Hello m8 haven't chatted to you for a fair while. Hope your keeping well and your chipping away at 'em and racking up the profits.
Well I haven't done it seriously for a couple of years, explain more in a min.
At the time, as esiotrot says, there were relatively few brokers around at reasonable costs let alone online brokers. A search on the liffe site will give you a list of the brokers and they're costs. These vary immensely and I believe there are some diehards who are charging in my view, extortionate sums to trade and to hold account minimums. So well worth shopping around.
I looked at my track/mybroker as Easi did but I found them to be on the expensive side at that time. The costs have come down considerably according to Easi.
I was using Redmayne Bently via the phone when I started and shortly after was using Charles Schwabb. Now here's the crunch.
I was being quoted different prices within seconds of each other for the same contract.
And the double crunch?
at the time I was using Updata for my shares and options feed, back in the days when they were a good company and not the crap company they are now. (In my opinion you understand).
Well, the prices I was seeing on my screen for the various ftse and shares prices. (Though mainly the ftse was my game, and this is what I am on about) were in some cases 50 points away from the price that either of my brokers were quoting!!!
That is a hell of a lot to give away. £500 quid before you start!
Why the difference?
Well it was probably that the updata software was behind the time feed. To be fair there is an awful lot of info to pass through the system, but they always said that there was nothing wrong with their feed. (Well it must be my fault then that the prices from updata are so screwed up. Can't be from the brokeres, because you trade off of those prices. But why the difference between the two brokers.
That's why I switched to futures.
Same cost at £10 per point for one or five contracts etc, easier to close and with no time decay.
Anyway, back to options.
Once you understand the basics of how they work a very good book to read is John Piper's 'The Way To Trade'.
The guy is a very succesful trader who is still trading today. (That I think is important as well. he's no has been who has suddenly decided to pack up trading and now wants to teach people how to do it/write a book on it/hold seminars etc. If they were that good why pack up trading?)
I think John favours writing naked options against others, but this, apart from not being allowed to do by your broker unless you know what you are doing/have the capital to put up front is a risky way to trade. It favors I think a slow moving market, and where, when 'buying' options you are limited in your losses, by writing options your losses 'can' be uncapped.
It's all covered in the book and gives the pros and cons of both. The choice of which seris to get on is very important. Pick one that is too far out of the money and it will be ages before/if, it goes into profit. Add to that the gearing/time decay that accrues and you might as well pour your cash down the nearest watery recepticle. Get it right and it is brilliant. https://europa.fixedoddsgroup.com//cgmjupiter//linkto_cbet.cgi?l=GB&linkfrom=UK15228
That's a link to a firm I am currently using. Not a fully blown options site, but a good way to trade strategies for very low cost.
I wouldn't deposit too much money with them though as I'm not sure about investor protection. I curently have the second leg of a butterfly running because it looks like my target will be hit to give me a double strike. Where as Iwould normally close one half of the butterfly as it moved away from my price.
Currently have a big expiry range trade running that took 2 days to move into profit (sweat, sweat) and only has a few more days to run. Although you can close at any time the market is open after the first half hour of putting on the intial trade. Which is something I'm not too happy with. The good thing about this site is that you can set your own parameters. The trick being to keep the time span as short as your trade will allow and that eliminates the time decay.
Now, all I want is my prize for posting the longest, most drawn out reply of the history of this site.
Still not at the bottom yet.
Seriously though, if you need to know anything more about options, I shall try to enlighten as best I can
Nearly at the bottom
All the best
still not there yet.