If EMC is going to go up like I believe it is going to do. Are options a better way to make money here? Dont know much about options. Sorry I am so ignorant. I am trying to learn this world. I would love to get some honest input here.
[Thank you... How did you learn about this? How have you learned what you know? Are you successful doing what you do? ]
Success is only a measure of how much and to what extend. Some people like to boast how often they are right on the message boards. But if I tell you that I trade SPY, QQQQ, DIA, and/or IWM with 90% successful rate, people will say that I am lying on a message board. So I digress.
I employ one strategy only with my option only trades, which is trading indexes. I normally use options to hedge, or fix my broken stock positions. There are aggressive and conservative strategies. I use the most conservative and consistent strategy, IMHO, for my growth account. I rarely use options to play stocks except when earnings comes 1 day before expiration and is after market closes. That's called gamma scalping plays. I don't want to get into it too much, but that's how I use options.
I first got exposed to option via a web based service which I don't feel like to adverstise for them. Their program is very expensive but good, but I think that the value is to learn to do it right. I think they have done a pretty good job for me. I am still using their services, but only to do market researches.
I learn the rest of my strategies via books and other traders, and yes, and lots of mistakes.
[What do U mean? That it only has so much time, and then it is gone. ]
Because option contracts are decaying assets, you don't normally buy them, you sell them instead. That's what the pros do most of the time.
Buying option contracts can only be part of a larger, more complicated spread strategies so you won't be exposed to naked call/put situation.
Options is like gambling and its hard to play options when you get used to them...best bet is not to start.
The only time one should buy options is to buy a protective put or sell coverd calls.
Personally, I wouldnt sell covered calls does not protect much on the downside and one gives too much upside (though the options strategy one can use in an IRA is covered calls).
Know that buy a protective put right before earnings will be relatively expensive.
One can actually use low risk option strategies such as selling far out of the money options for samll income or to sell a put if one really wants to own the stock.
Do options on indexs. I do iron condors on SPY. 9 wins out of 10. Year over year. Double my account every year.
[Having a long equity position in SWIM, want all you Think or Swim customers to step up your trading.....Get those DART's up.
SWIM should report solid Q4 earnings.....and the forecast for '08 is Great ]
Yaaahhhoooooo!!!! Nice to meet a TOS'er here.
you need to know more than how they work...you have to learn to price them, play "spreads" etc...My advice is to pay the 5,000. and go to an optioetics training session and learn there. You will lose more than that on your first 3 trades if you just buy straight puts and calls....
There are many books written about option strategy, and I've read alot of them. The Black-Scholes algorithym thats built into every option market makers calculator has a number of variables, all of which affect the price of the option.
To give yourself a fighting chance, an individual investor needs to be aware of how options are priced
Lots of homework
Best advice Hose :
" Please go to the library, Barnes & Noble, etc. These forums are a fun way to pass free time, but you're not going to learn much here. Especially anything insightful about trading options.
Please go to the library, Barnes & Noble, etc. These forums are a fun way to pass free time, but you're not going to learn much here. Especially anything insightful about trading options.