Hey man, I'm just listening to the PropTrading Chat you had going on with Don. Man, i wished you guys had this conversation a few months earlier. Just last november, i started tape reading, and due to a few reasons which i will not get to in more details, i quit the job..... part of the reason was because of the hybrid market that was getting ready to set in motion, and the exact reason you stated... the art of tape reading is and will become a lost art in the future as nyse becomes more electronic. I remember you started trading options after your tape reading gig, and after listening to this conversation you had with don regarding the proprietary firms that are out there these days and what's going on within the industry, it kind of reminded me of your current trading instrument. I am getting very interested in options and have started to educate myself on the subject, but i was wondering if you could share some of your experiences in the options market -- as well as dropping a few tips if at all possible? For example, what books would you recommend reading... from beginner level -> intermediate -> advanced. And what sort of thing should i concentrate first.... the different strategies, as well as the little tricks you've picked up over the years... like what to look for. I know you are usually very busy, but if you ever get a chance to read this post, i would really appreciate some of your inputs. I have been a fan of your comments and insightful knowledge on tape reading. Too bad my career timing was a little off =p Anyway, hope to hear from you soon. kind regard. chief
It appears to be an open message/post by chiefraven for others to also possibly gain from any full or partial response by Maverick74, firstly. I'm game. Maybe Don & Bob Bright, too.
also, how do you pick which option you want to play? 'cuz i remember you used to like to pick out news stocks back in the tape reading day, 'cuz you know institutions would be in them. and all you have to do is to figure out who the big buyers or sellers are and ride along with them. are you picking your options stocks based on what news they have? In other words, do you pick the news stocks for options because of the volatility? and if so, what's the next step you take?
if you listen very carefully to the chat you will hear mav say that most of his guys are not trading options any more. they are into futures nowdays. that should be a huge clue to you that options are tough even for pros now.
Here are the books to read: Beginner - "Fundamentals of the Options Market" Moderate - "Option Volatility and Pricing" "Option Market Making" Advanced - "Dynamic Hedging" "Options Trading: The Hidden Reality" Then throw in "Fooled By Randomness" for some perspective. Concentrate more time in Index options vs equity options. Start with backspreads. Learn to scalp the short strike on your backspreads. Great trade for the beginner. Can be used as a premium selling strategy or a gamma scalping strategy. Practice both. Good luck.
Right, my notes show that futures, options trader Mav said that a good directional, volatility trader can sell options, including naked premium, but newbies can't; only 1% can do it (successfully/profitably).
hey mav, what do you trade most often now? futures or options? and how long do you usually hold your options plays?