How to trade options reddit

Profit on Canadian National Railway Co. This subreddit is for everything related to options trading. IV crush, but surely they are those with time to recover. YOLO stock went bankrupt. The gains shown are skewed because I sell and add to the positions all the time; for example I might have 20 contracts on whatever on tuesday but only 5 or less by friday showing smaller numbers by the end. Then as familiarity increases, place puts on daily, weekly, and monthly for FANG stocks, QQQ, and NVDA? Come ye faggots of little knowledge. Options sound like a good time.

Then start looking at where the open interest is a few weeks out, and place trades in the most interested strikes. Walked away with some nice gainz doe. Dabbled since and lost enough money to buy someone else a yacht. AAPL, JPM, FB, VOO, CBS, and CSX. It took me a while, but I like their method of going around 30 days out or so and selling premium, and taking profits early, instead of trying to win big in a big gamble. Is the bulk of this thread selling premiums or simply purchasing stock? What percentage of capital do you allocate to daily vs. The Profit with options book really helps teach you.

Where did you all learn your options trading? Got curious and took online classes from an options exchange. Now I profit a few thousand per year selling covered calls. Buy long term call options in a bull market. Ha I suppose the odds would point in that direction. Saved up 8 grand and bought some contracts on meme stocks like wsb told me too. Make half million in 5 months. Make your own opinions and dont buy too far out of the money and get a expiry of two weeks or a month.

Lose 25k learning basic shit. Ever notice how a big move in the morning makes your calls rip up then never achieve the same profit? Their trading platform with a good rate structure. What in particular helped you on reddit? Your suggestion forgot to mention not to get fucked by theta decay. DM you screenshots I took. Now I just buy entry positions during dips and thank Donald trump for letting me retire at 33 and the insane and unbelievable part is. Yes exactly options profit calculator is where I learned and gained confidence.

Are you just buying with a big spread and hoping volume picks up closer to expiration? Sometimes I time the dip just right I think last time was in June and I make both ways. Thank you so much for this link! For those of you putting up these massive gains. And the other reason is If I love the stock so much long term just buy the stocks shares. Having to deal with this long term is just not good for my stomach.

It takes away risk to a already risky thing by having some safeguards. Ha more like just asking! Would you agree that testing out trades with optionsprofitcalculator. No way to get around losing money. Really, its about formulating and creating a method that works for you. Get approval to hedge. Wish I could leverage with puts. What are you guys trading though?

You can count the people here that actually make massive gains with options on one hand. First, with options you have decay, and bunch of types of volatility and unforeseen catalysts and premiums. Or are you trading ITM? Start buying QQQ and FB and NVDA calls. Jan 2019 270 Calls and around that time frame it looks like volume is near zero. But I also think there has to be a few that thoroughly study options, and this is simply the best subreddit for stocks that I have found! The rest of the people that like to brag only show you the good stuff. How did you learn on this sub? The video goes over selling calls and puts.

Price dropped to this low because of a fixable issue like missed earnings. As someone who has made a quarter of a million dollars trading options then losing it all. At first, beginners learning options can be extremely confused by the many concepts and terms that they have. Hope this is a decent resource for the very beginner options traders to get started learning about the very versatile tool of options. Strike price: The price the stock has to reach to have the option contract be exercised on or before expiration. Precisely why I only do it with money I can afford to lose, and even then once I figured that out with an extremely conservative estimate I went and halved that percent. What the OP just said. Expiration: The day the contract of the option is exercised or expires worthless.

An option is known as a financial derivative because it is derived from another value, like the share price. Options tend to be fairly leveraged strategies, and they also tend to be relatively low liquidity compared to equities. Contract: 100 shares of stock. Writing naked calls can be extremely dangerous. Not a bluechip company, but a good one. But by using naked puts, I was sacrificing the unlimited upside in exchange for the a much higher likelihood that I would make at least some money. Even though the possible losses are straight forward, they still might be obscured for new traders.

