Why do people trade in options and lose money ?

This is a discussion on Why do people trade in options and lose money ? within the Futures & Options forums, part of the Markets category; What a lot of useless posts in this thread, it doesn't look like I missed much at all and definitely ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Oct 27, 2012, 6:10am   #61
 
lloydbee's Avatar
Joined Jun 2009
Re: Why do people trade in options and lose money ?

What a lot of useless posts in this thread, it doesn't look like I missed much at all and definitely nothing of value.

I don't think the argument of Options trading being a gamblers game will ever stop, it just comes back to the belief or mentality of the individual and is probably more a play on words than anything.

As a full time options trader I know you can make money 'trading' options and for me it is a business and one I take very seriously. There is no gamblers mentality to my trades, just calculated and knowledgeable business decisions as a 'trader' to make as many consistent wins as I can.

I love trading as a business and could not see myself doing anything else, there is just too many positives that far outweigh the negatives.

Happy days.
__________________
It's A Risky Business
lloydbee is offline   Reply With Quote
Thanks! The following members like this post: rsh01
Old Nov 1, 2012, 9:32pm   #62
Joined Nov 2012
Re: Why do people trade in options and lose money ?

I think most people lose with options because they are bad directional traders and most rookies think the only way to make money is to buy options. If you are long an option you need extensive and quick move of the underlying. Be honest most people have no clue what the market does nontheless guessing the direction and timing.

I am honest with myself, I am a very bad directional trader that is why I only trade nondirectional options strategies.

But to master trading with options takes years and most wannabe traders want to make it quick and dirty and finally it becomes very dirty
optionsrules is offline   Reply With Quote
Old Nov 2, 2012, 1:58am   #63
 
rsh01's Avatar
Joined Nov 2010
Re: Why do people trade in options and lose money ?

Quote:
Originally Posted by Splitlink View Post
Well, it is. Because if you buy a call option when the price is going up the time value on that option will go up disproportionately with reference to the true value. Therefore, even if the price does not reverse, the time value will.
as a more general answer to the question, the perceived greater risk is cos theres a massive amount of leverage in options (& other derivs), so buying deep otm call/put cld bring returns on your investment of hundreds of %, and equally large losses if writing. you get exposure to the underlying with a lot less outlay (premium/margin) than if you just bought the underlying.

btw loads of option traders scalp, dont hold to expiry etc, like any other product, so their exposure to these risks are managed. monthly income generating trades eg buying iron flys with expiry 30-50 days are often closed out in 2-3 weeks.

what i like about them is the plethora of strategies, combos etc one can use suiting all different types of traders - directional/non directional, scalpers, risk averse, income generating, punters etc etc.
rsh01 is offline   Reply With Quote
Old Nov 8, 2012, 3:57am   #64
 
lloydbee's Avatar
Joined Jun 2009
Re: Why do people trade in options and lose money ?

Quote:
Originally Posted by rsh01 View Post
what i like about them is the plethora of strategies, combos etc one can use suiting all different types of traders - directional/non directional, scalpers, risk averse, income generating, punters etc etc.
here here!
__________________
It's A Risky Business
lloydbee is offline   Reply With Quote
Old Nov 9, 2012, 12:31am   #65
 
lloydbee's Avatar
Joined Jun 2009
Re: Why do people trade in options and lose money ?

Mr.Charts " I see the figure in the avatar is weeing on optionetics..... diss on the opposition, huh? lol"


Not because they are opposition, because they fail as mentors and are nothing but a sales company in mentors clothing. Even to the point of them being scared enough of my business that the GM gave me a threatening personal phone call as well as emails.

To them I say...
"There is less to fear from outside competition, than from inside inefficiencies. "
lloydbee is offline   Reply With Quote
Old Nov 9, 2012, 2:32pm   #66
Joined Nov 2008
Re: Why do people trade in options and lose money ?

people loose because they loose because they loose))
sambazone is offline   Reply With Quote
Old Nov 9, 2012, 3:37pm   #67
 
Hoggums's Avatar
Joined Jan 2006
Re: Why do people trade in options and lose money ?

lose ffs!
__________________
Hoggums

-----------------------------------------------------------------------------
Outside of a dog, a book is a man's best friend,
inside of a dog, it's too dark to read. -- G Marx.
Hoggums is offline   Reply With Quote
Old Nov 15, 2012, 4:51pm   #68
Joined Oct 2012
Re: Why do people trade in options and lose money ?

Quote:
Originally Posted by Splitlink View Post
Well, it is. Because if you buy a call option when the price is going up the time value on that option will go up disproportionately with reference to the true value. Therefore, even if the price does not reverse, the time value will.
Quote:
Originally Posted by optionsrules View Post
I think most people lose with options because they are bad directional traders and most rookies think the only way to make money is to buy options.
Its a combination of the 2 . If you are wrong on the direction you would lose if you buy/sell the underlying , unfortunately if you are correct you might still lose as time value becomes smaller .

Us rookies should stick to BUYING options , selling is risky unless its part of a hedged strategy .

At least with options you know your stakes and you can try an exotic stategy for he fun of it .

PS People trade options because you can apply theory to a practical test and because potential losses are known beforehand (if are buying).
thunderstruck is offline   Reply With Quote
Old Nov 16, 2012, 12:17am   #69
 
lloydbee's Avatar
Joined Jun 2009
Re: Why do people trade in options and lose money ?

Those of you that Option trade whether it be Live or Virtual, what is your EOY (end of year) account goal for Profit or Loss?

Mine is +60% conservative target, +80% aggressive target and 100%+ aggressive with the markets behaving and yes account gain.
__________________
It's A Risky Business
lloydbee is offline   Reply With Quote
Old Nov 16, 2012, 9:17am   #70
Joined Nov 2012
Re: Why do people trade in options and lose money ?

Mine is 80% target and I am at 74 right now so I will pretty sure reach it. And this is *only* nondirectional trading!
optionsrules is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
Why do people lose money on the market? in2uxs The Foyer 283 Mar 25, 2014 9:07pm
Motley Fool - Why People lose Money in the Stock Market sukhibraich Educational Resources 1 Apr 17, 2012 9:08pm
What percentage of people lose money in the stock market? hanhao Psychology, Risk & Money Management 39 Nov 20, 2011 6:48pm
"Trade with money you can afford to lose" How ? ivorm Home Trader 18 Feb 23, 2004 8:21am

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)