I actually do understand the risks. Been there done that since 2010. I am a full time trader trading my own capital. The risky part is I don't have any formal financial trainings, everything is self taught.
-------------------------------------------------------------------------------------------------------- Ironchef, our thinking is very similar on many subjects. I was wondering what kind of option trading you do?
-------------------------------------------------------------------------------- Traderlux, in the almost 12 years I have been reading the ET forum, I have never seen anyone trade with the success of the ET member named "optionsinvestor" with the thread: My trades Discussion in 'Journals' started by optionsinvestor, Nov 14, 2017. He is constantly hitting option trades with +100% to +200% winners and has success on approximately 2 out every 3 trades, and doubles his small starting account every month or two months. These are real time calls. His thread is worth a read if your interested in successful ET option traders.
I am just a beginner, still trying to understand option pricing, learning the greeks, etc. I am just doing simple directional bets, both longs and shorts, calls and puts, placing bets on my view of the underlying direction. Some will say I am just gambling. Best wishes to you.
Actually @sle is right. I Sorry, I wasn't referring to your not understanding risk/reward from a trading perspective. But realizing the mental anguish (health and pressure risk) of trading ones own capital especially when their trading capital is a significant portion of their net worth. Sounds like you may be in a similar situation. I don't have a finance background either. Electrical engineer by training but have been in full-time in various business ventures for the last 5 years. OPM does have advantage of better margin rates because of the scale, better commissions rates and being able to do trades of larger (and less riskier) instruments that a smaller capital could. Also, for certain sized accounts, you have will have ability to trade international options. International options opens up other possibilities of diversification and (to my understanding) better mispricing arbitrage.
Would these be in single name or index vol? I presume the latter since the bid/ask in single names would probably make a high turnover strategy unprofitable?
I always have some very low buy orders in place for big market drops. I was in cash when that took place. My buy orders filled I sold before close for a $10800.00 profit I love big bad news because I only hold a short time and only get in big on big drops
Welcome to the club. Actually, after a couple of years going at it, everything became just numbers on a piece of paper. The greed and fear of winning and losing were replaced by the joy of pursuing the puzzles of winning and losing trades. Good luck and enjoy your journey.
But watch out, take some $ off the table when you are able to. Just like buy and hold SPY beats fancy hedge fund for the last several years. We look like geniuses, until the market turns bad, then the professional traders, the MBA, PhD economists, quants will rule. Regards,