I am a 20 year old finance major. I am probably going to start out of college at an investment bank or hedge fund. Until then, I want to find a way to learn the markets and to make myself some money. I read the book The Complete Option Player and it seems to make options trading a feasible way to speculate and make some good money. The spreads mentioned in it are very interseting and seem to be very low risk. Are options a good way to do this without having to make trades every single day? I want to make longer term investments say 1-10 week positions in options. My primary goal is to make some money. Starting capital is 7500. Any input by experienced traders/investors would be appreciated.
Also, I am wondering if anybody around here likes to play arbitrage and what kind of gains they are making from it.
Everyone's goal here is to make money. I doubt that some peolpe actually would like to lose money. If that's the only book you've read on options and trading then you have a long way to go. Options and markets in general (stocks, futures,....) are not a "make lots of money quickly" scheme. It takes time and effort to succeed and become a cosistently profitable trader. Don't forget, you're trading against the smartest people in the world, against professionals who have been in this business for years, so if you think that you're gonna just read one book (no the best one, by the way) and be able to beat them then you're in for a great disappointment. You can make money with any instruments, be it options, futures, stocks or forex. It is really up to you to decide, which ones fit you best. By the way, it is virtually impossible for a retail off-floor trader to trade any arbitrage. Sorry if my post seems harsh, but the reality of trading is harsh.
Thanks for the response. I realize that trading is trully something that takes a lot of time, knowledge, and skill to master. I know that I am a newbie and I do NOT want to just jump in and trade. Many members say books are worthless and that the only way to really learn is to just start doing it. Should I read around 5 books to get a good base? Is that enough? Too much? I also try to read on here a bit but its hard to understand a lot of the trader talk when you are a complete newbie. Any sources of knowledge would be good; mostly up to date and applied would be the best. I'm guessing there are some other online sites that I could peruse also. Any input would be appreciated.
I agree, no book will ever make you a profitable trader, but you still need to start somewhere especially if you're a newbie. So I suggest you start reading some books on trading in general as well as books specific to the instruments you want to trade (if you want to trade options then read books on options). Just click the "Books" tab at the top of this page and then have a look at the books that are there. Classics and Options sections should get you started. Besides, I assume that you know something about markets since you said you're a finance major. As for applied sources of knowledge then these forums are great. It may be hard for a beginner to follow, but there's a lot of good discussions here.
Excellent. I am a finance major but at my college finance courses don't begin until Junior year; which I am going into. So I haven't actually taken a finance class yet! Thanks for the advice, I will be sure to start reading more.
For what it's worth, I traded options almost daily for 2 years starting with a $6,000 account. It was a losing game holding losers because of the PTD rule. Can't make $$ if you can't afford to lose $$. I learned alot trying different strategies but unless you just throw a lot of your stake at a big move that works, $6,000 isn't much. If I had $100,000 now to trade I think I could do well. Maybe that's just wishful thinking though.
I'm sorry but what is PTD. Also, how much did you manage to grow you $6000? I know a kid who turned 9k into 40k in about 6 months and then lost nearly all of his gains. I also know another kid who made about 15k in a summer using options.
http://www.optionetics.com/bbs/default.asp has many folks that talk options (basic) http://www.riskdoctor.com/books.html has a Free book (Coulda, Woulda, Shoulda) and is producing a 2005 revision, He also gives seminars on the web (webinar). Read the Charles Cottle book (CWS) until you understand it. You may have to learn charting, to help your forecast of the market. Paper trade, practice adjusting positions, learn. Enjoy Life