I try to get up early enough to do some research before the open.. but it's tough. I'm on the west coast and the 6:30 open comes mighty early... I try to catch 5 or 10 mins of news before the bell.. then I've got to be out of here by 8:40 to the real job.. then I'm back here at 6:30 to catch some more news. The 12+ hour days minimum are kind of getting to me. How do you guys keep up? Are most of you exclusively traders?
vhehn: You're right. I'm going to go back to dealing with equities only for awhile after today. I may do some covered writing, but that's about it. I'll get back into the options after a few more months of studying. I'm getting spanked again today by a straddle on VLO, each side of which I'm somehow down on now. I suppose the huge movements in the last couple of days pushed the volatility way up... and now, already, back down just since I bought them less than 2 hours ago? How quickly is the volatility recalculated??
Super, On and off it took me 5 years to learn how to be consistently profitable. And it cost me alot of money. But I learnt, and I kept learning. Now I run a hedge fund. The irony is that you have to learn a whole lot about all sorts of differnet techniques to understand they all worthless and that what it takes to really succeed is simple pragmatic stuff. You need to trade with an "edge". When you truly understand what that means you are on the right road. All the best.
Permanently! Of course there is not one single guy/company/system doing a real calculation; the IV is a virtual figure that describes the current prices given strike, longevity etc. The bid/ask of every options is what determines the market-price and thus the IV, and as we know these are constantly adjusted. Ursa..
F*ck me - what was I thinking. Trying to introduce some levity into a thread like this. ET is great for reinforcing how stupid your average punter really is. I often wonder who takes the other side of my trades. I guess we should all be thankful for wide-eyed hopefulls who bring their life-savings to the market with dreams of 200% p.a. Griss to the mill.
Your posts seemed to indicate that you don't have a vast amount of experiece. The LAST thing you should be doing is trading options. With the spreads and time decay stacked against you, you're just putting another hurdle in your way. You must first learn to trade the underlying equities successfully, with consistent profit. Until you can do that, forget that options exist, in any form.
I've HARDLY got dreams of a 200% return.. I realize I'm going to incur losses for awhile. I'm prepared for it... and I'm here to learn how to (hopefully) reduce the size / frequency of those losses to the point that I'm eventually profitable. I'd be quite happy to just break even this year. Or even trade all year at a small loss. Fine by me. This is as much a hobby to me as it is an investment. If openness and genuine curiousity from newbies is discouraged around here, then that's fine. I'll observe quietly. However if some of you are charitable enough to share some nuggets of wisdom with me, that's even better. I have no guidance here. no mentor.. so I'll take help wherever I can find it.
Truth: I've actually done pretty well in equities.. but options are a whole new ballgame. It's hard to get used to the degree of volitility in their pricing. Such a huge amplification of the movement of the underlying. Anyhow you're right, I'm going to lay off the options for a bit, but continue to track their movements.
==================== SuperjF; a] You instincts were partial right; that was an above average range on DHI, but nothing real strange for a bull market, note they bought near 200dma , earlier in year also. z] Dont treat it like a hobby!!!!!, keep posting however; Jack Schwager 3 top trader books are excellant, if you want to learn it as a business.
Murray, Thanks for the input. I'll look into the books. I've been burning through trading related books like mad lately. Always looking for new ones. Any other words of wisdom for a young buck?