Both these situations I am happy with because both these situations are likely. To me, selling naked is the equivalent of the blackjack tables. AAPL strike at an expiration in April. There is still a lot to learn about options, like what determines premium price. No matter what I still earn that premium. OK, I get the sentiment. But, so is all of investing. To anyone reading this I suggest a bare minimum of 1 year doing paper trades and reading several books before you even attempt it with real money.

If the current stock price does not fall below the strike price by expiration, the contract expires worthless. This is an actual trade I did but numbers are rounded down. Could you elaborate a little on what your method was? Especially when you could just write calls against it instead. Stock price does not move very much within first 2 or so months. However, there is a lot more to learn about options from there. Did you get lucky a few times with big earnings bets? Personal method of mine. If the current stock price does reach the strike by expiration, the contract is exercised and you are liable to buy 100 shares per contract at the strike price.

NOT because of lawsuits or anything that could have major repercussions. The seller of the option is the writer of the contract, while the buyer of an option is the contract holder. Buffett quote: never trade naked. The video goes over what options are, the terminology you should know, as well as what calls and puts are. Premium: The amount a buyer of a contract pays for the contract. But the loss of money can be astronomically high. EDIT: I reread this and I feel like the tone is wrong here. BEFORE and not after.

If the current stock price does not reach the strike price by expiration, the contract expires worthless and you lose your premium. Buying the stock outright had the exact same downside risk. The very basics of options are actually very simple, and not difficult to learn for the most basic beginner. Also selling naked puts. In exchange, I carried some risk if the stock went down. But I felt like my research in the underlying equity made that risk very manageable.

Just going to add my two cents here. Theta is on your side. Selling puts gives me time decay on my side, because I can just purchase the option price at a cheaper price. You can start with doing call and put options as a beginner. RSI is below 20, oversold. Hope this clears things up! However, you can buy close to avoid those margin calls.

Options account setup yet and want to learn everything possible before I start Option trading. Thank you for that. There are free classes on Coursera and EdX that cover option pricing. NOM or BXOP or PHLX? All the exchanges are pretty different. Now would the price for options be same for RBC or other brokers out there or is it different with different brokers. Could I ask simple stupid question.

Is there any online school or any college or any other place where I can go learn how to trade options from the very basics of Calls and Puts. All of the places that have that data seem to want to charge for it though. Volume of a stock means, bad bad move. CBOE has a virtual trading platform capable of options trading. The intro chapters are the most useful, and free on that link. They might not cover every practical detail, but will give you a good background in the math and theory which is tremendously helpful in real trading.

What do you mean when you say NYSE or NASDAQ? Canadian and trade mostly on NYSE or NASDAQ and not on TSX. What are you interested in learning? RBC canada, I buy and sell through my investing account. Options and pushes a method of selling option premium and accepting risk based on probability. So yes, you should shop around. Having to keep time in check I am guessing. You might be better served by contacting your broker or the exchange directly. Their free info is quite valuable.

Yeah it seems like a lot. Start to get a feel for how the greeks effect the price movements. PTSD comes out and I make a better choice. That can be quite the advantage, allowing you to buy a lot of Apple shares for under market value if Apple should shoot up. If that delta was not greater than price of the option, I would not buy that option. Lets say you wanted to buy a weekly apple call. Amazon that explain the basics. Have you been trading stocks for a while? We will pretend its 25 cents.

Read up on different strategies. When I started out I read a couple of the books first, then watched some TastyTrade videos, and here I am losing money just like the big boys. They are formed from people buy and selling them. Just google and half a book. Well this is the million dollar question, when do you buy any stock. Not really sure what this question was asking. It clicked for me when I created a options calculator in excel that calculated the price of options on expiration. Like you wanted to know what a call is. Essentially it just took the price I anticipated by expiration and subtracted from the strike price. Then once you have read up and get a basic understanding of the greeks ect open a tasty account and throw a couple hundred bucks in it. This is the price you pay for the option.

