What sets options traders apart from stock traders?

Discussion in 'Options' started by tenebre, Oct 2, 2009.

  1. spindr0

    spindr0

    Size doesn't matter :)
     
    #11     Oct 2, 2009
  2. spindr0

    spindr0

    Good analogy but I'd go with trading options is like skiing in a mogul field on a black diamond slope, occasionally in white out conditions :)
     
    #12     Oct 2, 2009
  3. spindr0

    spindr0

    >> If you don't have the capital, you will get flagged as a pattern daytrader (no more than 3 buy/sells in a day over a rolling 5 business day period, the 4th gets you flagged) so you're trades have to be very selective and worth the effort. Or you will be swing trading positions held overnight. <<

    If you maintain the 25g minimimum, you can hold up to 100g intraday and you can roll it over as many times as you like.


    >> Option traders react very fast, far faster than stock traders. The only way to get near a bottom or go short near a top is to put it in ahead of time and be near the front of the line. Otherwise you are likely going to be ahead of the market to get filled in most cases. <<

    LOL. You trade as fast as you want, regardless of whether you trade stocks or options. Using options doesn't get you in the front of the line any faster than an equity trader.
     
    #13     Oct 2, 2009
  4. gaj

    gaj


    absolutely, completely wrong.

    it is 4 day trades in ANY security.

    buy MSFT, sell MSFT.
    buy CSCO, sell CSCO
    buy DELL, sell DELL
    buy IBM, sell IBM.

    you're now a PDT.
     
    #14     Oct 2, 2009
  5. Trading options is like chess.
    trading just equity is like checkers.
    trading forex is like tic-tac-toe (the only winning move is not to play)
     
    #15     Oct 2, 2009
  6. If you want leverage, you should join prop.

    Option trading is for those who like to add more dimensions instead of directional bet.

    If you are good at trading stocks, don't trade options, just join a prop firm to get the leverage that you want.
     
    #16     Oct 2, 2009
  7. drcha

    drcha

    I can't speak for other options traders. But I am not smart enough to trade stocks.

    I have no idea what a stock is going to do. But to sell options, all I need to know is what it is not going to do, or at least what it is not going to do very much of. I find it hard to be 'right' but not nearly so hard to be 'not very wrong.'

    And, I don't even have to be right about price at all; I only need to be sorta right about volatility.

    The danger comes in the leverage. But nobody is forcing you to take full advantage of that feature. You can trade as small as you want.
     
    #17     Oct 2, 2009
  8. tenebre

    tenebre

    Very enlightening stuff, thanks!
     
    #18     Oct 3, 2009
  9. Saheem

    Saheem

    You would be better to use the leverage of options on other side of equation. Maintain the same profit outlook while you reduce the risk and exposure. Make the same money safer.
     
    #19     Oct 3, 2009
  10. Clearly, we're better looking. ;)
     
    #20     Oct 17, 2009