Options trading for a living

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

  1. paycheck mentiality.
    it is not doable for you.
    do not quit your job, stay there.

    if just for the sake of several hundreads per day
    donot trade options. options create headache tax book keeping problem.

    trade future, like a contract of crude, treasures interest is a good enough. $150 is just one to three crude 1' or3' bars. piece of cake, make sveral hundreds in day trading future in your account size.

    day trade futures are better choice. you dont need book keep each trade for the tax purpose (nowash sale adj. etc.). plus you do not have PDT limitation, your account is just $20k, you can not day stock options!

    of course you can trade future options, that is harder than stcok options since the volume is too thin, almost nottradable.

    I trade options mainly swing, todaybuy, next day or next week to close. day trade options when optionis near expiration, like thursday/friday. most time, I hold days even weeks months in long term trend. but I hate book keeping, IRS should not set those damn rules. so occasionally I trade futures. I do not want to have hundred pages of trade record to report to IRS.

    #91     Oct 7, 2013
  2. sonoma


    Sorry to come to this party a bit late. But remind me what makes you think that a move of x% is any better time to short a vertical than any other?
    #92     Oct 7, 2013
  3. I don't know if it will be better for the trade that I do, but vol *should* be higher than if an underlying is just slowly moving in one direction. No guarantee of an win, just trying to fade a >+/-5% move with time/duration and potentially higher Vol prior to the trade (assuming no earnings around the corner if the underlying is stock).

    I have this as a quick graphical indicator on my charts on thinkorswim. It is grey if its in between and green if greater (of course displaying the value with the color gradient). The caveat to this is that the underlying has to be liquid, the options need to be liquid (tight B/A) , and have considerable amount of open interest relative to the underlying. This eliminates a large body of underlying's and leaves one with maybe anywhere from 20 - 40 underlying's to do this in. So it's a lot returning to the well when those underlyings show >+/-5% moves.

    I'm trying to find some research that tastytrade did here recently on this subject on I believe one of their Market Measures. It basically looked at different price percent changes over a 10 day period and compared different strategies in different *tradable* underlying's if memory serves me correctly. If I find it, I'll give the title of the show for anyone who would like to check it out.
    #93     Oct 8, 2013
  4. My bad, for some dumb reason I was calculating reward/risk which returns <1. So yes, credit spreads have a risk/reward ratio >1 sense the credit one receives will be less than the potential loss that can occur.

    So a shout out to drownpruf and newwurldmn for correcting me on that.
    #94     Oct 8, 2013
  5. I also wanted to add that this is one of many considerations I use to enter a trade. If the underying is a stock and earnings are near, I don't make the trade. I wait until the day of earnings to try and capitalize on the binary event.
    #95     Oct 8, 2013
  6. My apologies, as I had you confused with the tomcmcginnis fool.
    #96     Oct 8, 2013
  7. sonoma


    Understood. But the other characteristics seemingly don't trump the "extended" move feature because this one seems necessary for you to consider the trade, regardless of whether the other parameters are present. I was just querying whether this 5% move was an intuitive and thus discretionary characteristic or whether you had statistical confidence about price or vol movement subsequent to a 5% move. Standard finance theory would say that over many repetitions, 5% should not represent a unique number. It should be easy to test such a notion.
    #97     Oct 8, 2013
  8. Cmoss


    TSlexi, what did you end up doing?
    #98     Sep 17, 2014
  9. HAHAHAHA IM DEAAAD!!!!! Im actually sitting in class reading this, and busted out laughing hahahahahhaha
    #99     Sep 24, 2014
    SmokingAces likes this.
  10. I disagree with this statement. Mainly the "ease" of generating 30-50% returns. If something was "fairly" easy, a lot of people would be doing it. OR maybe I'm just doing something wrong.
    #100     Oct 5, 2014