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re: options trading
Posted on 11/12/08 at 9:28 pm to True23Tiger
Posted on 11/12/08 at 9:28 pm to True23Tiger
it sounds like you don't know much about option pricing. I recommend checking the library before you lose any money on this.
Posted on 11/12/08 at 10:48 pm to True23Tiger
quote:I'm not sure if you're speaking of puts or calls with the "If it gets low enough to buy in..."
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)
I recommend you go over to 888options.com and take some of their online classes and buy some books, too. Options sound fun, but they can rip your head off quick if you don't know what you're doing.
Posted on 11/12/08 at 11:13 pm to LSUtoOmaha
quote:
Define it
sorry I meant the bid price or the price I would buy in at for the contract.
My buddy just explained options to me on the phone a few days ago so my knowledge and lingo are limited. Basically he said there is a strike price and a date of expiration. The price you get in at fluctuates according to the amount of time until expiration and the probability of it hitting that strike price.
That was the "it" I was referring to when I said if it gets low enough.
here is CHK
LINK
so if I wanted CHKKQ.X it would have a strike price of 22.50 and would expire nov. 21st and cost me $67.00(b/c its bid and ask price avg out to around .67x100)(the price I would get in at).
Posted on 11/12/08 at 11:14 pm to Colonel Hapablap
quote:
it sounds like you don't know much about option pricing.
you are correct sir!
Posted on 11/13/08 at 1:04 pm to True23Tiger
is there a broker in BR that i can sit down with to make the investment in options?
never done this before but want to do this by next week.
never done this before but want to do this by next week.
Posted on 11/13/08 at 1:12 pm to novabill
The types of options trades that are good to do in this environment are not the kind you are going to be able to do.
Posted on 11/13/08 at 1:16 pm to Tiger JJ
due to them NOT allowing me due to lack of experience?
This post was edited on 11/13/08 at 1:19 pm
Posted on 11/13/08 at 1:19 pm to novabill
quote:
due to them NOT allowing me due to lack of experience?
Due to you not knowing what they are or how to do them.
Posted on 11/13/08 at 1:23 pm to Tiger JJ
I think he's asking if you have to be accredited to do whatever it is that you're suggesting.
Posted on 11/13/08 at 1:55 pm to Colonel Hapablap
ok, given that i dont have the experience for commodity option trading where else can i invest based on the belief that oil is about to spike?
Posted on 11/13/08 at 2:02 pm to novabill
uso is an ETF that tracks crude oil pretty well. THere may even be an ultra crude oil etf that does 2x crude oil.
Posted on 11/13/08 at 2:07 pm to novabill
quote:
ok, given that i dont have the experience for commodity option trading where else can i invest based on the belief that oil is about to spike?
You also have to pay attention to the term structure of the contracts. I think the curve might be in "contango" right now, which means oil will have to go up a certain % over the next year just for you to break even.
Posted on 11/13/08 at 2:15 pm to Colonel Hapablap
why has technical analysis not been brought up in relation as the best tool IMO for use when trading options/futures?
Posted on 11/13/08 at 2:16 pm to cajun83
that would need a whole other TD board, and there aren't enough of us here to support it.
Posted on 11/13/08 at 2:28 pm to cajun83
quote:
why has technical analysis not been brought up in relation as the best tool IMO for use when trading options/futures?
What kind of technical analysis?
Posted on 11/13/08 at 2:37 pm to Colonel Hapablap
Agreed
But everyone talking of jumping right in to options trading....well I better slow down...After a week of research would IMHO probably be the beginning of the end for most. If you are interested in trading then why not take a chart go back a couple of weeks/months try to predict where it will be based on bottoms/tops and other variable and then pull up the stock and see what you have. Try it with lots of different symbols and get some practice. I know that past charts will not show you what you will be dealing with in regards in what the market is doing these days but it will give you a solid base of learning to start with.
stockcharts.com (condense charts to three month history)
Review amount of buying/selling going on at the time. (indicated at bottom of chart)
Always review what kind of news within company is going on IE: Is there any sort of court or deposition going on where some news might come out at the end. (just one example, keep in mind that you are trying to predict the future so it goes way beyond normal sources of vol. and corp. valuation)
Much more goes into it than that but at least its great practice for what your ultimate goal is.
But everyone talking of jumping right in to options trading....well I better slow down...After a week of research would IMHO probably be the beginning of the end for most. If you are interested in trading then why not take a chart go back a couple of weeks/months try to predict where it will be based on bottoms/tops and other variable and then pull up the stock and see what you have. Try it with lots of different symbols and get some practice. I know that past charts will not show you what you will be dealing with in regards in what the market is doing these days but it will give you a solid base of learning to start with.
stockcharts.com (condense charts to three month history)
Review amount of buying/selling going on at the time. (indicated at bottom of chart)
Always review what kind of news within company is going on IE: Is there any sort of court or deposition going on where some news might come out at the end. (just one example, keep in mind that you are trying to predict the future so it goes way beyond normal sources of vol. and corp. valuation)
Much more goes into it than that but at least its great practice for what your ultimate goal is.
Posted on 11/13/08 at 2:39 pm to cajun83
That's not TA.
ETA:
ETA:
This post was edited on 11/13/08 at 2:40 pm
Posted on 11/13/08 at 2:46 pm to Colonel Hapablap
Please explain to me what about charting in regards to choosing the proper positions when trading options is not considered technical analysis?
Posted on 11/13/08 at 2:55 pm to cajun83
ta typically involves pattern recognition, market derived indicators, and generally some sense of "method behind the madness" beyond looking at a chart and guessing. Learning modern technical analysis by pulling up a chart, making a guess, and seeing how you did is damn near impossible.
Posted on 11/13/08 at 3:23 pm to Colonel Hapablap
While I do agree with you, you also said that it could be reserved for another thread so I kept it very broad. If people really wanted to use it as a tool in trading I believe they would do there in depth research on their own. Anyone who has enough knowledge to talk about a subject like options trading would have enough sense to know that a moderate amount of research is needed before making any financial related decision. Did I give to much credit?
I also left my post very open ended about there being many more factors that go into Technical Analysis.
I am pretty busy at work right now but I look forward to continuing this conversation as soon as possible.
I also left my post very open ended about there being many more factors that go into Technical Analysis.
I am pretty busy at work right now but I look forward to continuing this conversation as soon as possible.
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