Options when you are buying otm is like betting on a horse at 20/1 and even when it wins it's real price should have been 50/1.
If you are trading them as well with a s/b site then you are getting 12/1 on your 50/1 horse.
They look exciting but the costs are a huge factor
If you are trading them as well with a s/b site then you are getting 12/1 on your 50/1 horse.
They look exciting but the costs are a huge factor
f2calv
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I appreciate the warning about OTM options, and if I were purchasing options at outlandishly crazy strike prices I would agree.
However given the recent sell-offs, and also living in the [vain] hope of a "santa rally", I don't think mid-6000's is too unreasonable for the ftse by Dec 20th barring any upsetting news from China in the meantime.
I am constantly getting told that trading at too high a value per point is unwise/unhealthy - and yes it does stress me out sometimes - but buying for an option with a fixed risk means I can effectively write off that premium in my head and let the dice fall where they may.
And yes buying at a s/b provider you are paying more to open the option, however the bonuses are that their platforms run 24-hours and of course the tax-free nature.
Currently the 6600 option I'm sitting on is at 105% profit which doesn't sound too crazy to me, I only hope we get above 6600 and it'll be running @ £50/point.
Buying calls/puts that are on the tail-end of OTM is a cheap and stress-free way to play longer running trends IMO - but as with any trade you need to choose the strike and position size accordingly.
Horses for courses.
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postman
f2calv
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Just hedged this trade with a 1 contract short @ 6364.
Also I got the max risk on that trade wrong, the max risk is only £300 and its currently worth ~£470 so up ~150%
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postman
Dow has had enough, Dax too,
S&P still pushing higher.
S&P still pushing higher.
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postman
f2calv
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postman
more bothered about the s&p comp I WANT GOLD
S&P 2035 by Friday close.
Ahh, the world needs dreamers like you.
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postman
Bad unemployment numbers the markets tank then they buy it all back up again before the close. :whistling
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postman
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postman
Dow is down for the open, S&P is still UP on last nights close.
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postman
If oil dropped below $40 today, they would have a 'legitimate' news story to tell people why the market fell. :innocent:
psaTrading
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The rise in interest rates should not have a significant impact on the American economy. Considering a timeline of one year if the rates are situated somewhere between 0.50% and 1% (according to the forecasts of economists), remain at historically low levels and as such should not significantly affect investment nor recourse to credit by households. The impact of rising interest rates should feel via appreciation of the dollar. However, this movement is already embedded part in the current quotation of the American currency. The appreciation of the dollar should feel more in terms of the results of American multinationals (by decreasing the profits generated outside the US) and emerging economies.
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postman
Looks like the Dow has indicated its going down, waited for people to go short and set their stops, and now its going to take out those stops before actually going down.
