Technical/Fundamental Analysis

Discussion in 'Options' started by Nater, Jul 16, 2012.

  1. Nater


    Hello, everyone.

    I was wondering how you guys decide which options to trade?

    More specifically, I'm asking how you guys treat charts and news, and which one you guys give more weight to. I know proper trading involves both, but for something like options, short term trading seems to be key. And with short term trading, you'd be better off having a bigger focus on the charts and keeping any news in check, rather than the opposite, right?

    What do you guys think? And do you guys use any specific systems or strategies to predict price movements in an underlying security?
  2. TskTsk


    Long-term trading options is perfectly fine. Usually longer term have more vola weight while short term are more gamma/delta plays. There is no one answer here (as always)

    As for spesific strategies, yes I believe most people have some system. I know I do. But most arent willing to share.
  3. Nater


    Of course, I wouldn't expect anyone to share the specifics of there strategies :D.

    But given more short term plays, like with week or one month contracts, would more people base there prediction of where the price is going to move on reading the chart, seeing a strong pattern and playing it from there, or is it more likely that they would wait for a news event and play it from there.

    I wouldn't think trying to read the charts for big ETF's like QQQ or SPY would be very useful because there prices are very influenced by politics and general economics. What I'm wondering is, are some stocks less likely to be influenced by these same factors? And if so, would a more technical approach, like trying to find patterns or reading candlesticks, be useful?