Understanding options and where to trade them.

Discussion in 'Options' started by sebastionay, Jun 26, 2010.

  1. Ive asked about options before on the forum and was overwhelmed by the friendly attitude on the forums so I'm back :)

    However the options brokers that were advised to me for good service do not accept UK residents (optionshouse and thinkorswim)

    What is a good broker for a UK resident to trade at?

    I have a fairly low budget of $1k does anyone know a place where you can open an options account that size?

    I want to open the account because I would like to make some long plays on BP, I want to do this without a stop loss to reduce my risk and think that options offer me the best deal for this. (please correct me if im wrong)

    Regards Seb.
  2. white17


    Well different strokes........etc.

    Personally I believe you are throwing your 1K away in a trade like that. I'm assuming you're talking about buying calls on BP.

    I would sooner look at some of the beaten down drillers with good balance sheets if you're looking for a long position related to the GOM.

    Look at NE, ESV.

    That's not much $ to work with. Good luck whatever you decide.
  3. IV for those options are ranging in the 80% range.

    So you are paying a huge premium for those calls.
  4. Thanks for the responses guys Its greatly appreciated.

    I would not look to risk 100% acc balance on one trade.

    How do you calculate the premium?

    Whats GOM?

    As I said before 'I thought' this would be a lower risk method of opening longs on BP due to the fact that I would not be automatically closed out on price fluctuation as with the dreaded stop loss.

    Is there a better method of doing this?

    Thanks Ill take a look at them. I still haven't decided on a place to trade options from though.

    I currently have a spread betting account with IG Index.
  5. white17


    GOM = gulf of mexico

    You don't calculate the premium. The market does. Premuim is the price you pay to buy a put or call.

    You can buy the actual shares of BP without setting and stop loss.

    Not trying to be mean here but have you ever traded stocks or options before?
  6. Ive been trading stocks via spread betting so that's why I talked about a stop loss. I traded stocks and forex on simulators for a few years before this.

    I don't have a good understanding of options though.

    Thanks for the tip with NE and ESV, on the topic of GOM, HERO is one I like to watch.
  7. I don't understand what you mean here could you describe it any other way?
  8. IV= Implied Volatility

    So what he is saying is, the market is pricing a big vol, meaning buying options is going to be very expensive. In basic terms, even if you were to get a pretty big jump in underlying, you might have paid so much for the premium (because of large IV) that it isn't even worth it.
  9. $1k will get you nowhere in listed options.

    I'd suggest betonmarkets for UK residents, considering the size of the stake. You can go long or short gamma, Euro and American binaries. AON bets are easier to understand, but tougher to hedge, so go into it slowly. BOM will allow competitive offsets prior to expiration if you need to get out.

    SocGen offers binaries as well, expiration and touch bets via their clickoptions site. I had an account there, but they're in the process of closing shop.

    Oanda offers expiration and touch bets on 12 fx pairs, also scales from $1 (to $20k). Their synthetic Euro-range trade offers the best edge of any dealer I've seen.
  10. Would it be ok to ask how you use them, particularly in connection with other markets such as equities?
    #10     Jun 28, 2010