Home > Trading Instruments > Options > Where to go to learn options???

Where to go to learn options???

  1. Where would you guys recomend going to learn about options as in books, online courses, etc.. CBOE, Investools, books, etc???
     
  2. thanks, im in the classes there already. Im trying to soak it up. Plus I have 2 books on options that I am reading in the next couiple of weeks "getting started in options" and "options made easy".
     
  3. Options are tricky. I thought it was the easier way to make money. Nope wrong. !! Be careful! !
     
  4. once you learn the basics, put in hundreds of hours of screen time and pay attention to option price movements with respect to the "greeks". you may want to start with options on major indexes (ie.spy, iwm, etc.) never sell naked puts unless you plan on owning the stock....do not do it for income!!
     


  5. If you are in Singapore , you are welcome to join my options trading nights .

    www.TradersRoundTable.com.sg

    .
     
  6. Thank you for the invite, I am in Fl, USA though.

    Just chatted with an Investools rep., 16K for basics and up to 28k for advanced options calsses... Really??

    I have found it interesting ever since I graduated college and had my first job, they teach you how to make the money but never what to do with it.. There still doesn't seem to be "investing" classes listed in colleges, or any undergrad majors that focus or market education, Finance but that still doesn't get into our territory from reading the course focus.

    I mean where do the "wall street" guys get there education, where is a purely market oriented education to be found?
     
  7. Buy books (physical or virtual)
    Borrow books (library, friends, kleptomania))
    Google (web search any topic)

    FWIW, Kindle download is free for your computer and you can preview the first few chapters of a book for free
     
  8. thanks, I have two books that I am going to read front to back, and see where I am at then. Also going thru the free CBOE online stuff.

    We'll see where I am at once this homework is finished. Thanks for the replies everybody.
     
  9. You sound as though you are a novice at trading in general.

    Just a friendly word of warning: Novice and Options when mixed together can be very lethal.
     
  10. I've been trading the ES, DX, Euro, gold and other futures for about 2yrs..

    Plan is to absorb as much info from the sources I listed and pratice with paper trading on my other computer. Thanks for the warning though, I had a similar wake up call when I started with gold futures a while ago.
     
  11. Is this a joke, is anyone paying 16 K to learn options ?
     
  12. I don't know about 16K but I met someone a few months ago who paid 5K for an intensive week long all day course on how to be a day trader. While I was impressed by how much he learned from it, it wasn't anything that he couldn't have picked up from 1/2 a dozen good books and a few months of dedicated work.

    We chatted several times and the one thing I kept hammering him with was money management, regardless of the vehicle. He did nicely on a sim trader and when he went live, he got hammered. Evidently they didn't offer a "Deer in the Headlights" class. :eek:
     
  13. before you trade, make sure test your strategy to understand potential risk. I usually used the options lab. www.theoptionslab.com
     

  14. 16K teaches how to go long a call or a put.
    28K teaches how to do a covered call and a covered short put.
     
  15. Investools:

    This is from the SEC action


    The Securities and Exchange Commission today filed a settled civil injunctive action against Investools Inc., Michael J. Drew and Eben D. Miller. Investools agreed to a civil injunction and to pay a $3 million civil penalty. Drew and Miller agreed, respectively, to pay civil penalties of $380,000 and $130,000, and to be enjoined from violating the antifraud provisions of the federal securities laws. Drew and Miller additionally agreed to be enjoined, for five years, from receiving compensation for their participation in, among other related activities, the sale of classes, workshops, or seminars given to actual or prospective securities investors concerning securities trading. In settling the matter, Investools, Drew and Miller neither admitted nor denied the allegations in the Commission's complaint.

    Here is the link: http://www.sec.gov/litigation/litreleases/2009/lr21331.htm


    The whole options education business in pretty much like the wild wild west. Be very careful who you pay. Personally I think someone that does not trade at all probably not the way to go!
     
  16. Comprehensive start & it's Free

    http://www.21stcenturyinvestoreducation.com/page/tce/courses/

    http://www.21stcenturyinvestoreducation.com/page/tce/courses/course-101/

    http://www.21stcenturyinvestoreducation.com/page/tce/courses/course-201/

    http://www.21stcenturyinvestoreducation.com/page/tce/courses/course-202/

    http://www.21stcenturyinvestoreducation.com/page/tce/courses/course-203/

    Carl
    __________________
    Enjoy life, it's limited.
    You only get as much as you take.
     
  17. The library.
     
  18. +1
     
  19. Google for any option101 article, then read all the posts under Option section by user atticus + dmo and you should be well on your way. The rest you need to figure out yourself.
     
