keen to learn about options

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locgek

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Hi,

Would like to learn about options from a relatively basic base,

Are there any particular websites or online courses that any one can recommend.

Thanks in advance
 
Charles Cottle's book is great. OptionParty is right. Paper trade first. When you do start trading live, trade very small until you are profitable. As Dan Sheridan used to say, if you can't trade a $5,000 account, what makes you think you can trade a $50,000 account?
 
lloydbee said:
Let me/us know what youre learning or wanting too and how things are going.
Options are fantastic. Good luck with your learning.
Click to expand...

Thanks , have completed the beginner modules online with the CBOE- really good I thought, and just really supplemented it with explanations and examples online

Placed a few initial OTM call trades with 30/60 days till expiry, so far all US equities.
1/2 have turned out positive - and I cashed out - with a decent profit , 1/2 are currently massively OTM but the positions are still running.
I have been using Google finance option chain and online option calculator to help guide my choice of strike / expiry.

I want to learn more about these wonderfully named strategies that I keep hearing mentioned - especially the strangle
 
Sounds good, who's your broker?
When buying singles you're best to buy 1 or 2 strikes ITM, typically these would have a Delta of 60 or so and will increase in value a lot faster than your OTM options. Advice to buy OTM Singles usually comes from people not knowing how to truelly trade.
 
lloydbee said:
Sounds good, who's your broker?
When buying singles you're best to buy 1 or 2 strikes ITM, typically these would have a Delta of 60 or so and will increase in value a lot faster than your OTM options. Advice to buy OTM Singles usually comes from people not knowing how to truelly trade.
Click to expand...



Hi I am using TD, reason I have been using OTM, was the cheaper entry price, and but I understand your delta point. So far I have only been purchasing at the nearest strike above current stock price. For most of the trades I placed most went ITM within a few days. though some slipped out at the moment.

Hopefully in the coming weeks I will utalising, more of what I am learning. Im still only on a basic level I think
 
be careful with OTM long options as you're fighting time decay. A good rule of thumb is the delta is approximately the probability the option will expire in the money. You can subtract that percentage from 100% to get the probability it will expire worthless.

I had a friend who thought Google was going down once. He bought massively OTM puts. Google did go down but not enough and he lost 100% of his trade.

You might try near the money options and even do some vertical spreads. (XYZ at 100, buy the 105 calls and sell the 100 calls for a bullish position).
 
Last edited:
As Tom would say, read "Michael Catolico" PDF on Option Adjustments.
As I would say "Paper Trade".

Carl
 
locgek said:
Hi I am using TD, reason I have been using OTM, was the cheaper entry price
Click to expand...

Buying because they are cheap I can understand, I am sure we all did that at some stage in our trading journey but in reality you are better paying more for the option and definitely ITM, as long as it stays ITM you are guaranteed it having some worth at expiration not that you want to be holding it into that.

Trading in Singles is a dance between the trade going and staying ITM, Time and Price movement. But like you said how you were scalping or closing quickly for profit you will benefit greatly from trading ITM and the same way. (y)

TD/TOS = great choice of broker, I do not think you can get better they are the market leader as far as I am concerned for trading Options.

Once you have a good idea of trading singles and the 4 main Greeks spend some time looking into Verticals... they are a good foundation for trading AND other types of trades.
 
lloydbee said:
Buying because they are cheap I can understand, I am sure we all did that at some stage in our trading journey but in reality you are better paying more for the option and definitely ITM, as long as it stays ITM you are guaranteed it having some worth at expiration not that you want to be holding it into that.

Trading in Singles is a dance between the trade going and staying ITM, Time and Price movement. But like you said how you were scalping or closing quickly for profit you will benefit greatly from trading ITM and the same way. (y)

TD/TOS = great choice of broker, I do not think you can get better they are the market leader as far as I am concerned for trading Options.

Once you have a good idea of trading singles and the 4 main Greeks spend some time looking into Verticals... they are a good foundation for trading AND other types of trades.
Click to expand...


Thanks for the suggestions, I have taken onboard the suggestions.
I have had placed a combination of single calls and puts some in the ITM, some NTM and pretty much scalping away within the first 30 mins opening bell. Got a number of small positions still open, but hoping in cumulation I should have a good week.

Just finished the basic verticals section on the CBOE course as well!!
 
lloydbee said:
How did your week turn out?
Click to expand...

Not a bad week in as a whole - cashed in on a couple of options that moved ITM , and were deep ITM, cut some positions that where getting close to ATM , but were expiring on the 19th, but in total was a very positive week.

Have a couple of potions deep OTM, so may lose on them in the coming weeks.

Have really embraced the concept of decay into my decision making on what option to choose after being pointed in that direction!!! thanks
 
locgek said:
Not a bad week in as a whole

Have a couple of potions deep OTM, so may lose on them in the coming weeks.

Have really embraced the concept of decay into my decision making on what option to choose after being pointed in that direction!!! thanks
Click to expand...

That's good to hear, what are the tickers and strikes of the OTM options that you still have? I'm thinking you could find some Options to sell against them, turning them into Vertical Credit Spreads for the remainder of their life.
 
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