Option trading for a newbie

Okay, I couldn't sit around with this gain any longer. I closed out those 8 AZO Dec. 125 calls at $5.00 for $3985.05.

Looks like my net profit for this trade is $1170.10. Nice start for me with my account now at $13170.10.

Can't believe the guy called me stupid. I wonder if he had a nice 50% winner today too? Ouch. Ben.

edit: wow, I can't believe he said this trade made zero sense. Like I didn't do my due diligence.

 

Bought 6 COST Dec. 52.5 calls at $2.20 for ($1,334.95).

 

Added another 6 COST Dec. 52.5 calls at $1.40 for (854.95). My average price is now at $1.80. Let's hope COST rallies enough for me to get out.

 

Sold all 12 calls at $1.90 and received $2262. My net gain on this trade is $72.10. Not bad considering COST's move against my options.

Account is now at $13,242.20.

 

Bought 10 GS Dec. 75 calls at $2.00 for ($2,015). Looking for some upside to earnings.

 

I'm an options n00b, but I don't understand your motivation for trading options. Cheap and easy leverage?

I hate options spreads and paying those huge spreads. I'm too scared to step in. I like modest-beta stocks with liquidity to help me escape if I am wrong.

 

I'd say leverage is the biggest factor in switching to options. I think you can get a nice return on stocks at this level of volatility too though.

 

In addition to the GS trade, also bought 5 FDS Dec. 35 calls at $1.95 for ($989.95).

 

10% OTM calls with 1 week til expiry???

Ouch...

 

Added another 5 FDS Dec. 35 calls at $2.00. As for those GS calls, earnings tomorrow can push a stock from $65 to $80 on a surprise. Earnings are always the wild cards right? At this point, its all or nothing.