Is buying options a mugs game?

Discussion in 'Options' started by Pkay, May 5, 2019.

  1. To buy calls
     
    #51     May 6, 2019
  2. ironchef

    ironchef

    I started CELG after reading your thread on CELG, for convenience, I just use it as an example.

    I trade the same ~dozen equities day in day out, rarely change them. CELG was a rare new add.
     
    Last edited: May 6, 2019
    #52     May 6, 2019
  3. ironchef

    ironchef

    Thank God it is limited loss. :banghead::banghead::banghead:

    I do take the other side too. :D
     
    Last edited: May 6, 2019
    #53     May 6, 2019
  4. dozu888

    dozu888

    calm down bro... focus on what the pro boys are doing, major event happening.
     
    #54     May 6, 2019
  5. lol, what's up with that "pro boys" thing? Are you black?

     
    #55     May 6, 2019
  6. ?
     
    #56     May 6, 2019

  7. I'm not sure if anybody answered the OP's question, but @Pkay its possible to lose money buying options, selling options, and combining both!

    Depending on what you're trying to achieve, you can make money buying options, selling options and combining both.
     
    #57     May 6, 2019
    drmark27 likes this.
  8. ironchef

    ironchef

     
    #58     May 6, 2019
    Global OptionsTrades likes this.
  9. ironchef

    ironchef

    I bought more right at opened this morning. Will probably get out before close. :p
     
    #59     May 6, 2019
  10. Buying options is a valid strategy and can (sometimes) provide more leverage and less risk than buying the underlying, but you need to know what you're doing. I wouldn't buy options deep ITM. I suggest no more than ATM which should be a delta of 50 or less. Also, you need to know how long your trade will last and realize that you will lose dollars from theta with each day that passes. Your hope is that upward movement in the underlying will more than exceed the theta. You'll want to look at the various expiration date choices and the theta for each. You also want liquid options with a low bid/ask spread.

    You can lose the entire option purchase price if the underlying price plummets or if too much time elapses with no positive movement. But at least you can't lose more than your initial investment, which is not true of naked options.

    I'm no expert, this is just my 2 cents from my experience.
     
    #60     May 11, 2019
    Option_Attack likes this.