Really appreciating all the replies. It's what is so helpful about ET- different perspectives. Omcate, I know you trade QQQ; does that mean your strategies are basic enough so that you don't need optionvue or other software?
Slowly is better than never. Human being is human being. The more time I spend in front of a trading screen, the more likely is that my judgement will be impaired by greed and fear. Detachment is a virtue in trading.
Until you are trading a seven-figure account and have at least 5 years of successful experience, you would be well advised to stear clear of options in any form. Stick to trading the underlying and you will be a much happier person. For long options, spreads and decay will kill you. For short options, there is tremendous downside risk. And spreads are seldom worth the time and trouble.
Caution the guy, sure, but telling him he needs a million bucks to trade options is a bit over-the-top, no? wee
"Until you are trading a seven-figure account and have at least 5 years of successful experience, you would be well advised to stear clear of options in any form. Stick to trading the underlying and you will be a much happier person. For long options, spreads and decay will kill you. For short options, there is tremendous downside risk. And spreads are seldom worth the time and trouble." Sorry, but this person sounds like a broker, no offense. First off 5 years of experience, in what? Trading the underlyer? Nonsense again. I know plenty of options traders who went straight to options with out trading any of the underlyers prior, LOL. DECAY WILL KILL YOU, once again not a proper statement. Decay will kill you only if you dont understand ur position and the months your strike is in. Sure, there is Time Decay, but will it kill you, only if let it. Short options there is tremendous risk...ONCE AGAIN, MISSINFORMATION. There is risk in anything shorted.....but TREMENDOUS RISK, LOL. There is a diff. between being short a call and long a put. Gamma, Delta's all come into play when you put on a "tremendous Risk" put or call position, LOL. Please be advise...IMHO...this site is not a good place for you to obtain good information. There are a few that know what they are talking about HOWEVER, 99.9% dont do this for a living and really dont know what the speak about. Be forwarned....... If you want a list of the people on this site that i personally know that trade options for a living, or other markets at that Email me. You have to be very careful to whom you speak with,,,,this site is full of SCRUBS and Brokers.
Amen, Brother... Short gamma is far more forgiving than trading spot. The zero-sum argument when applied to options spreads and combinations is fallacious. I know it hasn't been mentioned, but I'm sure that argument will be made eventually. riskarb
Could you explain this pithy paragraph. Thanks for the additional comments. Would like to hear what maverick74 has to say..?
In my case, I do this for a living, and I do know precisely what I am talking about. However, in your case, to propose to a new trader that short options do not carry "tremendous risk" is to clearly put yourself in that camp of 99% who DON'T know what they are talking about. And for each trader you know who went directly to options trading (SERIOUSLY doubt they were trading their own account privately), I will show you 20 who busted out. There are very good reasons why government regulatory agencies require virtually every exchange and broker involved in options to display disclaimers regarding the "Serious Risk" of options trading. It is a very high risk game with a huge advantage for the house, that is only appropriate for select individuals and institutional money. To say otherwise is to display an obvious lack of experience and knowledge of the real risks involved for a new trader. Everytime I see a post like yours it is clear to me that it comes either from (A) Someone who is trading other people's money, or (B) Someone who is enamoured of the theoretical possibilities of options but has not long traded their own account.