Damn thats a lot. For this you must be a premium of x amount per share in order to obtain this right. They will have a special account for it. It seems overwhelming at first but its honestly not that hard. Whatever broker you use, call them and tell them you want to be able to trade options. No one really knows for sure, even if they tell you they do. This essentially means you are betting on apple to go up by this friday. Impossible to predict the future. For example, say I owned 100 shares of apple. It sounds confusing I know, Im explaining the best I can. So you must be a premium for this right to buy those Apple shares, whatever that premium is. Yeah bro I got full options approval on my Roth.

How do I get approved? Yeah in my Roth IRA I can do covered calls and I can buy regular calls and puts. Did you say you have super good knowledge of it? They called me asking what types of strategies I use and I said verticals and they approved it like instantly. Roth IRA and I was just denied for option trading. That got me forex approval, options lvl 3 and margin for tda. Why the hell does everyone have to lie to get approved for options, on TD I just had my profile to speculative and took a relatively not difficult test. As for my method I use finviz to do most of my research. It was around the time trump was releasing his budget. How long have you been trading?

Look at their products and pipeline, look at their past history. Let me know if you have any other questions and good luck! For example I am currently researching and learning about hemostasis. EDIT, NVDA, and DLPH. When it got near the support I bought options. What background do you have? My method is to look for industry that I think will outperform the market as a whole and then narrow it down to a company I can invest in. Hemostatic Patch in the works and want to know why it is better than other alternatives and how big of market is there for it. Read through there past conference calls and earnings. My favorite filters are Industry and Market cap. From that research I decide which one to invest in. Do you mind me asking what the haemostatic patch is? SEC, but luckily they were a small quantity.

Finviz has a great stock screener that lets you set filters for stocks. Good guessing or good accounting? My 2015 and 2016 options returns were more in line with WSB! Ill have to see. For example Delphi and Editas I have been watching for awhile and owned stock in both. Your background may help in understanding certain results from trials or how important the technology can be. Was tempted to hold longer but figured I better take my profits.

Mobileye gains I still consider it solid seeing how it was only over 5 months so far. CRISPR and decided to pull the trigger. It was for a risky play thats why I picked a Feb 18 call so I had plenty of time. It dropped on a scientific article that was flawed. These are my favorite because they fit into my trading method. So first I would sort by the industry I like then I will filter by market cap. Im a accountant at a big4 firm mostly do tax stuff for large corporations. Or do you believe you got lucky?

Does having a scientific background lend to trading in biotechnology? Well, you still have the stock, it could still go up in the future. If I wanted the option to buy AAPL at 100, to buy like a thousand shares, how much would that cost? Sure you know Basic method but how much would you be willing to risk? They are sometimes part of your salary or compensation for joining a company. Therefore, the option is worthless. The only way your options are worthless is if the stock goes below your option price.

Ted have the option to not buy the card? What is it worth? Are you selling it? As for the obligation. Buying one out of the money results in pure extrinsic value and zero intrinsic. There are two kinds: puts and calls. The option that you want for upside is called a call contract. NOTHING to do with your calculations. You could do a synthetic forward to by pass that but you better have cash on hand to buy the stock outright.

But it can be safer than buying a stock outright because it limits the amount of money you put at risk. This morning I was up 5x combined on all the positions. The time premium is typically an estimate to the riskiness of the stock. Is that the only upside to the seller? The market is super bearish, how do you protect yourself if you can only make money in one direction? This is a zero sum trade. You have the right idea but to make sure you have a full understanding let me clarify it for you. It only implies more risk. Wanna buy it from me? If not can someone please explain how it works?

They typically do this within at least a few days before the purchases might come due. It seems like the seller of the option has a high risk and low potential reward, while the buyer has low risk and a high potential reward. All I got is this one dollar bill. You own a stock but there is a rumor or event that may send the share price up or down. Ted and his brother agreed upon to trade the option contract. Since you already own the stock, you can buy put options and hedge yourself against the loss of money in the price of the shares. You can just sell your option and realize the same profit.

