What are your top issues and challenges with Option Trading?

predator001

Junior member
18 0
I was recently talking to some friends whom I would classify as between beginner and intermediate level traders. We got to talking about trading in general, and the options markets in particular, the challenges facing beginner and intermediate level option traders.

It was an interesting discussion, since the same problems seem to be cropping up several times (although worded differently). I thought I would ask in here to find out if other traders have faced (or are facing) the same problems. Not wanting to bias the results, I have deliberately not spelt out what the common problems/pit falls are, but it would be interesting to see if the same problems come to the fore again.

So, what are your top issues and challenges with trading in general and option trading in particular?
 

predator001

Junior member
18 0
Hehe, ok, I hear you ...

The pricing issue comes up again (I can't say I'm surprised :) ) - however, care to clarify what you mean by trading - empty sack?
 

scose-no-doubt

Veteren member
4,630 954
I have tiny, tiny balls when it comes to putting money on the line so I stick around here and wax lyrical on the more academic (safe) aspects of trading and engaging in all manner of lulz.
 

predator001

Junior member
18 0
Ah, I understand. at least you're honest ...
 

Martinghoul

Senior member
2,690 276
There can be only one issue and one challenge in trading (options or otherwise): how to make money :).
 

Hittfeld

Well-known member
437 12
Because they are options - not futures!
 

Wwill

Junior member
13 0
and because options are very very deferent vehicles compared to futures... as they offer more flexibility due to their complexity and this is why they are more difficult to understand... and understanding does nor guarantee successful implementation in practice. The header of this thread is too general but my top issues currently is the ability to properly assess and apply timings and adjustments :innocent:
 

marameo

Junior member
19 0
The header of this thread is too general but my top issues currently is the ability to properly assess and apply timings and adjustments :innocent:

Adjusting means accepting a new risk/reward scenario. Worst still is selling options to collect premium to adjust. Just wrong? cut the position...
 

Martinghoul

Senior member
2,690 276
why would anyone choose options instead of futures?
People choose them for a variety of reasons. The right reasons are to be long a liquidity (gap) option and also to be able to add dimensions and risks to your trading strategy.
 

Wwill

Junior member
13 0
Adjusting means accepting a new risk/reward scenario. Worst still is selling options to collect premium to adjust. Just wrong? cut the position...

Yes, a new r/r scenario but by doing this I try do keep delta-neutral overal position which happens to be harder to achieve in reality than in theory :rolleyes: and requires constant monitoring... and cannot be easily automated.

And also options offer variable leverage in cotrast to futures... deep OTM are more leveraged, deep ITM are less leveraged so being aware of this gives us another useful tool...
 
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Just4Fun

Junior member
45 1
There can be only one issue and one challenge in trading (options or otherwise): how to make money :).

Surely it ought to be the other way round, no or yes ?
The mission ought to be not to loose money.
After all, the great majority (both calls and puts) expire at the money, out of the money or even worthless.
Then the great majority of punters are in the majority, on the loosing side.
The small minority are on the winning side, no or yes ?
But the small minority are just that, a small priviledged group.
Gaining admittance to any small priviledged group cannot be easy.
Then the mission is to find a way of joining the small priviledged group and avoiding the majority, interesting conundrum...:cheesy:
 
 
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