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  • demasibob demasibob Jan 21, 2011 10:25 PM Flag

    IF YOU ONLY TRADE OPTIONS

    You will positively lose.
    Please don't make up stories about winning in options.
    Maybe you have made a score once or twice to offset losses, but in a long run you will go broke.

    While at Charles Schwab for over 15 years, I never (and I mean never) saw a pure option player not go broke.

    DON'T BELIEVE ME AT YOUR PERIL.

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    • Agree 100%. I belong in that statistic having gone broke trading front-month options -- twice. Although there have been days when money was made like tradecaddy2010 did yesterday with GOOG options. Pure options trading is for those with chump change (say 10K) with daydreams. It's like those at the bottom end of our economic spectrum playing keno or a scratch ticket hoping to make it big. But, even if they do, they end up losing it all in a slow fade buying more options. It's an addiction, pure and simple.
      Now, those with 100s of thousands can use options effectively by buying stock and selling covered calls or selling/buying puts. Conversely, like those multi-million portfolios, use them to hedge against losses (puts). Those who sell covered calls and buy puts during a confirmed downtrend can avoid selling (many dislike pulling that trigger) and make money. How do we know when a correction is underway? That's a difficult question. But, when the stock appreciates but you don't want to sell, hedge with a coverd call and put strategy. Better yet, you can always use some funds to even buy OTM calls or puts uses the additional funds or by funds collected by selling ATM calls/puts.

      Unless you are preview to the day-after news, pure options trading is a losing proposition and is no more than Russian Roulette. Those that have come out on top must be: (a) those trading LEAPS and that too only a few based on business cycles (b)basing their views on one or two summers of trading (say, 1998-1999 call buyers, 2009-2010 call buyers) (c) only trading a fraction of their portfolio in (buying) options with supernatural discipline.

      Only an omniscent being with uncanny prescience and clairvoyance can pull off making money with pure options trading over the long term.

      That said, I believe that tradecaddy2010 made the trade. If it was a lie, (s)he could have mentioned a buy at the low (0.25) and sell at near high (18). Nice trade, pal. Your strategy of selling covered calls (esp. front-month) is likely making money in the longer-term.

    • I've lost money on about 5 trades and gained on 3. im up over 400 percent this month on a pure options account wtih bac, aapl and goog. Im a forex trader, i apply the same risk management with options and it seems to work out fine.
      it's definitely possible, just not a cake walk

    • I'll admit that in total i've lost money buying options however since early last year i changed my strategy to only "selling puts" and can honestly say that i've profited on 95% of my trades.

    • I agree with you. I think 99.99% of options buyers go broke.
      I don't usually buy options. I always SELL them. BUT TODAY WAS A DIFFERENT KIND OF DAY

    • moron

    • i should add that i will continue to trade options- since i all ready have lost everything it makes no difference- one time and i will gain my losses back- if i lose 2000 dollars a month for years it makes no difference- one time at 50 times levarge and i am cool-- either way my wrists are getting slit on a daily basis- i have bandages on them so i dont die every opex date

      • 2 Replies to apeifan
      • if not, please stop hurting yourself. i know i go nuts with how the market moves after virtually every trade i make.

        i don't care how logical i am about it, it seems something always goes wrong. even on days that i am set to make a gain, it seems that there is a problem with TD or ETFC or Scottrade or Optionsxpress or ... Sometimes its been some other reason like I get schedulted at my part-time job on the day that the stock finally hits breakeven and then falls back down for a $200 loss but I wasn't there to get out.

        To me, it seems like a curse from god.

    • absolutely true= i have lost 400,000 dollars buying options the past 3 years

 
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