can you do this with options???

Discussion in 'Options' started by ProgrammerGuy, Sep 16, 2007.

  1. Really all I know about options are that they are derived from "the stock" and they are leveraged products.

    a general rule is that a stock must be liquid enough to day trade, hence about > 1,000,000 shares per day of volume.

    In general can you day trade options, or is the cost of getting in and out too much?

    Thanks
     
  2. ssss

    ssss

    ProgrammerGuy



    Really all I know about options are that they are derived from "the stock" and they are leveraged products.

    a general rule is that a stock must be liquid enough to day trade, hence about > 1,000,000 shares per day of volume.

    In general can you day trade options, or is the cost of getting in and out too much?

    Thanks
    ##################

    Spread is against operator .But today offered some low spread options iwm, qqqq,cat ,intc with spread 0.02-0.03


    Depend from opertor trade intensity .After news on volatile company from NDAQ (and NYX alsov can be)

    some options with great part of intrinsic value performed per day 100-200%

    One trade with profit 100 % would enough .
     
  3. neke

    neke

    In general the answer is NO. Do not day-trade options. The costs (commissions but especially the bid/ask spread) is too much to overcome. If an option is trading bid 2.00, ask 2.50, you need about a $1.00 move in the stock (say 2% move if the stock is priced at $50) just to break even. There are not many opportunities that confer you such an average edge.

    The exceptions for me are special circumstances that my warrant a day trade (holding from say morning to end of day). I have made more money though with swing trades (1 - 5 days). These conditions have to be fulfilled for me to make a day-trade:

    --Price of stock is at least $50. These tend to have better spreads
    --There is enough volatility in the stock (probably a momentum stock)
    --There is good price movement on the stock today (some news or follow up moves).
     
  4. Some can, most can't.

    You have to find an edge in order to trade options successfully. that edge has to be some degree of timing and/or selection.

    Have you thought about trading liquid stocks against your options? :confused: