I think some people don't understand that the fact that you don't ever actually have to have the capital to purchase the 100 shares. You can just leverage way more for your money without have to plunk down 19000ish dollars on physically buying 100 shares. If you know what you are doing with options, there is plenty of money to be made without being greedy. Even the best only hit about 1 in 3 options in the money, but that 1 is way more than enough to cover what you paid on the other two.

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Posted by ThaBigFella

baton rouge

Member since Apr 2006

2043 posts

Posted on 8/2/13 at 9:57 am to STB

This is true, the visa $175 option for next friday is $.93 cents, no way it hits $175 next friday, the flash crash is over. I just learned this all in the past 90 days or so, but since then i've amplified my returns significantly, can't believe I never dug into selling puts before.

It's literally buying shares at a discount to today's price or profiting the premium....win/win either way if you were gonna buy the shares at today's price anyway.

This post was edited on 8/2/13 at 9:59 am

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Posted by Ace Midnight

Between sanity and madness

Member since Dec 2006

90841 posts

Posted on 8/2/13 at 10:02 am to STB

quote:
I think some people don't understand that the fact that you don't ever actually have to have the capital to purchase the 100 shares. You can just leverage way more for your money without have to plunk down 19000ish dollars on physically buying 100 shares. If you know what you are doing with options, there is plenty of money to be made without being greedy. Even the best only hit about 1 in 3 options in the money, but that 1 is way more than enough to cover what you paid on the other two.

I am currently in Kindergarten for Options. However, I did, adroitly, select Optionsxpress as my brokerage. Hopefully, I'll be an Options middleschooler by early next year. I just want to make sure I understand the risks before I just dive in.

I can do basic technical analysis. I understand dividends, from a very elementary level. Options seem like all the fun of gambling, with "options" :rimshot: to minimize the risks. The goal is to increase the performance of the stock. I just want to fully understand the risk/reward balance, first.

This post was edited on 8/2/13 at 10:02 am

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