You can google an options calculator to estimate profit and decay. And then sell them? You will never actually lose money. So anything above 20. It is the biggest friend of option sellers. Ted is visiting Jimmy and notices a nice baseball card. If the buyer is right he makes a ton of money.

Options function the same as insurance. Edit: correction buy options one out of the money, sell calls one in the money. Risk of that happening determines the price of the bet. In return you get lots of upside potential. The stock goes to 20. The strike is the agreed upon price for the forward contract. The call option contract is per 100 shares. Think of options as a paperless contract.

Sell to Open put has the same risk profile. This is time decay. You might get lucky soon. Joe Shmoe who sold you that option. You would hold on to the options and hope that the stock goes back up. Dude, read the parent post. Okay but think of this.

Typically I do this because the payout on the lower ones is usually very large and the loss of money of the whole position is covered by the other two. So he could have even paid 50 cents for a 15 dollar call, then sold it to his brother for 4 bucks when the value hit 14 dollars and told him that the value is going up. With a call you are betting the stock price will go up, so out of the money would be above the current stock price. If you want to go long an option, the more optimal method is to go at least 1 in the money. Was the option still less risky? Or am I able to excersise the option and immediately sell the shares in the market so I just get the profit? If a stock is moving around a lot, it will typically have more time premium. Most brokerages let even inexperienced traders write covered calls.

The strike plus the premium is your break even price. Keeping the bets the same is an old gambling rule, I still broke it with a TSLA earnings this year and lost a substantial amount in one trade. Dont worry about puts for now because thats a whole different analogy. If the option is in the money, there is additional intrinsic value built into the price on top of time value. With a put you are betting the stock price will go down, so out of the money would be below the current stock price. So then why not just buy the shares? Options are wild and you should really read up on them. So if it goes up then you can buy it at the old price.

That just seems nuts to me. The value of options contracts are derived from both value of the underlying stock and the value of the contract itself almost as if it is a separate commodity. Whether the stock goes up or down a little afterwards is beside the point. This is an not difficult to understand analogy, but in the real world profit margins would be much smaller. There are calls and puts. Just hit me up whenever you get the money. Because buying a call option allow you to profit from the share price increase without having the capital to buy the share outright. Except in terms of ROI. He basically bought insurance against the price drop. Therefore, time decay is the biggest enemy of option buyers.

Depending on how close the strike price is and the expiration date, the option price is usually a fraction of that. But I have to buy the option itself. How does one figure out what? Also, any money you borrow to buy more positions than you have cash for, you pay interest on. Options expire: stock does not. Your broker will be contacting you about providing additional capital to cover the positions. Buying an option gives you the right, not the obligation to exercise it, be it a call or a put. Woah, I need this for my collection! Above is the put call parity which can be used to create synthetic positions depending on your holdings.

My most successful method revolves around ER. The simple answer is Volatility. Whole different ballgame than just yoloing tech earnings every quarter. If the underlying moves in your favor, you can of course sell to close and the premium you receive will include the leftover time value. Think of them as a leveraged derivative. NTNX for April for this reason. That sounds solid, may look into paper trading that strat a little to see what I can do. Then, I grab an office chair, park it in the middle and down some laxatives.

Then, I write a stock ticker in each circle, leaving a 2ft. If I come out on top I might keep a contract or two and play it through the report. So far have come out net positive. My expiry usually has to be at least 5 days after ER. While spinning, I open the floodgates. Then, I grab a giant poster board and draw circles. Of course you have greater intrinsic optionality with a long dated option. Still profitable between selling covered calls and verticals. PhDs in math and very complicated computers.

