The Most Important Lessons You Have Learned From Options

Discussion in 'Chit Chat' started by tradingjournals, Nov 30, 2013.

  1. What are some of the most important lessons you have learned from options?

    I have learned that there could be free options in the real world that should have a premium if they were traded in a market. I have even seen instances where an option is given for free to the other side, and the other side was thanked for the opportunity to have been given the free option.
     
  2. TskTsk

    TskTsk

    That nothing is free
     
  3. That people that originate threads like this, where they discuss "free optionality" are the people who should not be trading options.
     
  4. :D
     
  5. Honest to God, are you mentally challenged?

    I see a lot of sad people here but you have to be near the top.
     
  6. I have an idea for you, tj...

    Try to imagine being wrong. Think about the possibility - and yes, I know, it's very difficult to imagine - that you're missing something obvious. Specifically, maybe the option "given for free" was either a) worthless; or b) was actually not given for free.
     
  7. dbphoenix

    dbphoenix

    Whenever I see threads like this, I can't help but be reminded of that South Park "World of Warcraft" episode.
     
  8. options are the best trading vehicle for a trader.

    the worst vehicle for an investor.

    each day there are a lot of good option day trades. R/R >1:2

    each week there are a lot of good trades. R/R>1:5

    monthly some good trades R/R at 1:20

    yearly some good trades R/R at 1:100

    the best trading vehicle for trading discipline exercise
    the best trading vehicle for small retail traders

    I always treat buy options as buy lottery. but the odd is far far greater than lottery. buy lottery most time means donation. but buy options most time means hit home run lottery.

    .buy the cheaper option, if look both side(call/put), if call is expensive compared to put, then buy put, vice visa
    .never buy expensive option, over 1 buck is not a good buy
    .donot buy ITM, do best to avoid ITM(liquidition/levearge hurts)
    .buy breakout OTM, bootom pick,short squeeze, top pick
    .do not invest in options
    .buy big volume of options, do not buy little. if hit, hit big(the chance is far more than 50% if you follow common sense).
    .must love gambling, true risk taker. never try to be safe, protective.
    .buy options with the underlying with most volatile chaerestics (events/news frequently out)
    .do not buy options its underlyings are dead/nowhere market
     
  9. An example of free options in the trading world are the calls and puts that a prop firm owner gets from his customer traders. The traders pay him to give him free options, and thank him for the "privilege". What causes people to be happy to pay to give free options?

    When I write real world I do not mean market. I mean real world as free options in laws, in a business transaction, in a contract, in type of businesses, etc.
     
  10. wtf? Are you stating that the upside from his profitable traders is w/o risk? It would help if your grammar wasn't that of a 6yo.

    lol, what puts, exactly?
     
    #10     Dec 1, 2013