Educating myself on trading options

Discussion in 'Options' started by BTStrader, Jan 9, 2006.

  1. ivanml

    ivanml

    The complete guide to OPTION SELLING by James Cordier & Michael Gross

    www.optionsellers.com
     
    #11     Jan 11, 2006
  2. MTE

    MTE

    Options are options, so any good book on options should do the job. There're a few subtle differences between equity/index options and options on futures, which you can learn after you know the basics, but the principles are the same.
     
    #12     Jan 11, 2006
  3. Hi MTE,
    Thanks.

    So, any good book to recommend?

    Gav
     
    #13     Jan 11, 2006
  4. Do you really experience options trading?
     
    #14     Jan 11, 2006
  5. MTE

    MTE

    Check out the Options section under Books tab on this site.
    In particular:

    - Option Volatility & Pricing
    - The Option Trader Handbook : Strategies and Trade Adjustments
     
    #15     Jan 11, 2006
  6. That's cool. I saw these two books in my local bookstore. Will check it out again.

    Thanks.:)
     
    #16     Jan 11, 2006
  7. smallfil

    smallfil

    The difference between stocks and options is the total risk. When you take a stock position----you have all your capital at risk theoretically. That is huge since, you probably will spend atleast, $5,000 on a $50 stock at 100 shares. The advantage is that you can hang onto your stock longer without fear of expiration.
    Options on the other hand has a smaller risk dollar wise. If you put in $1,500 on 5 contracts @ $3.00 per contract----the most you can lose is $1,500.00. The drawback is the expiration date. If your option moves the other way, you will incur huge losses and if you let it expire----you will lose everything!!! Volatility of options is a friend or a foe, depending on which side of the market you have and where the stock is headed!!!
    In any case, I believe it boils down to discipline. You need to learn when to hold them and when to fold them. I know that I have at times let positions run against me longer than I should have!!! Study and practice paper trading. If you decide to do live trading----start with a small position say 40 shares or 1 contract so, as to give you a feel of the market without hurting yourself in a huge way.
     
    #17     Jan 11, 2006