Anyone here day trade options? I have been messing with that lately. Trading options on stock with good volatility, liquidity, high delta but on any stock the option spread is high even on FB, TSLA... so when the option goes against you, I am losing a lot just because of the spread. I am going to stop it and just focus on trading the stock itself
It can be done, but not easily. Using the VIX to time entry/exits and put/call bias is a start. Here is my system trading contracts on the day of expiration:
Thanks for sharing. The problem with day trading options is the wide spread on the stock. You lose a lot just on the spread
Yep. It can be done. But you have to be wlling to hold and not scalp. Spread kills you. I have been hurt by wide spread. I try to bid in carefully and exit carefully. If done right you can make a lot quickly!
PM @jeffalvinson. He has been successfully day trading options for over 20 years with a system. If you search his posts, he was very willing to discuss his method and there were a number of his posts outlined how he traded and how he selected his entries and exits. Like day trading the underlying, he established exit/stop before hand. I tried it myself but could not generate enough profit to make it worthwhile.
If spreads are a concern then try to get away from those tickers that have more than .10 difference between the Bid/ask. Day trading options is a little different in that you are trying to predict a 1 to 2 standard deviation. They are out there and you can find them. You want to look for compression in the underlying. Also you don't have to go DITM to get your pay day. ATM works also and helps with risk due to the gamma. The opposite direction the underlying goes the slower the losses become. The reverse is for the underlying moving in your favor. Do you use TOS? If so I can show you another trick a lot of options guys don't know about. There is an options chart just as well as the underlying chart, where you can see the position in a chart and apply studies or oscillators to it as well. GL
@3acor If spread is your key concern, why not apply your thinking / strategy to higher value and highly liquid stocks, or the indices, rather than individual stocks?
If you are "messing" you are not trading like a professional trader. You are giving money away to the floor traders to pay for their mistresses and for their cocaine habits.