On top of that I would be glued on my ToS screen leading to no actual work being done for which I am paid for. TLDR: Youre going to lose money. Maybe someone who does it successfully can present there method. Show me one study, with actual stasticsl rigor, that shows ta improves performance. There are thousands of articles on TA. Dont sell options or youll lose a lot of money. Total noob to options.

Have you heard about IV percentile or rank? Do you think that algos and PhD fund managers move billions of shares per day on fundamentals and news wires? TA and you never mentioned a thing. YOLO it all into a speculative play and lose it all. And you stand to lose the whole amount if you picked the direction wrong. Nor to replace your lack of experience in the realm of trading. My mistake re: IV rank, I thought you were just talking about plain IV, not relative IV. High priced stock was just an example. You would have to look at each stocks options chain to figure out liquidity. Your money would be better used in a new position.

What disconcerted you about running parallel to the algorithms? Or is it that you are literally short selling an option, and because they are leveraged it can drop very fast? You are correct but that is a lot to lose if you are talking about high priced stocks like amzn or indexes like spy. Look up confirmation bias. Rolling a spread could mean a lot of things but simply it means closing the existing position and opening a similar one for next expiration. If you have some real evidence for TA, I would genuinely love to read it. What are you basing this on? Then realized I was always losing money. Doing more learning before I do anything.

The best thing to do is immerse yourself in what you are trying to do and make up your own mind. TA was, I asked for evidence that it actually was valid. If you fuck up you just let the options expire. Isnt the risk always established up front as the premium? Recommend working on risk management as well. There are thousands of articles on palm reading too.

But ordering near the bid helps reduce the risk of the spread. The problem is that I cant find a single one that actually uses any sort of mathematical rigor. Otherwise you are going to be following the advise of strangers who dont know what they are talking about. My red days were earnings plays based off of fundamentals. You see what you want to see. With spreads you are basically reducing the risk by selling an option against buying a cheaper one. Tape went up from there on a dead cat bounce, then came back down. Thats all I want. And instead of reading all my past posts like a fucking wierdo, why dont you just post some evidence for TA. The only thing that consistently predicts short term trends are technical data points.

This TA was seen by pro traders; shorts were closed, longs were opened and in a matter of only days, SPX rallied over 110 points. Sorry, after seeing you rant cluelessly about TA on here for the 2nd time in one day, I got curious what kind of dense motherfucker about your credentials. Even if I was asking what it was yesterday, you still havent provided anything to prove yourself right. For myself, Double and Triple tops and bottoms, Fib Retracements, or simply noting key pivot points on stocks I follow daily and realizing patterns repeat. You have to ask yourself whether you still believe in the position or not. The way to figure out 1sd strike is to add the ATM put and call price. Which maturities do you favor? Just going off of news or what?

Dont get into it. TSLA when I started and knew very little but it worked out. You went through my post history? TA you think is bullshit. With that said, TA can mean 1001 different things. But my delights are very close to being in the money. Technical analysis is total bullshit and anyone who tells you differently is an idiot.

So you are reducing the money you pay, reduce the risk but reduce the reward at the same time. And your reading comprehension sucks dick. Volatility will help you decide method. The different strategies people use are meant to increase their chances of coming out ahead. If you do then you roll the spread out. In the market, for every winner there is a loser. If you had a reasonable point to make, you would be making it. However, as suggested above, options do not add any value to a stock. Sure, Jimmy left some money on the table, but they both won on the trades. Ah alright, I had considered such a scenario but in my mind Jimmy would be considered a loser in that second trade.

Stock price is not generating money in the market, though. The way I see it, missed gains are equivalent to losses. The market is not a sum zero game. Where did the money from the merger come from? See how it works? Where did the money come from? If the company goes up, Bill wins too, if it goes down, he loses.