  20. Yes, Atticus posts would be good to read. Agreed.
     


  21. Can you provide one link to a good post from Atticus? His posts are sort of useless.
     
  22. lets put some statistics in front of you.
    what you have to learn is not options. but first.
    where is your edge.
    for each option trade , someone on the other side is holding the bet. now this someone is the HOUSE. big brother.

    now , it is a common known fact. ~90 to 99% of all retail traders loose in the long run.

    so ,tell me where will u fall. YOU are not the house.. or big brother.

    hence what ever you . you wil suffer.. this is too addictive and success seems to be so easy. that you get carried away..
    ---
    best advice is. forget trading. just buy value diversified equities, and hold - Buffet style..
     
  23. Sure, most people should just buy shares in good, profitable, and preferably dividend paying companies and not bother trying to trade. But this site is called "Elite Trader" not "Elite Investor", so presumably everybody here either thinks he has an edge or is trying hard to find one. Certainly no one who has traded options for more than a short time is under any illusion that they're a route to easy or instant riches.
     
  24. Propslave has it right. You gotta read. There is nothing that any of these 5K or 28K seminars is going to teach you that is not already in a book somewhere. In fact, that is pretty much the case for almost any subject in the universe. It's all in a book somewhere. My favorite, as I have stated many times on this forum, is Larry McMillan's Options as a Strategic Investment.
     
  25. Think 2007. You got a chunk of change to invest. You want quality advice. You contact a Fool Service Broker. They provide their research. You buy their "quality" equity recommendations, perhaps:

    AIG
    BAC
    BSC
    C
    FNM
    FRE
    GM
    JCP
    LEH
    LIZ
    MCO
    ad nauseum

    Uh huh, buy and hold always works well too.
     
  26. 10 year from now, those name may fly again for those buy and hold investor.
    For option trader. ..?
     
  27. Don't hurt yourself waiting 10 years for them to come back (ignoring the ones that are wallpaper now). :)
     
  28. Share holders in GM were wiped out in bankruptcy. The shares of the new "Government Motors" are recently issued.
     
  29. If you look at overall stocks and not only GM - you still make money. You can't win in each stocks (some will go burst but most will survive and fly). So far I still haven't heard anyone is richer than Mr. Warren, so buy and hold still work (stop telling the bs story of loss decade since 2000..)
     
  30. If you want to learn options the clean way; just start from the older posts of Tom Preston on this page (thinkorswim archive); most of the newer stuff has very little to add in terms of understanding options if you understand the initial few tp's chats. Then play with them for your hearts content on any simulator and think what should have happened on a particular move and see what actually happens (backtester; tos has a decent free one if you have an account with them).

    https://www.thinkorswim.com/tos/displayPage.tos?webpage=onlineSeminar&displayFormat=hide


    PS: Some videos on the CBOE site are ok; specially the ones by dan sheridan; but they are a bit buttercoated. all valid strategies but wont hold up if you backtest them on periods other than the ones he shows; but they are ok from an educational perspective.. but; heavens sake.. everybody else (pretty much) are mostly jokers..
     
  31. With that logic, everyone should enter the World Series of Poker because Jonathan Duhamel won nearly $9 million in 2010 or play Powerball because a Conagra group in Nebraska won $365 million. Just because someone is exceedingly good or exceedingly lucky at something doesn't mean that it works for everyone or is the best thing to do.
     
  32. All my working life I put the maximum possible into my IRAs and 401ks, which were mostly invested in stocks. (And not at all in options, of course.) I have damn little to show for it. The stock market has gone nowhere in 10 years. The only long term investments I made that have done well were silver and gold, bought at a time when everybody "knew" it was crazy to buy those barbaric relics.

    Anybody who believes those happy charts investment advisers like to show in which your stocks and bonds go up by 10% every year for 35 years is in for an unhappy surprise.
     
  33. Depends on what the topic is. If it's general chat, that interpretation is up to the person reading it. If it's options, he has a good grasp on them imo.
     
  34. It is just chance. You could just as well have been born earlier, invested in the 80s or 90s for 10 years, and made a pile. It is really a time frame issue. The investment advisors always show people longer time frames. Sure you can do fine if you can hold for 30-40 years, but most cannot do that, they need some of the money before that.

    Those guys used to charge 0.8 to 1% not so long ago, and now the going rate appears to be 1.5 - 2%. Not counting the load charges and other hidden stuff, of course. What a racket that industry is. Since people's stash is now half what it was, they simply double their charges. Yet no one seems to notice.

    Most of my non-investment savvy friends are still in bonds or even cash, freaked out by what has happened. Sure way to get killed by inflation. I consider this the ultimate result of the buy and hold mantra the investment industry has so carefully cultivated. One of my older friends is 85. They have lost 2/3 of what they saved by buying and holding through all this mess the last 10 years. They can't even afford to move into assisted living. It really pisses me off.
     
