good at time and money management
4.Buy cheap options only
5.Buy options with expiration date at least 60 days from now
6.Keep your ear open to news
7.Hav a fancy PAD with u,ensure u can close ur trades no matter where u are.

Just wondering if any one is also trading options, can exchange some practical opinions and techniques.

You really just need to be aware that what you are trading with options is volatility. If they are 'cheap' it is for a reason.
The likelihood of a stock going up or down has no bearing on the price of the option. Vols are at very high levels lately, your call is whether you see that continuing or abating

Goodluck2me

Mikel wrote: »

You really just need to be aware that what you are trading with options is volatility. If they are 'cheap' it is for a reason.
The likelihood of a stock going up or down has no bearing on the price of the option. Vols are at very high levels lately, your call is whether you see that continuing or abating

If you expect high volatility then you could just buy a call and a put, straddle the market.
Often just one facet of information can be profitable.

Dollarhane

I think you guys should consider covered calls a bit more. I have about 20% uncovered calls which are long or in a strategy and the rest is all either shorted stock or stock which has been covered. Reduces risk and can give quite a nice premium without when selling. Expiry date should be the next month. But usually I would get a return of about 5% a month and one can STO and buy back as many times as the stock rises and falls.
Its a nice way to sleep at night if 80% of your fund is in more or less safe hands. Of coarse, you have to pick the right stock with the right volatility but Apple is looking very nice at the moment.