Young motivated options trader seeking words of wisdom

Discussion in 'Options' started by optionsdude, May 28, 2008.

  1. Long time reader, first time poster.

    I appreciate all of the great dialogue here especially from opt789, yip1997, Mverickz and others of course.

    I have been trading options since I was a freshman in college (about 5 years now). I am by no means an expert but am able to pay for mine and familial bills. I do see that this is something I will do indefinitely in some capacity.

    I haven't had a "real" job in about 4 years because I told myself that after seeing how horrible working for someone else is (via my parents jobs and myself working retail) I was going to make this work for me. I then sold my old CJ7 Jeep - then, at the time my pride and joy and dove right into the market by buying a laptop and throwing the rest into a discount broker and learned the hard way how to try and make money (like I said I am by no means an expert as I have flirted with a few blowups so far).

    I have over the years migrated from equities (mostly biotech stocks, as my major was molecular biology). I would put on a cheap suit and take a road trip out to California with friends (where the lion's share of biotechs are) and basically faked it to management until I made it (making them believe I had a 100M dollar fund and would just as easily short them as go long them). This was my attempt to get an in with the story behind the equity. I thought if I was going to put my money in a company I better make sure it wasn't a hole in the wall and that I better know as much of the story as I could. Long story short I started doing this full time and became a sort of independent sell side analyst - Yuk, I know. I also got to play analysts off of each other - ratings, recs. etc - that was fun:)

    BTW, I started as an all fundies type of guy and thought technicals had no merit.

    I then migrated to equity options as I could play the approval/non-approval of drugs/medical devices with much more upside then the equity itself. Just so happens that biotechs are usually on the NASDAQ's gainer/loser lists for the day so this form of speculation and in some cases hedging became very interesting.

    I further migrated to options on the indices (mostly the SPY, however - I know, not the true index, but the relations I have been able to derive from the SPY,QQQQ/XLF,CL along with ES, NQ volume lead me to more often than not profitable trades). I have sized up my trades accordingly.

    I use only price and volume when executing intraday trades as the greeks don't apply all that much. That is until I employ an overnight spread or strangle strategy.

    I am mostly and intraday options trader (is scalper the proper term here?) and have started to push the 5% barrier as far as total daily strike volume (roughly 1500k-3k contracts on puts or calls with strikes of the SPY that are either just ITM or OOTM.

    I keep it simple. Just price and volume. My charts are not heavily marked as I feel the patterns that I have seen time and time again are ingrained in my subconscious. My opinion is individuals behavior in regards to money (fear/greed) changes very little over time and thus patterns tend to repeat - that is overly simplified, of course, but it works for me.

    My question is what do I do next? I love trading options and would love to work on the floor before it becomes less populated. Should I? What is the best way for me to gain experience in this area?

    Any and all wise opinions are welcome.