Option trading Thread

[NiR]

there is a investing thread already but thats basically of people trading stocks. i have been trading stocks for 1 year and i started option trading this year. So i figure i find more people who option trade so we can post good lines here. i normally option trade technology stocks like aapl/goog. my last 2 trades were horrible but i am still learning. so lets just talk about options trading on this thread. nothing else.

i short calls btw.

[uracowman]

lol @ trying to start an options thread

[NiR]

lol @ trying to start an options thread

why? not many people trade option here?

[uracowman]

why? not many people trade option here?

you're trying to start an extremely complicated topic on a message board.

[craigcmead]

is this secret rep trading thread?

[_TG_]

option me some reps

[vifferlv]

in wat the hell. Started on options about 2 years ago. Mainly boring strategies with boring stocks. Covered calls, naked puts, and vertical spreads usually about 3-6 months out with deltas bout .25 (.350 for the misc) or below. Mostly stable bluechips like WMT XOM MMM NLY JNJ VZ.

[NiR]

in wat the hell. Started on options about 2 years ago. Mainly boring strategies with boring stocks. Covered calls, naked puts, and vertical spreads usually about 3-6 months out with deltas bout .25 (.350 for the misc) or below. Mostly stable bluechips like WMT XOM MMM NLY JNJ VZ.

how have you done? any strategy that works for you? i am new to options so what is the strategy more option traders use? buy options on stocks that barely move? "boring".

[NiR]

you're trying to start an extremely complicated topic on a message board.

well there is a huge 140 page thread on investing so i figured we should have a buncha people here or from that thread who also trades options. options isnt that much more complicated then other forms of trading.

[vifferlv]

how have you done? any strategy that works for you? i am new to options so what is the strategy more option traders use? buy options on stocks that barely move? "boring".

not too bad. about 35% over the 2 years. I did say my style was boring. Things did get interesting however with my naked puts on BP during the spill, but made it out ok. I mostly sell, in fact I only buy for protection.

[NiR]

not too bad. about 35% over the 2 years. I did say my style was boring. Things did get interesting however with my naked puts on BP during the spill, but made it out ok. I mostly sell, in fact I only buy for protection.

i am very unfamiliar with all these terms. (i am really really new migrating from swing trading stocks).what do you exactly mean by "boring style", naked puts, and what you mean by buying only for protection. sorry if all this is newbie questions.

[vifferlv]

i am very unfamiliar with all these terms. (i am really really new migrating from swing trading stocks).what do you exactly mean by "boring style", naked puts, and what you mean by buying only for protection. sorry if all this is newbie questions.

Boring style (to me) is plays on non-volatile stocks. Yes you need to do some homework if you don't know those terms. Read a few books before getting started, this is a decent first one:
http://www.amazon.com/Understanding-...0911276&sr=8-1

[NiR]

Boring style (to me) is plays on non-volatile stocks. Yes you need to do some homework if you don't know those terms. Read a few books before getting started, this is a decent first one:
http://www.amazon.com/Understanding-...0911276&sr=8-1

any other books you recommend? or sites

[TBEagl]

thread title not flashy enough

[iBulk]

not too bad. about 35% over the 2 years. I did say my style was boring. Things did get interesting however with my naked puts on BP during the spill, but made it out ok. I mostly sell, in fact I only buy for protection.

why did you switch to options? do you find it more profitable than stocks? also is it more or less risky than stocks?

[theCT]

there is a investing thread already but thats basically of people trading stocks. i have been trading stocks for 1 year and i started option trading this year. So i figure i find more people who option trade so we can post good lines here. i normally option trade technology stocks like aapl/goog. my last 2 trades were horrible but i am still learning. so lets just talk about options trading on this thread. nothing else.

i short calls btw.

I wanted to do this a few days ago but I felt this thread couldn't handle the simple basics of this topic. Now that a thread like this has been created and has gained attention, I will add to this.

Thank you OP!

[BAMF_T]

I only use options to hedge my stock positions.

[theCT]

First and foremost OP, shorting options can get insanely risky, have you had any bad experiences doing this?


I have a program that I input the implied volatility, risk free rate (3mo LIBOR spot), the stock spot, the strike, and time to maturity. It spits out the option price (which I don't really care for) and The Greeks (which I care for). I haven't established a concrete strat yet, but I'm trying to screen a huge load of stocks from various sectors (prob the most volatile) and keep track of the ones that come back with high delta's and low gamma's. I think that's what I'm trying to do.



I should also add that I'm strictly taking a speculative position each time, don't care for anything else.

