Day Trading Options

attached is an option day trade.. more or less a test..

i day trade futures but i have a few stocks on radar

worked@!

 

I am buying ADI Call 30 for March. Bought some at 15 and 18 cents. Target 30-50 cents.

 

I wish I had bought more. Volume on the stock is also picking up. Still very low.

 

I think it really depends. I use TOS. My commission to buy 1 contract is $1.5.
Assuming the spread is $0.10, I have to pay 10+1.5+1.5=13 for each contract.
If I buy 100 stocks, I will have to pay $5 in commissions (each way) + about .2 cents in spread, which is =$12. This is slightly less, but since options have a much lower margin than stocks, I often take the first choice.
Moreover it is often the case that the spread for options is only .05 so the total cost per contract would be $8.

 

If you're daytrading options (which I suppose is feasible but not something I would really do as you can get killed in slippage) commissions add up fast. You may want to renegotiate that rate and complain that with Optionshouse you can get 5 contracts/5 bucks (hey every penny helps).

Once you start to trade upwards of 10 contracts per position you will definitely want to consider switching to another brokerage firm like Optionshouse where you pay a flat ticket of $8.50 and then .15 per additional contract.

 

Thanks for your reply.. but did you even read what I wrote?

 

seems very odd.

i used to be a local in an options pit.

occasionally there would be 'free money' where we got the opportunity to buy/sell an option for a profit in the same day - but that wasnt really the master plan.

wed essentially be looking to make our money between the option price and the underlying hedge. the key was position management. managing greeks - until the options and hedge expired.

having said that, i imagine the electronic markets are a lot more liquid which was the main factor that forced us to hold inventory to expiry.

i dont trade options much any more.

 

I over achieved my goal.