Options Trading

[szyzygy]

So I just opened an online options trading account.

The goal is to make enough money so I never have to work again. So I'm thinking about 6 million after taxes in the next couple of years. But I'd settle for more!

I look for easy arbitrage opportunities and I do a little technical analysis and look for easy stuff to avoid (earnings reports, dividends,etc...)
I like to trade stuff on big companies I used to work for. At least I have the illusion of superior knowledge. Just sold some out of the money put options that expire on 5/12. Crazy how much you need to keep in the margin account for naked selling. Apparently different strategies (like spreads) require lower margins.

If I make it, I'll keep you posted.

[masraum]

Good luck, you're going to need it.

[szyzygy]

I am aware of the risks. This is gambling, not investing. I'm well trained and have several years experience and credentials.

[gduke2010]

Originally Posted by szyzygy

So I just opened an online options trading account.

The goal is to make enough money so I never have to work again. So I'm thinking about 6 million after taxes in the next couple of years. But I'd settle for more!

I look for easy arbitrage opportunities and I do a little technical analysis and look for easy stuff to avoid (earnings reports, dividends,etc...)
I like to trade stuff on big companies I used to work for. At least I have the illusion of superior knowledge. Just sold some out of the money put options that expire on 5/12. Crazy how much you need to keep in the margin account for naked selling. Apparently different strategies (like spreads) require lower margins.

If I make it, I'll keep you posted.

Ouch! It's not a good idea to sell puts w/o owning the stock. It might be best to start out small, earn some cash and play with your earnings. Option trade success is a lot like a baseball batting average. You don't need to make money on every trade to be successful. But, you might want to get a few base hits before going for the home run. Some of the greatest traders died broke.

Be careful.

Gary

[szyzygy]

Originally Posted by gduke2010

Ouch! It's not a good idea to sell puts w/o owning the stock. It might be best to start out small, earn some cash and play with your earnings. Option trade success is a lot like a baseball batting average. You don't need to make money on every trade to be successful. But, you might want to get a few base hits before going for the home run. Some of the greatest traders died broke.

Be careful.

Gary

It is within my risk appetite. I know what I'm doing. Thanks for your advice and well wishing.

[911_Dude]

Better to write options. Then the house is in your favor. Best of luck, but flat out option buying is a young mans sport.

[legion]

Originally Posted by szyzygy

I am aware of the risks. This is gambling, not investing. I'm well trained and have several years experience and credentials.

At least you understand that.

Never bet more than you can afford to loose.

This brings back fond memories of the Black-Scholes model. Unfortunately with options, you can lose more than you invest. IIRC with a short call, the potential losses are unlimited.

I became a finance major in college because I wanted to learn how to get rich quick. Instead I learned that almost everyone underperforms the market over the long term, and the exceptions are people who manipulate the market and/or engage in insider trading. In other words, you can get lucky once or twice, but anymore than that, and you have to be in Congress to avoid going to jail.

Because the market tends to out perform all trading other strategies, particularly when trading fees are considered, I decided my best option is to invest in index funds with the lowest fees and costs. And since I started investing in 2000, I can confidently say that that strategy has sucked, but in theory it has sucked less than anything else.

Like gambling the only way to win after you actually do hit it big is to walk away from the table...

[szyzygy]

Originally Posted by 911_Dude

Better to write options. Then the house is in your favor. Best of luck, but flat out option buying is a young mans sport.

um, I did write an option...

[Rich76_911s]

Originally Posted by gduke2010

Ouch! It's not a good idea to sell puts w/o owning the stock. It might be best to start out small, earn some cash and play with your earnings. Option trade success is a lot like a baseball batting average. You don't need to make money on every trade to be successful. But, you might want to get a few base hits before going for the home run. Some of the greatest traders died broke.

Be careful.

Gary

Actually selling a put and owning stock is riskier than selling a put naked.

[szyzygy]

Originally Posted by legion

At least you understand that.

Never bet more than you can afford to loose.

This brings back fond memories of the Black-Scholes model. Unfortunately with options, you can lose more than you invest. IIRC with a short call, the potential losses are unlimited.

I became a finance major in college because I wanted to learn how to get rich quick. Instead I learned that almost everyone underperforms the market over the long term, and the exceptions are people who manipulate the market and/or engage in insider trading. In other words, you can get lucky once or twice, but anymore than that, and you have to be in Congress to avoid going to jail.

Because the market tends to out perform all trading other strategies, particularly when trading fees are considered, I decided my best option is to invest in index funds with the lowest fees and costs. And since I started investing in 2000, I can confidently say that that strategy has sucked, but in theory it has sucked less than anything else.

Like gambling the only way to win after you actually do hit it big is to walk away from the table...

that's what they want you to think. nothing to see here folks, trust me, you're not smart enough...don't even try....

[szyzygy]

Originally Posted by Rich76_911s

Actually selling a put and owning stock is riskier than selling a put naked.

if the stock goes down, you lose the value of the stock and you have to pay K-S.

In my position I only have to pay K-S, which is 2 standard deviations away from any recent historical price. I'm comfortable with that.

[RWebb]

Originally Posted by szyzygy

I am aware of the risks. This is gambling, not investing. I'm well trained and have several years experience and credentials.

Then you realize that the real way to make money with options is to set up as a broker or adviser and use others people's money while coking away comm'ns and advisory fees...

[Hugh R]

Get back to us in six months and tell us how you did.

[szyzygy]

Originally Posted by RWebb

Then you realize that the real way to make money with options is to set up as a broker or adviser and use others people's money while coking away comm'ns and advisory fees...

yeah, it's always better to be neutral and just collect fees...I'm several billion away from ever making that happen

Like I said, I have many years experience...selling and buying options is very, very familiar to me, I'm talking billions of dollars a year here. It's what I do. But it's always someone else's money and risk tolerance.

If I could be a bookie, I'd do that instead.

[szyzygy]

Originally Posted by Hugh R

Get back to us in six months and tell us how you did.

will do.

[Nate2046]

Originally Posted by szyzygy

that's what they want you to think. nothing to see here folks, trust me, you're not smart enough...don't even try....

This is all so humbling. Please do share the results. I can't wait to see the pic of your mountain of cash!

[Jrboulder]

Originally Posted by szyzygy

So I just opened an online options trading account.

The goal is to make enough money so I never have to work again. So I'm thinking about 6 million after taxes in the next couple of years. But I'd settle for more!


If I make it, I'll keep you posted.

Good luck!

[TheMentat]

Quote de Hugh R

Get back to us in six months and tell us how you did.

will do.

So? How did it go?

[sammyg2]

Q) how do you make a small fortune in the options market?
A) start with a large fortune.

I made quite a bit trading oil options in 07and 08 but it all seemed so sleazy I stopped.
IMO unless there is a market or subject that you are intimately familiar with, one that you are considered an expert in, one where you can accurately predict what the big boys are going to so and when, then its just gambling.
Go to vegas, the odds are better.

[dienstuhr]

Originally Posted by TheMentat

So? How did it go?

Yeah! We're on tenterhooks here!