Lets say Jimmy buys stock in Super Lube Inc. All you need to know is that there is no cap on stock prices and any company could continue to grow forever. Thin Skin Condoms Co. If anything we should be happy and encourage this type of behavior. You could buy a call option for direction and leverage, and win. Hey now, if people like him didnt exist then we wouldnt be able to make money. Someone is winning and someone is losing. The premium goes to the person who writes the option, and is their maximum profit and the purchasers maximum loss of money. You need to see it in a larger picture to understand.

He can only lose money if the stock drops. If you wanted to show how the market is not a zero sum game, you would have to introduce dividends or fees or some other external factor. ANAL, so if Jimmy sold, and Susan sold can their money came from somewhere. The whole point of the stock market is to create wealth. The profits generated by investors on both the long and short side regulate the flow of capital efficiently, ensuring that strong companies get capital to invest productively. Now, this not a very sophisticated view and I can see a lot of problems arising when you try to to assign winners and losers based on what happens to a stock in the future. Only loser in this case is the nature.

Consider volatility skews before purchasing OTM options. Are you just saying look to grab options atm or slightly otm with a delta as close to one as possible? No memes, advertising or spam. Calculate Daily IV and breakeven for multiple strike prices. In simple terms, it is the true acerage price of a stock. Shit like this is great as I work my way through the sidebar links. Put option: The right to sell 100 shares of a company at a certain price. Charts communicate the market sentiment.

Confirm your sentiment with market internals. It is the average price of a stock weighted against its trading volume within a particular time frame. Spreads carry limited risk. No politics, nsfw material or low quality posts. The technical analysis reading material is giving me a 404 error not found. Open a put on third red candle with 5 minute time stop. This is immensely helpful. Try not to buy options with less than 30 delta.

Watch out for price action as it is approaching the VWAP. Just because delta gets closer to one the further in the money you are and the closer to expiration. Trends, Support and resistance, breakout, breakdown, price volume relationship. IV: Implied Volatility is a metric in determining how much the stock is expected to move before the expiration date of a stock. Delta: the price appreciation the option experiences for every one point move in the underlying. Look for a red candle with long upper shadow and two more red candles. You must create your OWN method. Options are an instrument that sets a contract to buy stock at a certain price at a certain date.

Day trading: Technicals are most important on intraday trading. It lays out everything and its a must read. Theta: Measurement of time decay. It has less time to move. Is Technical Analysis of the Financial Markets the title? Discussion and Live trading on Stocks, Options, Futures, Currencies and Commodities. Gamma: Measure of the rate of change of its delta.

An option is more expensive when IV is high. Call option: The right to buy 100 shares of a company at a certain price. Are all 30 stocks from Dow coresponding with rest of the market? Time decay: Decay of the price when option gets closer to expiration date. Scalp trading: Trading with strict exit method and taking profits on small price changes. Without them its mainly cognitive biases. Bearish when price is below the VWAP, Bullish when price is above the VWAP.

Analyze price trends to understand market sentiment. Combine Technicals with news and events. Options with same underlying and same expiring but different strike prices trade at different IV. Flairs are to help individualize yourself. OTM options are cheaper to buy, but you need a bigger movement to profit from them. This is actually one of my favorite methods to trade but I almost never get the timing right. All the other links look like they are working. Please keep them respectful. It shows market bias for pricing in volatility to the option premium.

Investopedia has your back. Shortly after, the won was devalued to almost half of its value, as part of the East Asian financial crisis. It was just a meme back then, but big enough that people actually exchanges bitcoins for them. WSB for the jackassery. GFC just by investing in a few banks here in Australia. My 415K Dogecoin wait for its day in the sun, though it seems less and less likely with every day of inflation. Yeah, we should make it not difficult for people to be able to join in! Crypto might be a good bet, but its a currency with no physical or political backbone. But you need to physically own the commodity first.

Did some Wikipedia research. Also, what is it actually called? If everyone in the world suddenly decided Doge was worthless, Doge would have nothing to prove otherwise. Obviously got overly excited and wasted most of that buying calls on anything with earnings. Yeah, when it was new I mined dogecoins, exchanged them for bitcoins, sold the bitcoins and bought a new graphics card. And we just had OUR big one.

