Daytrading Options (buying puts and calls)

Discussion in 'Options' started by mazirus, Apr 19, 2001.

  1. mazirus


    Lately I've been studying the QQQ puts and calls during the day and noticed that they make decent moves and have pretty decent spreads (Usually around 5 cents).
    It seems, at least to my untrained eye, that the risk/reward on these trades is pretty low. Especially considering the small amount of capital needed and the huge percentage moves. Commissions are not too bad either using IB which is only 2 bucks a contract.
    Any input on this matter or daytrading options in general, would be greatly appreciated.

    Off this topic I would greatly appreciate someone pointing me to some information about daytrading e-mini futures. When daytrading stocks I use the futures for general direction. Is there something that leads the futures? What indicators do e-mini futures traders look at.

    Thanks in advance.

    p.s. This is my first post, but I have been a lurker here for a couple months. I really appreciate the time people are taking to share their information and help others.
  2. The spread in options is so huge that it is IMHO prohibitive
    to consider them for a daytrade.
  3. white17


    It is indeed possible to daytrade options. I have been doing so for several years with some success. I don't like trading the Q's however because of the short on downtick reg. It can move against you very quickly. My advice would be to learn how a few stocks trade throughout the day and stick with those. Try to trade options above 3.00$ . Keep your positions small ( 40 contracts or less) and be sure to give yourself enough time for the position to work and also as insurance if the trade goes against you. Be sure to place stops!! Trade only those contracts with good volume and try to buy at the bid rather than the ask. In my experience, CBOE is the best exchange to do so.

    Good luck
  4. mazirus


    Thanks for the replies and the advice white17. I will try buying on the bid through CBOE, if it works, it could be a great advantage.
    Which stocks have you found to have enough volatility, along with enough option volume for daytrading. My favorite daytrading stocks wouldn't work well for this, especially BEAS which can move so fast it's frightening sometimes. I'll have to look into CHKP's options though.
    Thanks again.
  5. white17


    A good place to start is by checking out the day's most active option contracts on
    Watch the way those trade as well as the underlying stock.