You can easily make 10% or more on a single daytrade of SPY or QQQQ options. If you can successfully trade SPY or QQQQ itself, then you might be ready to trade their options, otherwise forget it. You will just lose your capital at a faster rate. You can actually lose money on a trade even it the price of the underlying goes in your favor, if you bought high IV and sold on low IV...
since you do not have the $25K...you can use your cash in your account once per day to trade options...trade QQQQ options or SPY...best volume and can trade with like $1,000 or $2,000...only...
I was wondering in terms of risk/return, which trading style (of course we are talking about option trading) is actually better, day trading, swing trading, or mid-long term?
Every successful trader I've ever known has a very, very idiosyncratic trading style they've arrived at through trial and error. They know that style inside out, can't make money trading any other style - and nobody else can make money trading their style. So at some point Mizhael - on your road to being a successful trader - you will have to shut out what everyone else says, take a hard look at the markets, and try to discover what YOU see, what makes sense to YOU, what correlations or patterns present themselves to YOU. That is how you will find success. In the meantime it's fine to ask around what everyone else does. Just don't be deluded into thinking you will find "the answer" that way.
Your points are well-taken. Thank you! I am at the stage of learning from other people and formulating my own style through trial and error. Please come back to the (objective) risk/reward of the trading styles.
My question would be, what advantage do you think you're getting daytrading the options versus daytrading the underlying? Generally speaking, you will pay higher commissions and deal with larger spreads, and then when you consider you're getting a lower delta and have to deal with volitility contraction (assuming you're long the options) that will bite you in unless your trade is long puts and the market goes down, it doesn't make much sense to me. The only reason I can think of is if you are undercapitalized and want to increase your leverage, in which case you definately do not need to be daytrading options if you want to stay in the game long enough to learn it.
Off topic, but you may want to consider learning more about the psychological aspects of trading. You want to understand which habits are harmful and which are essential. It frightens me that you are so concerned with using maximum leverage - BEFORE - you have proven that you can trade profitably with NO leverage. Take a look at the blog of Dr. Brett Steenbarger It should be very helpful: http://traderfeed.blogspot.com/ Mark