Well, well, there is not too much minimi wants to talk about this topic. Isn't it obvious? There will be no CBOE or PHLX options in about three years. Good bye, Mr. Smith.
Hey thanks for all the responses. It seemed like every thread I read in this forum ended with 5 people warning that options are evil and will take all your money. I plan on trying my hand at swing trading call and put options. I'll post my results here but I'm sure they won't be pretty.
Hi, Anyone know any new developments regarding BOX ? It is almost June. NASDAQ is near it one-year high. Hopefully, there will be great time ahead !!!
Long options strategy (buy calls and puts) works if you know to how to manage the risks associated with volatility, spread, and time decays in addition to good timing.
Here's why I don't like playing straight long or short deltas. When you factor in the bid/ask spread, the loss of premium, the commission cost and the past losses that you have to cover, you need to be "right" by a significant amount of money. Often I was right about the direction I chose, but the underlying didn't move enough for me to cover my costs. To minimize the effect of these costs, I began playing deeper in the money, with very little time remaining. As a rule of thumb, I never played anything that had more then .30 of time value. This gave me a higher delta, reduced my premium and still gave me nice leverage. But still the risk/reward and probabilities of these trades were poor. Eventually I realized that spreads were better the way to go for me.
As others have said, do your home work and be disciplined in your approach. It is a viable way to make money. Don't let the weak kneed sisters on these boards discourage you. Stick to a very liquid underlying and strikes with sufficient volume to allow you some flexibility. I would suggest either the Q's or OEX.