[vifferlv]

why did you switch to options? do you find it more profitable than stocks? also is it more or less risky than stocks?

Didn't switch, it's just part of my portfolio. To me, it's a good half-way point between buy&hold and active trader. It can be more profitable but also more risky.

First and foremost OP, shorting options can get insanely risky,

amen.

[Lt.Dangle]

Dear NiN,

BTN: $410.30
SB: $213.00
Hero (BB): $491.00
UTG: $459.20
CO: $408.00

Pre Flop: ($6.00) Hero is BB with A J
2 folds, BTN raises to $10, 1 fold, Hero calls $6

Flop: ($22.00) T A 3 (2 players)
Hero checks, BTN bets $16, Hero calls $16

Turn: ($54.00) A (2 players)
Hero bets $38, BTN calls $38

River: ($130.00) 7 (2 players)
Hero bets $90, BTN raises to $346.30 all in, Hero folds

but seriously, I have never traded options, just stocks. i've been meaning to get into options trading. how did you find the transition? were you profitable in stock trading?

[Calvin]

you're trying to start an extremely complicated topic on a message board.

options are pretty easy to learn, people just make it more complicated than necessary.

[NiR]

why did you switch to options? do you find it more profitable than stocks? also is it more or less risky than stocks?

i am a professional poker player. so this was a good transition. so far i like stocks more but from what i hear from other gamblers turned traders, options is the way to go. so i am trying to make the switch or atleast learn it for now. it is more risky from what i hear.

[NiR]

First and foremost OP, shorting options can get insanely risky, have you had any bad experiences doing this?


I have a program that I input the implied volatility, risk free rate (3mo LIBOR spot), the stock spot, the strike, and time to maturity. It spits out the option price (which I don't really care for) and The Greeks (which I care for). I haven't established a concrete strat yet, but I'm trying to screen a huge load of stocks from various sectors (prob the most volatile) and keep track of the ones that come back with high delta's and low gamma's. I think that's what I'm trying to do.



I should also add that I'm strictly taking a speculative position each time, don't care for anything else.

yup i have last couple weeks. i am just trying to learn more for now.

[AlmightyGaylord]

vifferlv how often are you naked?

[NiR]

Dear NiN,

BTN: $410.30
SB: $213.00
Hero (BB): $491.00
UTG: $459.20
CO: $408.00

Pre Flop: ($6.00) Hero is BB with A J
2 folds, BTN raises to $10, 1 fold, Hero calls $6

Flop: ($22.00) T A 3 (2 players)
Hero checks, BTN bets $16, Hero calls $16

Turn: ($54.00) A (2 players)
Hero bets $38, BTN calls $38

River: ($130.00) 7 (2 players)
Hero bets $90, BTN raises to $346.30 all in, Hero folds

but seriously, I have never traded options, just stocks. i've been meaning to get into options trading. how did you find the transition? were you profitable in stock trading?

well first year in stocks i did 24%. doesnt mean i am profitable but i did profit. options i am down so far. i am not sure why people say you can make more from options. so far it seems like i can make mroe from stocks.

[theCT]

yup i have last couple weeks. i am just trying to learn more for now.

If you are just starting out in the options game, the last thing I would do is short anything. Just long calls/puts until you can develop your own strategy and profit from it.

Shorting options are for those who have the capital and risk-appetite to back up any position that goes south, technically, potentially, infinitely south.

[ragingcrayon]

oex options near expiration if the market feels overbought or oversold.

big returns.

good luck.

[NiR]

If you are just starting out in the options game, the last thing I would do is short anything. Just long calls/puts until you can develop your own strategy and profit from it.

Shorting options are for those who have the capital and risk-appetite to back up any position that goes south, technically, potentially, infinitely south.

shorting puts(or was it calls? something about naked) is the only thing my friend taught me. can you explain the others ?

[ragingcrayon]

If you are just starting out in the options game, the last thing I would do is short anything. Just long calls/puts until you can develop your own strategy and profit from it.

Shorting options are for those who have the capital and risk-appetite to back up any position that goes south, technically, potentially, infinitely south.

dont give bad info.

there's a max loss on sold puts.

naked calls on the other hand.... infinite risk.

come at me bro

[theCT]

dont give bad info.

there's a max loss on sold puts.

naked calls on the other hand.... infinite risk.

come at me bro

Shorting = writing.

When you short an option you are selling (writing) an option that you think will go down in price. You do not have to own the stock itself to short an option on it.

http://www.investopedia.com/terms/s/shortselling.asp


Learn yourself some finance before you post about it.