Options Successfull Traders

tar

Well-known member
Nov 18, 2006
10,441
1,308
223
#1
my question is for successfull traders only : Do you purchase options ( calls , puts ) risking your own money OR you purchase options risking some of the profits u have made from futures trading ?
 

abottoml

Active member
Jan 24, 2006
111
3
28
London
#2
The best way to make money with options is by selling them rather than buying them .... However, my apologies, I still don't class myself as a particularly successful trader.
 

tar

Well-known member
Nov 18, 2006
10,441
1,308
223
#3
Thanks , intresting , do writting options making money for u in the long run ?

I mean options here forex , silver , indices
 
Nov 23, 2007
2,778
789
123
#4
It isn't anywhere near as simple as "selling will make you money" or "buying will lose you money"...

some people will just trade options for the Delta, as an alternative to trading the underlying stock or future...

however, to make the most out of options trading, you should not consider your position as Long / Short the options, rather Long / Short each of the Greeks... the trick is then to build a position in the greek you have a view on, then employ the most cost and risk effective way (through buying and selling the options and the underlying) to manage the exposures you are carrying on your book.

Note: I'm not an options trader
 
Sep 6, 2008
2
0
11
#5
does anyone have an opnion about "spread trader systems"?....i am considering them for their 6,000 course
 

tar

Well-known member
Nov 18, 2006
10,441
1,308
223
#6
Good ,, the reason y i asked my question is that many options expire worthless , and the profits from normal trading is not that much as a percentage from the account if we use low risk . so i was thinking is it right to use profits from normal trading to purchase options to gear up the account expanding
 
Aug 19, 2008
6
0
11
#7
For tar

my question is for successfull traders only : Do you purchase options ( calls , puts ) risking your own money OR you purchase options risking some of the profits u have made from futures trading ?
Hello tar,

This way of thinking will get your account blown up before you know it!!

If you can't successfully measure the market direction for a particular instrument (stock, index, forex etc.), don't even bother entering an option trade. The profits you have made, and the money you have in your pocket are the same. This is a mental rule that a trader must write on a piece of paper, and stick it on his trading terminal.

Especially for people just starting options trading, this is the mentality that makes them lose money consistently. It's this "false" impression of security writing options gives, that makes them many times reluctant to get out of a bad trade. You know, "I still have money, lets wait today and see what happens. I will get out tomorrow". No matter what your style is, no matter how greeks fall into your system, YOU NEED TO KNOW HOW TO MEASURE THE MARKETS SUCCESSFULLY.

In my book, a novice should start papertrading the plain vanilla side of the options, to see in real time the dangers and rewards of this type of trading. If he/she can master this, then proceed to options writing.

You should learn how to walk, before trying to fly.

famagusta
 

gooseman

Well-known member
Feb 20, 2008
1,776
219
73
#8
up before you know it!!

If you can't successfully measure the market direction for a particular instrument (stock, index, forex etc.), don't even bother entering an option trade.
You can trade options and be direction neutral if you so wish-it costs a lot and is time intensive but it's possible....
 

tar

Well-known member
Nov 18, 2006
10,441
1,308
223
#9
Hello tar,

This way of thinking will get your account blown up before you know it!!

If you can't successfully measure the market direction for a particular instrument (stock, index, forex etc.), don't even bother entering an option trade. The profits you have made, and the money you have in your pocket are the same. This is a mental rule that a trader must write on a piece of paper, and stick it on his trading terminal.

Especially for people just starting options trading, this is the mentality that makes them lose money consistently. It's this "false" impression of security writing options gives, that makes them many times reluctant to get out of a bad trade. You know, "I still have money, lets wait today and see what happens. I will get out tomorrow". No matter what your style is, no matter how greeks fall into your system, YOU NEED TO KNOW HOW TO MEASURE THE MARKETS SUCCESSFULLY.

In my book, a novice should start papertrading the plain vanilla side of the options, to see in real time the dangers and rewards of this type of trading. If he/she can master this, then proceed to options writing.

You should learn how to walk, before trying to fly.

famagusta
Thanks anyway , i am not talking about writing options , i am talking about how can i compound my profits , i was thinking to use the profits from normal trading to purchase options ( buy calls or puts ) . ofcourse this will happen after studying and doing the homework , i tried many times buying calls and puts on fx , silver and indices , and i am doing fine so far . But i understand from your answer that if i am successfull then i can use my own money .
 

Lee Shepherd

Well-known member
Feb 12, 2008
2,165
570
123
#10
Thanks anyway , i am not talking about writing options , i am talking about how can i compound my profits , i was thinking to use the profits from normal trading to purchase options ( buy calls or puts ) . ofcourse this will happen after studying and doing the homework , i tried many times buying calls and puts on fx , silver and indices , and i am doing fine so far . But i understand from your answer that if i am successfull then i can use my own money .
If you want to compound your profits....stick em in a bank.:)
 
Likes: gamma
Feb 10, 2007
40
0
16
#11
I lost my life savings (net worth) with ODL securities on an advisory basis in 5 months. I invested £71,500 and was left with just £900. The Brokers name was Frank Freeman and traded options. I was commissioned over £32,400.

The case has now gone to the Ombudsman for arbitration.

If you want to know more email on: louisjordan10@yahoo.co.uk
 
Feb 10, 2007
40
0
16
#13
Not really, it was an advisory account. I have only invested in FTSE 100 stocks on a CFD limited basis.

Mr Freeman advised me to to invest in FX, Oil, and Indicies. All strangles. He would just phone me up and say he was doing X,Y and Z.

When i opened up the account he said he would only be recommending low risk strategies.