Does anyone here trade options?

Go down

Does anyone here trade options?

Post  jon on Fri Dec 17, 2010 1:24 pm

Does anyone here trade options?

I'm trying to figure them out.
avatar
jon

Posts : 27
Reputation : 0
Join date : 2010-11-26

View user profile

Back to top Go down

Re: Does anyone here trade options?

Post  Max on Tue Dec 21, 2010 2:09 am

I am trying to learn. Look into http://www.optionseducation.org/, which seems to be a good starting point.

My biggest concern is that time becomes a much more important factor in options. You need to call the direction of movement (put or call), need to call how much it is going to rise (in order to beat the premium), and need to call when it is going to rise (in order to profit before expiration date).

With stock, all you have to call right is the direction of movement. To me, the excess risk of having a forced time based erosion of value (all other things equal, call option price will decline as it gets closer to the exercise date), along with a premium, higher commissions, high probability of 100% loss (generally not possible in most stocks, low probability of loss greater than 50%), generally adds up to a bad deal. It would take a good strategy or a lucky long shot to make it work.

Max
SDDL Insider
SDDL Insider

Posts : 297
Reputation : 7
Join date : 2010-07-01

View user profile

Back to top Go down

Back to top

- Similar topics

 
Permissions in this forum:
You cannot reply to topics in this forum