Bearkiller
I have been studying option trading and also actually trading for 2 years. I have taken one formal course that covered everything for a beginner. I can say that I have been more unsuccessful than successful at options trading.
I am finding that this unhappy circumstance is common amongst newbies. I'm not discouraged. I am just hungrier.
One problem has been an overall lack of volatility due to what I believe is the practice of the FED lending money at very low, almost zero rates, to banks who then put it into the stock market. I guess the FED is also buying stocks to make everyone feel good? Take it from me, slow moving underlying stock prices are not the friend of an option trader.
Currently, I am experimenting with a new strategy for me. I am scanning for stock options with unusual activity. Those companies are easy to find. I then scan the news at the various financial news outlets on line for the companies involved in the unusual options activity. I look for pre-announcements or stock splits, whatever.
Then I get into the interactive charts at Yahoo finance or a free android app that shows the 20 or 50 day s.m.a.slicing up through the 100 or 200 day simple moving average. I then use a free android app that gives me Hurst cycles or trend changes. If the current price of a stock is slicing up through the 50 day s.m.a. so much the better.Volume of stock trading needs to be at least average.
There needs to be high "open interest" for the option strike price. I will buy the put or call or strategy at the strike price that has a "big hitter" at least read as 1.0 K on the option "board". I tend to buy a little deep in the money even if the "big hitter" is at the money or out of the money.The higher Deltas seem like a better deal to me.
I am paper trading the above until I know what I'm doing. My main objective is holding onto cash so I can short the market during it's next crash and buy when the market bottoms out.
I will be posting my paper trading option trades, the good, the bad, the ugly. Criticism by you all is considered an act of kindness.