xtb forex options trading?

[redart]

Anyone heard of/used these?
I opened a demo account the other day.
Do not have a CLUE what im doing and how options work. I think that you buy a call when you think its going up, and a put when you think its going down. That's it!
Just experimenting though....

I placed my first trade on friday. I bought calls thinking that cable would rally by today and that trade worked.
The 'premium' was, I think $48?
The profit was $197 I think.
I have to choose a strike price, too. Don't know at all what goes into deciding what 'stike price' to choose, but it worked out last time, lol. Also just guessing at the 'expiry date'. I dont know how this information affects things. I guess it changes the premiums you must pay? I dont know what any of this delta, gamma stuff means.

This morning I have bought puts on cable, i think costing $27. Again, i pretty much just picked the strike price out of the air, about 40 pips lower than where the price was trading at the time.

Like i say, i dont have a clue. The premium that you pay ; Is that cost debited from the account and that's that. Like, am i right in thinking that on this latest trade, im down $27 instantly, but the option is still worth a little bit of money, so overall im only currently down $14 or so on the trade. $27 is the max loss on?? Do I lose the price paid for the option even if the trade expires as a winner?
Can i cover a trade before 'expiry'??

here's what the platform looks like and the 2 trades placed.

 

[Hotch]

I would suggest (partly for my own curiosity I admit), that you don't read up anything about options, and just learn from your own experience and create your own view, untarnished by other inputs.

From your journal you seem to know how to trade so you probably won't fall into any obvious pitfalls. I'd be interested in the results, plus, options are pretty damn fun.

...and yeah, you're pretty much right on buying calls when you're bullish and visa versa.

 

[redart]

I would suggest (partly for my own curiosity I admit), that you don't read up anything about options, and just learn from your own experience and create your own view, untarnished by other inputs.

From your journal you seem to know how to trade so you probably won't fall into any obvious pitfalls. I'd be interested in the results, plus, options are pretty damn fun.

...and yeah, you're pretty much right on buying calls when you're bullish and visa versa.

That's what I was thinking of doing (just learn by experience). Should be funny because im completely clueless as ive already shamelessly demonstrated.

Well see how i get on.

Shame that i cant make the demo account more realistic, like staring with 2k and seeing how long it takes to lose it.
It'll take me forever with 50k, because im only trading the very smallest lots possible (as i would if it were real money) in an attempt to see how the gains/losses are when compared to my spreadbetting

 

[daotrades]

Hi Redart,

I traded options for over 10 years, that being said I don't think I would agree with the advice that you not read any books on the subject matter.

If you're working with a really small account, then just sticking with buying calls when you have a Long bias or buying Puts when you have a Short bias, is about all you can do.

But lets say that you really had $50k to throw into an account, you could do some pretty interesting things, such as buying a Call at a lower strike price, and selling a higher strike price Call, because you think the market is going to go up but not beyond a certain point. Or another combination would be to buy a Call and a Put at the same strike price, just because you know that the market has been dead for awhile but some news would be coming out soon to cause the market to move violently in one way or the other but your not sure which way.

There's a few combinations to learn to cover most situations in the markets, after that, there's something called adjustments that you can do to your positions AFTER you get into a trade to hedge out risk (at a cost of profits of course).

Shoot me a PM if you wanna talk shop, pick my brain or whatever.

John

 

[sandyonline]

Just noticed redart's note this weekend.
The XTB London team runs webinars (free) on how to use the option trader platform & the guys are fairly knowledgeable having worked in the derivatives (cfd, etc.) space for years. Option platform allows you to set up your trade in one of 3 ways: option wizard lets you simply set out a view (up, down, little change, no change, etc.) and puts forward ideas; the "one click strategy"tab let's you fully customise what you'd like if you adore detail; and the "order" tab is somewhere between the two. You can buy or sell volatility (calls/ puts). The London office tel number is 0203 394 1700 and there's a webinar tomorrow (Apr 27th) at 6 pm and it will be run weekly. Also as I saw some threads on the topic of "is the €1m competition for real" somewhere, it's actually a no strings attached competition. Winner walks off with €1m as validated by Ernst & Young just by getting the highest ROI via the free contest demo. No cost, no risk.

 

[GTOptions]

Forex trading has commonly known as currency trading, where one may easily make good income with little efforts. Doing practice on demo account would be beneficial to understand the fundamentals of this business.