Starting to learn options (where to start)

[Windlesham1]

Do people buy options way out of the money then use those options to purchase the underlying stock for far less than it's current market price, then sell said stock for current market price for a profit of the difference minus cost of option?

Most people outside the US do not trade stocks with options. they are different animals and a stock can move >10% in a day -you really don't want to be on the wrong side. Index options are the way to go.

 

[sideways-sid]

Do people buy options way out of the money then use those options to purchase the underlying stock for far less than it's current market price, then sell said stock for current market price for a profit of the difference minus cost of option?

That doesn't make much sense - can you provide an example?

 

[Windlesham1]

All this is secondary.Firstly you have the biggest asset your mind first start investing in your mind and after that mind will show you ways to produce money.

I think that it's easy to find all the stuff that will cost you money- the proliferation of spread bets is the shining example. they all offer bells and whistles but few traders make anything. It took me years to get profitable with options because I'm an idiot. Took me 7 years to find out about options from my initial interest in the markets

 

[aztrix]

So much information out there, in one way it's great, but in another way it can be very overwhelming. Not to mention all the get rich quick schemes as well.

So I guess I am being a bit lazy here and just want to cut out all the BS and find out where the best place to start learning how options work. The different variation, how to trade them etc etc.

Books/websites/coaches etc

I have started with the below book....

Trading Options For Dummies, 3rd Edition (For Dummies (Business & Personal Finance)): Amazon.co.uk: Duarte: 9781119363705: Books

Buy Trading Options For Dummies, 3rd Edition (For Dummies (Business & Personal Finance)) 3 by Duarte (ISBN: 9781119363705) from Amazon's Book Store. Everyday low prices and free delivery on eligible orders.

www.amazon.co.uk

and hope to move onto this one next ....

Options as a Strategic Investment: Fifth Edition: Amazon.co.uk: Mcmillan, Lawrence G: 0884389531726: Books

Buy Options as a Strategic Investment: Fifth Edition 5th ed. by Mcmillan, Lawrence G (ISBN: 0884389531726) from Amazon's Book Store. Everyday low prices and free delivery on eligible orders.

www.amazon.co.uk

There are a lot of BS artists and scammers out there so do NOT pay anyone for training, strategies, magic pills, etc., they don't exist.

I'll re-iterate @drcruz's post, TastyTrade has copious info regarding options trading and are geared specifically for options traders. They are also anti-establishment as far as the financial industry is concerned and let's face it, the majority of players in the financial industry lose money and charge you exorbitant fees while they're doing it so that is a definite plus for TastyTrade as far as I'm concerned.

IMHO The best thing about TastyTrade is their mechanical options trading methodology based on probability and statistical research i.e. facts, not hearsay, they do a lot of backtesting on their theories and practices and also debunk many of the myths purveyed by the vested interested of many in the financial industry.

Nor do they purport to have an edge, quite the opposite i.e. as far as they're concerned it's a 50:50 coin toss where the market goes on any given day so their method is based on strategy, staying mechanical, trading small, being agile, etc.

Good luck with your options trading journey and good trading …

[link removed]

 

[Calinor]

There are a lot of BS artists and scammers out there so do NOT pay anyone for training, strategies, magic pills, etc., they don't exist.

I'll re-iterate @drcruz's post, TastyTrade has copious info regarding options trading and are geared specifically for options traders. They are also anti-establishment as far as the financial industry is concerned and let's face it, the majority of players in the financial industry lose money and charge you exorbitant fees while they're doing it so that is a definite plus for TastyTrade as far as I'm concerned.

IMHO The best thing about TastyTrade is their mechanical options trading methodology based on probability and statistical research i.e. facts, not hearsay, they do a lot of backtesting on their theories and practices and also debunk many of the myths purveyed by the vested interested of many in the financial industry.

Nor do they purport to have an edge, quite the opposite i.e. as far as they're concerned it's a 50:50 coin toss where the market goes on any given day so their method is based on strategy, staying mechanical, trading small, being agile, etc.

Good luck with your options trading journey and good trading …

[link removed]

Depends what you mean by financial industry. Most of the banks I worked for, their desks make money most days.

Can you explain some of the myths?

 

[aztrix]

The majority of the clowns that were responsible for the GFC 2007-2008 got off scot free, I think Iceland was one, if not the only one to jail bankers for corrupt practices

Of course the banks make money, they use your free (or near as) money to charge out at inflated rates to your friends and family! Blind Freddy can do that! However 90% of them don't match or outperform the major indexes yet are happy to charge fees like a wounded bull for the pleasure

There are a lot of myths regarding trading, options, strategies, etc., that are unsubstantiated hogwash that are designed to keep customers on the hook for fees, with scant regard for their financial welfare

Trading options is risky, no it's not! Options originated for bankers to hedge (insure) their portfolios so calling it risky is analagous to saying having house insurance is risky … really?

Time in the market not timing the market, this is propagated by said advisors who couldn't care less if your portfolio loses 20%, 30%, 40%, whatever during a black swan event! When in reality their portfolio should be hedged

The trend is your friend … only in a bull market but even so, just sitting on it is rarely the most profitable outcome but as long as financial managers are charging you fees, the only thing they care about is keeping you on the hook

As for the financial wizards on CNBC, Bloomberg, etc. they don't know anymore than the average punter on the street and like most in the industry are just pedalling tripe because they couldn't tell you from one day to the next where the market is going with any certainty