Options trading for a living

Discussion in 'Options' started by TSLexi, Oct 4, 2013.

  1. TSLexi


    Hi guys,

    I'm thinking about trading options for a living. I have $20,000 saved up from my job, which I strongly want to get out of (escort), and I have had trading experience when I was in college.

    My goal is to make at least $150/day. Since position sizing dictates I should only risk 10% of my total capital on a single trade, I need to make an ROI of 7.5%/day (not compounded, of course!). I plan to take the profits out of the trading account at the end of the week.

    I plan on trading volatility, for example buying a call while shorting the underlying.

    My questions are:

    1. Do they make IV-based indicators, like a MACD, RSI, etc.?
    2. Is $150/day a reasonable goal on a starting capital of $20,000?

  2. blakpacman


    You mean 0.75% per day, or 15%/mo, or 180%/annum non-compounded.
    Sorry to say this, but you're dreaming.
    Just be careful not to lose all your $20,000 very quickly. Easy to do in options.
    Timetwister likes this.
  3. TSLexi


    Please elaborate how this is not unreasonable, though, even though it now sounds like it is. $2000/trade with an appropriate trailing stop, try to make a 10% profit, close trade, withdraw profit to checking account. Repeat. Day after day.

    Or would you recommend I do swing trading, and trade long straddles on earnings? That seems to be more conservative strategy.
  4. Checkout www.tastytrade.com. They will teach you how to trade options. Realistically though, you more than likely won't meet that goal ($150/day) until you get experience under your belt and more capital to be consistent. Just a suggestion.
  5. $150 a day on 20K? why bother with options , trade stocks.
  6. elite74


    You think it is easy to get a >100% annual return on your money?

    $150/day on $20k is about 150% annualized return for 200 trading days.

    That is completely unreasonable. First of all $20k is not enough to really start trading. Second if you have to ask this question you are not ready to trade to begin with.

    I hope this advice saved your $20k.
    Timetwister and SmokingAces like this.
  7. Its not hard to make $150/day trading a $20,000 account. It is hard to make $150/day trading a $2000 account (10%). If your goal is $150/day you are going to need a bigger account or be willing to take on a ton more risk (not advised unless this is just play/discretionary money for you). If I were you I would pick a smaller goal - maybe $150/week and keep adding profits to your account - while keeping your regular job. Then when you have sufficient dollars you can evaluate how to make trading your day job. If you have managed to save up 20K you are on a good path...better than most. Just my opinion....
  8. You've never traded before have you.
  9. blakpacman


    When I was younger, I naively thought the same way. Actually, I was even more unrealistic than her. Hindsight trades are always easy.
  10. sle


    Obviously, every situation is different and you should take any advice on the internet with a brick of salt. However, here are a few thoughts:

    (a) The general thought is that you can, fairly easily, produce 30-50 percent returns while trading options. Your capital base is smaller, so it is actually easier for you produce better returns on capital - you can take advantage of various capacity-constrained strategies and you have much lower liquidity requirements
    (b) It takes time to learn how to trade options and it takes even more time to come up with strategies that consistently make money. It helps to have some background in statistics and proficiency with Excel or programming.
    (c) Instead of starting live right away, you might be better off paper-trading a few strategies and trying to figure out how you can improve the results. In general, you need to have 3-4 active strategies that are fairly diverse in terms of sources of alpha to feel comfortable. It will take work and time.
    (d) You almost always better of trying to work in the industry first and learning using OPM first. Not sure if that route is availible to you, but I would say working for a small fund and picking up bits of wisdom from the traders there would progress your thought teach you more then risking your own capital.
    #10     Oct 4, 2013