options trading

It is fun, but it's also easy to lose all of your money. OR even more than that.

naked

When discussing the options and futures markets in class someone always brought up that it seems a lot like gambling and it does. but you can always hedge the opposite way to reduce your risk of loss but usually if you come out the victor your earning will be basically the difference in your two positions minus the premium paid which comes out to not very much depending on how much you invest. So finally I get to quote one of the biggest drunks I ever knew in relation to finance as "Go Huge or Go Home" = basically if you want to make a big gain in the options market don't hedge your positions but also be prepared b/c after a bout with that market you might have to put your phone bill in your baby's name.

If you really want something to get you going try some Shorts with your research coming from technical analysis.

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sounds like gambling and fun

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That is exactly what it is. For the most part, no object of value (sugar, oil) even exchange hands. "Traders" are people that deal with options. There is a difference between a trader and a broker. Traders literally sit around and make bets all day according to paramaters set by themselves or their company. They basically look for arbitrage oppurtunities that gurantee them to either win or lose a maximum or minimum.

The way to play this game is to tart up options trading and attract investors.

Then roll the dice. If you get lucky, you get rich. If you don't, just do something else.

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Definitely a great speculation tool. If I had money I would definitely buy some march/april calls right now.

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I wouldn't recommend this with the VIX so high.

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For the most part, no object of value (sugar, oil) even exchange hands.

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Completely disagree. Would you classify fire insurance as "no object of value"?

where do i go to make my first option buy, on oil?

I got the approval to make these trades today and have been doing some research...
I like GM for a dec call option
and CHK as well.
(if u r interested go to yahoo finance under the investment tab select options then enter the symbol and it will give you a list of strike prices and dates)

ETA: I may never actually do this sort of trading but it is interesting.

I agree but the volatility is what makes it so interesting to me though. If it gets low enough to buy in cheap and hits that strike price(like one of these sucker rallies we have seen) or better before expiration it could pay off without too big a risk.
(At least that is my limited understanding of things)