Hello, I have just a quick question about trading options. I havent really been into options, just saw a vido on Youtube. Do those strategies actually work where people open like 6 positions just by looking at the general direction either up or down, and make 100s of $ very fast?
Yes, with options you can make money VERY quickly ... and lose just as quickly. Everybody expects to be "above average" and make lots of money. Where do you suppose all that money is coming from? The markets are a giant poker game.
Anyways, dont believe any youtube videos on options. Options are very complex, and they are a zero-sum game. That means if you make money, someone else is losing money at that moment. The financial market for the most part is very efficient and there is no such thing as making huge profits fast. Dont fall for the hype.
Being said option is very risky, I find it's easier to make money than trading stock, as long as you use strategies to lower risk, and hedge your positions. And sometimes you have to think like an option seller rather than buyer. If you own stock, then by selling covered call is a perfect way to collect more than just simply selling the stock. I would suggest you do some study and know the ins and out of option if you really wanna get serious, as I think option is the only way for small retailer investors to gain in the stock market. Good luck.
Have u ever trade option?. I think you just a speculators who just buy option and lost money. Or u just hear from another person about option market. I trade option for about 50 trades/month. Deposit only USD 10,000, using only 50% of my capital, my return of capital is +5%/month. Trading since jan 2012.
that is not true. option is the best tools for small retail traders. 1. high leverage, that can nullify the effects of little trading funds 2.quick results, maybe one day, or half hour, your money is doubled, in stocks, the chance for this kind of quick results are very little, almost none. trading stocks are like walking by bare feet,but trading options are like riding supersonic airplanes. SPEED decides the survival rate. in the wild animal world, the fastest one always survives and prosper. that is why disaures arenot hereany more. while thoselittle creatures are still here.
That's a terrible analogy. If you can double your money in half an hour, you can also lose half of it in half an hour. Higher speed as you call it, just implies higher volatility of the price. Remember options are zero-sum. Options are great for structuring risk, investing in vol or just for leverage, but that's it really.