I dug out a very old Options book one with Ed Thorpe (How to beat Vegas with Black Jack), the guy who could not keep his mouth shut when he figured out how to play Black Jack. Why not keep this little bit of information under your hat until you become greatly wealthy and hide by jumping casinos. The Options Market has the highest ratio of losers, percentage wise it's deadly to those buying cheap and out of the money options. The book say's to sell those options once they hit your price target. I had some ICE January $200 Calls I bought for $6.90, I was hoping for $12 because of the way ICE had been following the movement of the Market. I sold out and regret sat in as ICE continued to move too $220 and today it hit $226. Next trade, I am not going to follow my plan, I bought HPQ May $26 Calls and HPQ goes to $28.77 and I refuse to take the profit off the table this book requires you to do. With any type of investment vehicle I think it's plain old greed and not following your plan that prevents you from becoming profitable. We think fifty to 100 percent on a option gain is not enough and instead of rolling those Calls up with profits, we allow the Options to lose value. I bought CVS May $67.50 yesterday for $2.95 and luck be a lady, it's up $3.00 in the common stock but only $1.45 in the price of the Option. The May $65's are at $6 and May $67.50 are $4.40x$4.50 while the May $70 is $3.20 a Call. These are the reasons why Options are weird to new traders of them. Why is a option $4.69 in the money expiring in May of 2014 only $5.6 while a Option that's $.30 below the intrinsic value priced at $3.3? I still don't understand why options don't track the price of the physical stock, maybe somebody can explain why that is the case? I am doing better at this game but only when I take my gains and get rid of a losing position without looking like the 'deer in the headlights' when the physical stock craters. Thank's for the this thread, I enjoyed your insights!
so i was looking at bens trades, and he was active during a bull run...not to take away from his success, but maybe the bull run helped him in his gains. edge would be, being able to identify when you are in a bull or bear market and then properly capitalizing on the trends.