What do you think about option trading?

Question

Been doing some stock and ETF trading for a while. Thinking about looking into options.

Any word or advice?

Or should I just stick to stocks?

Answer 1

Options add another layer of complexity to the trading process, and you need to understand that complexity to stand a chance of surviving as an options trader. If you're the kind of guy that likes math puzzles and complexity for the sake of it, you'll love options. Otherwise, I'd steer clear of them.



A couple of books you should read before even thinking of entering a trade:



"Option Volatility and Pricing" (Natenberg)



"Options as a Strategic Investment" (McMillan)



Be advised that options contracts are much less liquid than stocks, so slippage can be an issue. Commissions are higher as well.



Options can be very seductive for the uninitiated because of the leverage they offer with limited downside. But its largely an illusion; There's no free lunch and the guy on the other side of your trade expects to make a profit too. Only one of you is going to be right and the winner will generally be the guy who's more informed.



Good Luck!

Answer 2

1

Answer 3

Trading Options is very difficult. If you're very good at stocks you may want to learn about Options. Read some good books. Make sure you understand "the Greeks". Try to use a broker that has many tools in Options like;

ThinkOrSwim

TradeStation

Option Express

etc.....

Answer 4

I am also interested in getting into Option trading. I would like to try only National Stock Exchange - NSE index options (NIFTY options) as I believe that liquidity is high, and it is actively traded. But, I would like to learn more about the Option trading strategies. People tell me that there are hundreds of option trading strategies among which some of the strategies like Bull Call Spread are quite popular. Since, with some strategies we can make money we can make money in both the bullish and bearish market conditions, I suggest you can also to make yourself familiar with the options strategies and feel comfortable before stepping into an Option trading.

Answer 5

In binary options you will have the possibility to predict the movement of various assets such as stocks, currency pairs, commodities and indices. Learn how you can make money trading binary options https://tr.im/BinaryOptionsTrading

An option has only two outcomes (hence the name “binary” options). This is because the value of an asset can only go up or down during a given time frame. Your task will be to predict if the value of an asset with either go up or down during a certain amount of time.

Answer 6

A lot depends upon your goals and your trading plan. However, selling options against ETF's or stock you already own can make very good sense. It brings in immediate income and offers you a degree of downside protection should the shares drop in price.

Answer 7

It really depends on what YOU think about options trading and in order to have an idea about whether options works for you or not, you need to first understand the pros and cons and how it works. Some places where you can start to have such an understanding are:



http://www.optiontradingpedia.com



http://www.investopedia.com/university/options/



http://en.wikipedia.org/wiki/Option_(finance)

Answer 8

Option trading isn't just about buying and selling, it's about their non-linear relationship to the underlying stock prices and the options are rarely purchased alone. Just be prepared to exercise if you have to.

Answer 9

Penny stocks are loosely categorized companies with share prices of below $5 and with market caps of under $200 million. They are sometimes referred to as "the slot machines of the equity market" because of the money involved. There may be a good place for penny stocks in the portfolio of an experienced, advanced investor, however, if you follow this guide you will learn the most efficient strategies https://tr.im/e3f14

Answer 10

2