Initially, go for the QQQQ and SPY options. Very liquid, you can be quite flexible, small positions, bid/ask much narrower than other options. Why not try the November QQQQ or SPY?
Hi Prevail, Sorry I was a bit cryptic. I was referring to the type of spread that you feel was preferable during high volatility scenarios such as at the moment. Also time frames and motivations for entering these spreads. e.g. scalping, swing etc. Perhaps other spreaders might chime in. Regards Johno
I was primarily referring to verticals. a diagonal putspread would have worked better on monday. just wish I could predict those tail events, lol. I like back month, otm backspreads on, if they ever go itm they will do well. there is no question going naked is the most efficient way to sell. but if one trade gets away, it can be over in a day. but you know all this...
does anyone know how qqqq moves in relation to es? although i am getting some good coins on es options, still lost a bundle from their bid/ask spread especially for otm back month legs. qqqq options bid/ask looks a lot better, but how does move similarly to the es and also in term of volatility, thanks.
Why not consider SPY options? The spreads are as tight as in QQQQ and it is essentially the same underlying as ES.
I've been selling options and blogging about it for the past 18 months. You can see all my gains for the first 17 months and my bigger losses for the past month of mistakes. If you aren't on top of your game (as I wasn't) you can lose two years worth of gains before you blink. I knew the risks, took them and now I'm down some. Don't overextend, but if you are planning to go long a stock, I still think it's a good way to enter your position. Getting in for more than you can afford to buy if assigned the underlying stock is not smart. - Alex http://mytradersjournal.com/stock-options/
Thank you for that very honest account. What more really needs to be said? Only that Alex was fortunate to have gotten in 18 months ago and to have banked substantial gains before taking big losses in the past month. The less fortunate ones started much more recently...
I use SPY options to hedge the ES instead of ES options for that exact reason. Used to use ES options to hedge. SPY options are better.
That's the best advice, start small until you've felt some pain and realize how it can turn on you. I actually started about 8 years ago with options, but just had more money to invest in the past couple of years. I started small and learned a lot on what not to do by losing small amounts at the beginning, but simply didn't plan for such a quick deep fall this time. That's really a rookie mistake and I admit it. - Alex
I just got update on the fund. Unfortunately for their investors, they went bust. This week they realized 85% loss from the top of their assets. The thing that amazed me, is that some investors took out large loans and dipped heavily into their home equity line of credit to invest. The biggest capital infusion happened this year, because of fund earlier stellar performance, and thus the losses are huge for them. redduke