I don't have any experience with options. I was thinking of something like buying £10000 of options a year (puts on FTSE 100 i think) that have an expiration date of 1 year (if possible). If the stock market collapses to around half its value (3000) then how much money do I stand to make?
Hoggums
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Depends on what option strikes you buy. If you bought puts at 6000 you could stand to make a lot of money - however they would be expensive and if the market didn't collapse you could easily lose the lot.
i think you need to abandon this idea until you full understand options and how they behave. To be honest your strategy sounds like suicide.
i think you need to abandon this idea until you full understand options and how they behave. To be honest your strategy sounds like suicide.
I don't know much, but one thing I do know is that making a straight directional bet on the markets like what you are wanting to do, is incredibly risky.
An options play that is 100% directional like that is about as bold as it gets. Theta is your enemy, when you're buying options.
On the plus side, volatility is low, so buying some LEAPS to protect your portfolio from downside risk might be a nice play if things heat up later in the year, but making a straight bet like that is asking to kiss your money goodbye.
An options play that is 100% directional like that is about as bold as it gets. Theta is your enemy, when you're buying options.
On the plus side, volatility is low, so buying some LEAPS to protect your portfolio from downside risk might be a nice play if things heat up later in the year, but making a straight bet like that is asking to kiss your money goodbye.
I know I can stand to lose all my money. I'm just wondering say I do this for 7 years and each year I lose £10000 and on the 8th year the market collapses to 3000, how much money would this bet make?
Kinda like buying £10000 of lottery tickets a year and waiting to hit the jackpot.
Kinda like buying £10000 of lottery tickets a year and waiting to hit the jackpot.
Michaelball
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do it!! but wait till the ftse hits MAJOR resistance, and keep an eye on the Support levels on Daily charts
Well that would be 6750
Michaelball
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its 6,200 about now, if your serious about 'Put' options id wait till all this serious economic news in the US is over with, no need to rush into such a big trade like that with just hope. hedge it 25% with a 'call' on a stock like Samsung or Google, although Google is rather heavily traded so is quite volatile in price. Samsung in the long run seems more calm
BeginnerJoe
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I have a better plan. Forex regularly (many times a year) makes 1000 pip moves. If you bet £10k correctly, that will give you £10 million.
You mean bet £10000 on a single Eur/usd trade with a close stop loss that could be wiped out in hours?
BeginnerJoe
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I said no such thing. I was pointing out where large moves could be had regularly. As for the technicalities of how to do it, I have some ideas. But I am not giving them away without some kind of a iron clad profit sharing deal.
I'll give you 1% of the profits. Witnesses on trade2win will testify against me.
BeginnerJoe
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I don't work cheap. 20% would be more acceptable.
Come on guys! All I'm asking is for someone with a Interactive Brokers account to check how many puts you can buy on the ftse 100 with £10000 (the cheaper the better) and if then the potential profit if it falls to 3000 on a freak market crash.
Otherwise can you link me to an options broker?
Otherwise can you link me to an options broker?
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