realistic expections for returns per year through options

Discussion in 'Options' started by voyager77, Apr 3, 2013.

  1. voyager77


    I don't know anything about options trading and stumbled on this old article.

    It sounds like bs, probably is, also noticed it was written pre-recession.

    Surely it is too good to be true or everyone would be doing it.

    Step 8 says:

    "Experience has shown me that if I try to earn just 10% per month, I have a 98% chance of doing so. But, if I try to earn 20% per month, my chance of earning that amount is only about 80%."

    That just sounds ridiculous. :/

    I wanted to ask the experts here how much of a return per year someone can actually expect through options trading, if one is conservative and doesn't want to lose all of their money.

    Thanks for reading my thread.
  2. better start reading something other then ehow... please..

    Euan Sinclair, and John Hull.. pick up their books.. read , rinse repeat, read again rinse repeat.. come back ask real questions relative to making money.. i've never heard a more abstract statement about making money in options as the one you have stated..
  3. dfantome


    People who ask questions like that lose all their money, fast.
  4. I found Natenberg to be a good first read. Some say it's an intermediate level book, but he goes step by step so nothing terribly complicated there.
  5. I made something like $70,000 on longing SPY puts and calls in the last couple weeks. My maximum investment in any position was $109,000. I hold only one position at a time to retain focus in that position, although I sometimes overlap put and call positions when exiting a prior trade. Obviously, this rate of return is not sustainable and involves some luck, but I set stops and I don't alter them upon entering any trade. In other words my winning trades are allowed to run, and my losing trades are exited with as little emotional response as possible.

    If you want to know if it's possible to do this for a living; then start doing it. I recommend using's virtual trading program. Set the amount of capital you want to start with, and just start going crazy with options. That's how I started with options, and I suggest a year of virtual trading, (at least one trade, every single day), before committing actual money. With CBOE's virtual trade you can long or short options, and experiment with any spread you can imagine. The important thing is making trades every day, and not getting discouraged when you get your butt handed to you.

    When I had losing days or weeks I would get depressed, but I forced myself to make trades every day no matter what. Also, you need to keep a record of your reasons for every trade and refer back to it.

    A lot of very successful traders have blown it, or choked, and you probably will to. (I know I have). In the end limit your losses, write down strategies, follow your strategies without emotion, and be extremely humble. I believe any trader should virtual trade as well, this will help you to learn.

    If you are not fascinated with the market you will fail. When I go to Barnes and Noble, BKS, I look through investing books until my girlfriend makes me stop; she has no interest in any of this except for using the money to go to LULU. I don't want football, baseball, or any sport; this is my sport.

    If you love trading you will find a way to succeed at it. Don't wonder whether or not you can succeed, find out for sure. Don't listen to anyones advice, or ridicule, but do listen to it. (it's contradictory, but true). Being able to trade is a privilege that should be respected.

    If you really want to know how to trade I'll tell you every move I make. A lot of people on here will be critical of you, but if you ask them for their trades before hand they won't tell you. Many of them are yesterday traders, "I did this or that yesterday", but who cares what you did yesterday it's the far right edge of the chart that matters.

    (There are better traders on here than me; I'm just here to learn, and improve). I do support myself this way though, and that was not an easy thing to accomplish. I started with $10,000 (of someone else's money), and just tried to grind out a few hundred a day. I did it but it got ugly for a while.

    Something that helped me was to stop thinking of money as money. Money is units, or deviations it is not money. Options go up or down a certain number of "units". This is a study of human psychology, and it is not a way to get rich quick.

    Everyone is welcome to insult anything I said; I enjoy criticism.
  6. tmmaloney1, just curious. Are these long calls/puts ITM or OTM on entry? Also are these day trades, swing trades or what?
  7. Instead of making shit up, post some trades in R/T. Otherwise you're selling something and not contributing.
  8. I read the ehow article about the Iron Condor strangle strategy. A couple people were critical of it, but have they every tried an Iron Condor? They didn't say.

    Go to, sign up for virtual trade, and use the recommended strategy if you want to see how it will work. I've used straddle type approaches, but not strangles. Strangles make me nervous for some reason.

    Do the recent new SPX highs make anyone else nervous? Everyone gets all fired up when it happens. Why don't we all just agree to trade the SPX between 1200 and 1500. (I know this is a stupid comment; its a joke but it would be nice to make a living with the Darvas box).

    Oh and a serious question. Does anyone know of a live trading chat room? Like AOL had back in the day. I thought those were fun. Maybe they attracted too many diddlers.

  9. I have a board and there are many on IRC chat.
  10. like atticus said.. if you want true criticism. post some trades real time.. ...
    #10     Apr 5, 2013