  35. Actually, I have been putting in money since the mid 80s. Most of the gains were lost in the crashes of 2000 and 2008. I estimate that had I simply stuffed the cash under my mattress I would have about 50% more money saved up by now. The stock market is a treacherous place.
     
  36. EXACTLY.. the scum vermin of WALL ST.. how many times have u heard.. HISTORICALL The S and P. returns 8% annually.. ABSOLUTE BULLSHIT...

    look at the NIKKEI

    http://www.forecast-chart.com/historical-nikkei-225.html

    assume u were a fresh grad and u started investing in 1990.. what wud happen. COST AVERAGING to the ground. .u would be ruined..

    ALso. I read somewhere FIDELITY MAGELLEN 80 billion holding .the mutual fund. took in like 2 billion fees in 10 years and returned NOTHING

    think about it.. all the corporate parties. the swanky lifestyle.. the MANHATTAN offices. .all paid by us. and thet did JACK SHIT for us.

    i think there should be MAIN Street and us. hard working folks. .where the @@$^$^ did WALL ST. interject in the middle.. the MASTER PIMPS..


    just buy quality stocks.. and hold.. like BUFFET.. now million $ qs. what is quality. ?? remember buffet saying.. close your eyes and think if this cos will be around in 30 years.. saying that he invested heavily in COCA COLA and KRAFT foods..
     
  37. In some regards, long term investing is like day/swing trading. You need some degree of knowledge, timing and selection as well as learning from mistakes. Buy & hold investing during the past "lost decade" was losing proposition (poor job growth, decreasing household income, a housing bubble, DJIA not far from where it started, etc). Yet doing the same in the 80's and 90's was a big winner. Call it timing. Call it luck. At a minimum, B&H-ers should perform asset allocation which is timing for idiots :)

    This isn't holier than thou preaching. I was on the wrong side of the crash of '87 and had to learn the hard way how painful margin calls are. I gave up some soon to be stellar performers in order to eat the monthly naked puts I sold on expiration Friday, 10/16/87, the trading day before. I still use plenty of margin but now as a PDT but I manage it carefully.
     
  38. hey spindro, decided to spend my Sunday reading through all the posts, so I started at the very end.

    Not too many remember 10/16/87. We didn't have computers we had something called Quotrons, and weren't sure they could handle 3 digits on the DOW. My best trade back then was long the FEB 270 OEX calls.

    Oh well, enough about memories, time to get on with the future, or at the very least the present.
     
  39. Some Sundays you read posts backwards. Some weekdays, I trade backwards.

    Apart from essentially owning every stock on 10/19/87 that I sold/rolled naked puts on exp Friday (10/16), that week was chaotic. One position I had was CC's on Bear Stearns which expired a pt. or so ITM. My broker couldn't tell me for 8 days whether I still owned the position or it had been assigned. By the time the sorted out the post crash mess, I still owned BSC.

    It held up during the crash because there was some sort of partial tender/investment on the table from someone. Over the next week, BSC dropped 3+ pts ITM resulting in a loss. I threatened arbitration since if I had known that I still owned it, I could have taken action rather than unknowingly riding it down for a week. They eventually gave me an account credit for the difference b/t the crash Monday closing price (just below strike written) and the 8 days later price.

    The best trade I made then was getting a mint condition '84 Camaro for my wife :)
     
  40. Buffet style, you mean buying enough shares to get on the board and run the company? Or do you mean bending GS over the table for 10% dividend paying issued-just-for-you preferred shares at the height of the financial crisis? Last I checked most people on this board don't have those investment options open to them.

    For options, my advice is read all of the option articles on investopedia.com, then Options as a Strategic Investment by McMillan, then Option Volatility and Pricing by Natenberg. Someone earlier said never sell naked puts, I disagree, for example selling naked puts in March 2009 would have been a great trade. The thing that gets people into trouble with options, in my opinion, is when they try to force a strategy onto a market that isn't right for it, doing things like selling condors every month to collect "income" regardless of the underlying market conditions. I find that you have to be very flexible with your approach and take what the market gives you, so to speak.
     
  41. Don't listen to these guys on this board , just learn basics and start trading , buy calls or puts. Trade only SPY , its more than enough. Black Scoles formula is total BS , and you don't need greeks.
     
  42. 106 winning trades in a row just plugging numbers into BS box, but that was before 1987, hope things never change for you.
     
  43. Warren Buffet is not rich from buy and hold investing, he buys actual businesses and runs them well (Geico, See's Candies, etc.). He then puts his billions into stocks and lets them ride.

