Starting to learn options (where to start)

[demetri]

So much information out there, in one way it's great, but in another way it can be very overwhelming. Not to mention all the get rich quick schemes as well.

So I guess I am being a bit lazy here and just want to cut out all the BS and find out where the best place to start learning how options work. The different variation, how to trade them etc etc.

Books/websites/coaches etc

I have started with the below book....

Trading Options For Dummies, 3rd Edition (For Dummies (Business & Personal Finance)): Amazon.co.uk: Duarte: 9781119363705: Books

Buy Trading Options For Dummies, 3rd Edition (For Dummies (Business & Personal Finance)) 3 by Duarte (ISBN: 9781119363705) from Amazon's Book Store. Everyday low prices and free delivery on eligible orders.

www.amazon.co.uk

and hope to move onto this one next ....

Options as a Strategic Investment: Fifth Edition: Amazon.co.uk: Mcmillan, Lawrence G: 0884389531726: Books

Buy Options as a Strategic Investment: Fifth Edition 5th ed. by Mcmillan, Lawrence G (ISBN: 0884389531726) from Amazon's Book Store. Everyday low prices and free delivery on eligible orders.

www.amazon.co.uk

 

[Gramos1219]

I’ve also just started options trading and I’m reading Options Trading the complete crash course 3 books in 1 by Warren Ray Benjamin.

 

[ChrisDouthit]

If you want to learn how to trade options the right way I would check out Option Strategies Insider, the free option course teaches traders of all levels how to succeed at option trading.

 

[drcruz]

To learn how to trade options you have to know HOW you want to trade options first, before diving in. If you want to trade in a traditional style of picking direction (i.e., swing and/or trend trading) you should master that first. It's already hard enough trying pick direction (win rate from 30% to 40%, listen to Tom Basso in his Chat w/ Traders interview), because trading long options adds a layer of difficulty due to theta decay.
If you want to SELL Options you improve your win rate (>85%), you limit your profitability and can have MUCH larger losses (especially if you sell naked positions, search for James Courtier, Long Term Capital Management and Victor Niederhoffer). If selling / writing options interests you can go to Option Alpha (free video course) and Tastytrade (also LOADS free content)

 

[sideways-sid]

Have an outcome in mind and understand the numbers relating to the probability of achieving the outcome.

If your strategy involves words like "hope", "luck" etc don't trade options.

 

[cantagril]

If your strategy involves words like "hope", "luck" etc don't trade options.

Damn! I spose that means that "cross fingers" is out as well??

Hope you're keeping well in the Shire

 

[Henow1969]

If you are interested to learn options then you can search for material about it which is available on the web. You can read ebooks, articles, blogs, visit forums and find a lot of material to learn options.

 

[Tone104]

I personally wouldn't touch binary options with a very long pole. You probably have as much chance of success as betting on the outcome of a horse race. For most people betting on binary options, for that is what it is, will prove to be a losers game and the broker/bookmaker knows it.

 

[Tramadoon]

Hi guys,

I had an options question I was hoping I could get help with. It's a covered call question.

I wanted to know how these are set up in the platforms... with my basic question being this.

I have 100 shares of XYZ which I bought at $10. I then sell a call option at $11, and my plan is to hold till expiry.

Now, if at expiry the stock price is $11.01, will the platform automatically sell my shares?

Or will it charge me $11.01 x 100?

I assume it would just sell my shares, but I can't see any "covered call" button when selling the option.

Thank you!

 

[NVP]

options is what the grown ups trade .....so never underestimate its complexity ...

 

[Tramadoon]

Well, I managed to find out, so I thought I'd write it here too... for the next person.

On my platform at least, if you sell a call and you own the shares, the default is that your shares will go if the call is in the money on expiry. Now, I've bought shares at different prices, so I haven't quite figured out which shares they'll sell... but anyway.

When you are selling the call, you can see "settlement style" or something similar. If it says "physical" that means your stocks will go.

Good luck everyone.

 

[NVP]

I personally wouldn't touch binary options with a very long pole. You probably have as much chance of success as betting on the outcome of a horse race. For most people betting on binary options, for that is what it is, will prove to be a losers game and the broker/bookmaker knows it.

It’s illegal and outlawed in most grown up countries......fortunately

 

[BeDutch]

I personally wouldn't touch binary options with a very long pole. You probably have as much chance of success as betting on the outcome of a horse race. For most people betting on binary options, for that is what it is, will prove to be a losers game and the broker/bookmaker knows it.

Tramadoon, not sure what platform you are referring to. Realize though that a "Covered Call" is a position consisting of two legs, the long stock and short call. Depending on your platform, you can close it with one com ined order or two seperate orders. I use Think or Swim and it gives me a choice how to close. I typically close the position with one order, but may leg into it with several orders. Visit OptionAlpha.com for more information

 

[Tramadoon]

Hi BeDutch, thanks for taking the time to write. Actually, I've learnt quite a lot since I posted the question. OptionAlpha happens to be my go to site..!! Thanks again buddy.

 

[Windlesham1]

I've been writing an options blog trading FTSE options only- message me if you like -it's all for free, I have no interest in other people's money

 

[kevinberry]

Start with watching videos and then go with theory. That way it’ll be easier to understand the concepts.

 

[Elsa50Pounder]

I started with a trading course on one of the trading websites. I watched a few videos as well. But the thing that helped me the most was a demo account. You can start there.

 

[Windlesham1]

I started with a trading course on one of the trading websites. I watched a few videos as well. But the thing that helped me the most was a demo account. You can start there.

Saxo bank is great for a demo but you cannot trade strategies just individual options. I don't care for equtiy options I make my ££££ from the index. I post a weekly trade on my own blog for UK traders

 

[brfrexloid]

If you are planning to learn options, you can certainly start from the internet. There are a number of websites, pdfs, journals, e-books, and other resources that can be referred to. You can also go through the books available for learning options. In addition to this, you can consult an expert or a mentor who can guide you on options.

 

[Rhanna]

To learn how to trade options you have to know HOW you want to trade options first, before diving in. If you want to trade in a traditional style of picking direction (i.e., swing and/or trend trading) you should master that first. It's already hard enough trying pick direction (win rate from 30% to 40%, listen to Tom Basso in his Chat w/ Traders interview), because trading long options adds a layer of difficulty due to theta decay.
If you want to SELL Options you improve your win rate (>85%), you limit your profitability and can have MUCH larger losses (especially if you sell naked positions, search for James Courtier, Long Term Capital Management and Victor Niederhoffer). If selling / writing options interests you can go to Option Alpha (free video course) and Tastytrade (also LOADS free content)

Do people buy options way out of the money then use those options to purchase the underlying stock for far less than it's current market price, then sell said stock for current market price for a profit of the difference minus cost of option?