Trading Stock Options

[finances5]

Do any of the investors actually make money investing in stock options or there's some truth to the saying "you're going to lose your shirt" investing in them?

Thanks!

 

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[jon.a]

There are a few detailed options threads here. Put a little effort into finding them.

 

[Eric Ferner]

I think you are asking the wrong question.
Will it help you, if some people say " Yes, I make a lot of money with options" whereas others might answer "I gave it a try, but lost like 2k so I quit"?
Not being into options myself (but in equities) I am quite sure it´s similar to all other kinds of speculations out there when it comes to this point: stocks, bonds, forex, commodities... direct investment or with the use of derivatives like options, cfds, futures and so on - you gotta do your homework if you want it to work.

Trading the markets ain´t a get rich quick theme - that´s a BIG misconception which many new traders have.
You gotta put a lot of work in there, be willing to pay tuition to the markets in form of losses. You have to work on your analytic abilities as well as on your own mind. The correct mindset is absolutely crucial for a trader.
Reminds me of a cite from Peter Brandt I read lately:

"If you want to know yourself - the good, the bad and the really ugly - just become a trader.
Traders get in touch with themselves like few other professions"

So yes - there will be people making money with options.. as well as there are people making money with other instruments.. but that won´t help you.
What WILL help you (in case you are really serious about making money in the markets) is to learn by reading books, trade a demo account for a short period of time (in case you haven´t traded before) and then trade live with a small amount you can afford to lose.
Play small - this is not about making money at the beginning - it´s about learning the ropes.

 

[MidwestLandlord]

There are quite a few options traders on this forum that make money on it, myself included. Lots of threads about it on here.

Outside of this forum the best place to start learning is tastytrade in my opinion. Go through their beginners videos, then the Mike's whiteboard videos. That will give you a good start.

TDameritrade has a paper trading account to practice with. That's where I started.

Ideally you'd have $100k to start with when you actually start trading live.

 

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[Akshay Kumar]

There are quite a few options traders on this forum that make money on it, myself included. Lots of threads about it on here.

Outside of this forum the best place to start learning is tastytrade in my opinion. Go through their beginners videos, then the Mike's whiteboard videos. That will give you a good start.

TDameritrade has a paper trading account to practice with. That's where I started.

Ideally you'd have $100k to start with when you actually start trading live.

Would those strategies work in Indian Markets if I can't access tastytrade here and am forced to use an Indian broker?

 

[Raja]

Would those strategies work in Indian Markets if I can't access tastytrade here and am forced to use an Indian broker?

MJs strategy was selling options not trading them

 

[Raja]

Would those strategies work in Indian Markets if I can't access tastytrade here and am forced to use an Indian broker?

I would highly recommend you to learn such things before even considering as you might get burn.

Do you know you can lose ₹100,000 from investing ₹1000 in options. This is a strong example just to get the point across because earlier you were interested in real estate investing.

 

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[NCNY]

Rich people can make lots of money *selling* options, because it's pretty capital intensive.

Let's say you sell to open Jul'30 Apple 125 PUT, meaning you are betting that apple won't reach 125 or under at Jul'30, and the price of that option is 1.58 right now, means you get paid $158 for the risk of the price apple can go in that date (100 apple shares = 13,249), and the chance for winning is about 80%.

It really scales when you have money... If you have 150k to do it you will pocket almost 2,000 dollars in a month (It's far more complicated but it's the basics...)

If you really want to dive in, the book "Options as a Strategic Investment" Is a good one.

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