    You get rich by starting or owning your business where you get 100% of the profits. If I had $10 billion I would also put a piece of that in Coke and McDonald's stock and let it sit for 10-20 years. So stop using Buffet as the poster boy for buy and hold.

    In my opinion he is proof that true wealth comes from owning a business and buying more businesses. And Buffet uses more derivatives than most countries.
     
  44. Even Buffet uses options on occasion. They are a tool, nothing more.
    You might want to try the ThinkOrSwim platform as a learning tool. It's got some great visualization tools to help you get familiar with risk profiles, etc. You can also use their historical testing tool to jump back and test trade to see how various things would have worked.
    I think you can do all that on demo mode, but if not, you could certainly open an account with the bare minimum ($3500) and park it there as they don't have data fees, etc.
     
  45. He is a buy and hold guy. He is known to buy businesses and let the current management continue running it themselves as they please. He only says what they do with their excess cash. That is one of the reasons so many company CEOs want to sell out to him. They get a cash payment and can continue to operate without any hassles of short term thinkers (like PE shops or public investors).

    But it doesn't matter. Not many of us have capital or time that we can invest in a stock and watch it do nothing for 10 years. And many of us can't (for whatever reason) sit out of the market for 10 years like he did in 60's or 70's (I don't remember when).
     
  46. Natenberg's book, as is McMillans's, is a beautifully written book that can't be too highly recommended. There is however a slight error in Natenberg, but inconsequential for option traders. On page 70 of the 1988 edition, Natenberg writes in a discussion of the Normal Distribution, "Note that because a normal distribution curve is symmetrical, it allows for negative commodity prices. Is this realistic?"

    This trivial error arises because Natenberg first discusses price distributions (pg.66, Fig. 4-5) leaving the x-aixis unlabeled. Then labels the x-axes in the subsequent diagram (page 68) in terms of standard deviations from the mean. Both diagrams are correct, but the first results in the incorrect interpretation that there is something wrong with application of the Normal error curve to option pricing because it allows for negative commodity prices. The Normal Distribution does not require that prices be negative or imply that. The distribution is called the "Normal Distribution" not because it is commonly observed, but rather because the x-axis is "normalized" so that it is independent of the sign or magnitude of the actual values. The x-axis is always plotted as "normalized" values, rather than the values themselves -- the normalized values being stated as the number of standard deviations that a value lies from the mean. This has the benefit of making one function apply to all situations where the data (values) are distributed according to Gausses function. A secondary benefit of normalizing the x-axis values is that areas under the curve don't have to be recalculated for each situation. This is good because there is no closed form solution for areas under the Gauss function and they therefore have to be more tediously computed numerically. It is very convenient to have one table of areas under the curve apply to all applications. Normalization of the x-axis allows for this.

    Nevertheless, Natenberg's book is beautifully written and is highly recommended. A great read for anyone wanting to learn about options.
     
  47. Personally, I think Natenberg is a horrible, totally outdated book. I have not read the McMillans book, but thumbing through it creates the same impression. This said, I do not think there is a good book on options that combines academic concepts and the general experience of being an options trader. For understanding volatility there is Volatility Trading, a relatively good book that is missing a lot of "meat" on how to trade vol, but for understanding the book-running, there is nothing out there thats worth reading.

    Just my 2bp.
     
  48. I think it's stupid to come to an option trading section and argue long term buy and hold. But what you said specifically makes no sense unless you did not stay invested during the bull years or picked more risky assets.

    Below is the sp500 chart, if you started in the mid 80s and kept adding little bit money to it every month, you would have done very well even with the crashes.

    http://stockcharts.com/freecharts/historical/spx1960.html

    My company matches 100% of my 401k contribution up to 6% salary a year, so i have been contributing the pre-tax limit since i first started working. The whole argument about long term vs trading is retarded, a lot of it depends on the tax situation and your benefit. It makes perfect sense for a lot of people including me, but that doesnt mean i cant also have a trading account...
     
  49. I think this chart is missing re-invested dividends (there is a total return S&P some place on the web) which would make the buy and hold argument even more compelling. There is one big BUT there - your median returns would probably look significantly worse then your mean returns. Which means - if you get lucky, you'll be OK, but if you are unlucky... well, with the late retirement and an early death you'd still get by.
     
  50. to a barber shop

    :D
     
  51. Just out of curiosity, what is your opinion of Cottle's book?
     
  52. I've done Investools, John a Carter, Dan Sheridan, etc. they are all good but if you want something that is free and much better, go to tastytrade.com. Watch the segments Market Measures and Where Do I Start? There's no need to read books especially Larry M's large book. Good luck!
     
  53. I agree with Texas Johnny, it's free and it's interactive (you can e-mail and ask them questions).
    good place to start :)