Do you have to be a good stock trader to succeed in options trading?

Discussion in 'Options' started by elitetradesman, Jun 25, 2011.

  1. You have to be good at judging price distribution of the stock and not neccesarily direction to have a good chance of making it in options.

    Even neutral stats like flies requires some competency in discerning distro of the stock since a good writer will write after the explosive move into a quiescent period and the buyer needs to do so vice versa.
     
    #11     Jun 28, 2011
  2. I have had much more consistent performance trading options that stocks over the years. However, every option trader must have experience with stocks. You don't necessarily have to be a good stock trader. Just an experienced one. Unless of course you are just trading volitility, but that is another discussion. A couple rules to keep you out of trouble (my own opinion):

    1- It takes years to master so start very slow or you will lose money.

    2- Remember an individual stock can go from $100 to $2 or $100 to $200 overnight. I've seen both scenarios happen. Just remember this when writting uncovered options on individual stocks.

    3- Admit that you are wrong and cut large loses.
     
    #12     Jun 28, 2011