This is a pretty disappointing round of responses. In case you are unaware, professional organizations in various industries all over the world exchange results. It seems that some people simply assume everyone else will lie, so they see no point in telling the truth themselves - as if that makes any sense at all. Instead of participating openly they decide to either make nasty comments and avoid answering the question all together or worse, they attempt to insult and humilate the one guy who offers up information. Or are they simply trying to persuade others not to respond? Well, I think we can do better then this. I will ask the question again and this time those who do not wish to actually answer the question need not explain why they will not answer it - in fact they need not waste everyone's time with bitterness and sarcasm. For those of you truly interested in exchanging important information, here's the question: Is anyone making money? Please be specific and tell the dollar amount of your trading account devoted to options and what percentage of return you generate from trading options. I'll go first. I haven't made a dime. I've traded $35,000 for 6 months and I'm behind $1300.00. I'm optimistic that I will eventually learn enough to beat the indexes on a regular basis.
Just be aware that IMO the options gurus make 99% of thier money selling books, services, and tout sheets. I'm tempted to say they make 110% to cover the 10% they lose playing options but I'd just be speculating.
I trade stocks almost exclusively, but I have dabbled with some options the past couple of years though I'm still small time. When I play an option, I always trade them as as close to the money as possible, and I give myself a 2 - 4 week window. I utilize the same stop-loss rules as I do when I trade the stock, and last but not least, I NEVER trade more options than I would stock........if I trade a particular stock in 300 share blocks, I do 3 puts. To anwer your question, I've made good $ so far despite trading them in small increments. Unfortunately, I don't know exactly how much. Happy Trading.
What exactly does that mean, "beat the indexes"? If your trading purely direction, why not just trade the futures? If your taking decay that's one thing, but option trading as a living is about about capturing edge. In many ways, it has nothing to do with beating the indexes. It's either the theoretical IV arb or volatility trading which will determine your ultimate success. Until you figure out these two aspects, you'll continue to flounder. My advice would be to stop trying to compete with indexes and figure out how to put on an options position that you can still "win" with even when the index beats you to a pulp.
We made 12% last year (13 months actually -> Feb 02 - Mar 03) and 15% thus far this year (Apr 03 to present). The account is in the high five figures. We trade options exclusively as well as stock around the positions.
Trajan, an excellent point. I trade long straddles and backspreads. I perfer non-directional trades. I compare my performance to the indexes strictly as a measure of performance. If the OEX is up 5% and I'm up 6%, regardless of how I got there, then I say I'm beating the index.
The thread starter gave an excellent testimony on the viciousness of the options market. Do not, I repeat, do not touch options for the sake of your family. If you still compulsively continue this gambling, the only people who will love you left in this world will be those who claim that only they offer you a fair market. They are exchanges, market makers, advicors, brokers, NASD, and SEC etc. They will love you till you are pennyless.
i was talking to a very well known options guru at a party a while back and i asked him if he knew of any retail investors making an income from options exclusively. his answer was that he knew of no one. subsequent to that converstaion however, i found that a friend of an acquaintance is making a very good living from options. so the answer is that maybe someone somewhere is making money, but not many. not many at all.