The won was finally allowed to float on December 24, 1997, when an agreement was signed with the International Monetary Fund. Decided the responsible thing to do was sell and put my initial capital into savings and day trade with the profit. On February 27, 1980, efforts were initiated to lead to a floating exchange rate. Depending in your card ethereum could still net you a couple bucks a day right now. So he feels that he is better off sitting on his money in a savings account earning next to nothing and buying into the market again when it crashes. Crypto should skyrocket in a crash though, right?

On the other hand, if I had held mine for a week I could have flipped for 4x as many bitcoins. Fuck off back to investing or robinhood. You have to be a very insecure, sad person if a simple spelling triggered you like this. Paper trading blows for options. In the real world liquidity is king for options. His bet is that crypto is going to skyrocket and the market is going to crash and burn. Depending on when he pulled out of his stocks, it might have been a good move tbh. First you have to grow some corn, then you sell some options on it. Thankfully I escaped it a couple weeks later but would not do again. You are probably the textbook definition of a gambler.

First of all, I do the same thing. After all was said and done, I actually made a lot of money trading and came out ahead, if money is the only measure. And on the trades where you lost big, how much time was left on those calls when the underlying went against you? However there is always the risk of the wipeout when unexpected things happen. Do I keep at it and try and rebuild knowing full well that I still need to make drastic changes to prevent the same thing happening? Set profit margins ahead of time for when you start pulling money out. If you enjoy it, do it. If that trade went well, it would have gone to 6 figs. Anybody can win big if they assume enough risk, but they can also lose big, like you have, twice. Hahaha, I actually do my own taxes.

OUT OF YOUR ACCOUNT and put it away. Like all gambling, the deal here is to quit when you are ahead. My wife works as an attorney so combined we do pretty well. When I told her how much I had made, she knew that it could also disappear just as fast. So I can see which companies are attractive to you and understand your game a bit better. PM, would love to talk more about this stuff. Now I just sell credit spreads on indexes, comparatively safe but lower returns.

Pacer between the various law firms, the great debates on ST and ProBoards, etc. AMD was on a tear at that point. How much time was left on those calls when you sold them? Oh well, you live and learn. DM me if you want. Consider your trading losses to be tuition in the school of investing. My accuracy rate in determining direction and range is fairly high, and I can create a trading account out of 50 bucks and a discount broker. Maybe I just got really lucky. It was foolish of me to not have purchased a decent amount of puts anytime I was riding one of my longer contracts through earnings.

You have a great relationship! Or you can keep your ego and switch over to a place that will tell you what you want to hear. The last sentnece on your comment brings back some painful memories. All I see here is people telling you that you are gambling. So, make 20k remove 15k and put it into safer investments. Everyone has losers, you just need to make those losers small as possible. SO doesnt mind I think you are supposed to pick yourself up, dust yourself off, and throw yourself right back down again. You have to want to win more than you want to play.

Consider this a cheap lesson. Not even spreads or anything more fancy. The worst trades that I have made to date were trying to call a bottom in oil. It takes a ton of skill to get on the positive side of the sum. The larger the stakes, the more thrill, but also more consequences. We own our house and still have 25 years left on the mortgage. If you want to bet on sports, go to Las Vegas and at least get free drinks and stuff out of it. Do you keep at it? Good option writing should help take the gamble out of the stock market. It teaches options starting with the safest, easiest to understand option trades.

Unless you are able to devote all your time to this, you are really just gambling. Psychology, what a killer. The key thing for me that I learned, is to have proper risk management. Why would you risk wiping out when you have shown that you can consistently build your wealth with good trades? Want to quit your job and turn your life around? You should be asking me how I failed twice! Both times if you had banked your winnings when you had a 5x return and then gone back to playing with your initial investment you would be hugely ahead. Please provide more details on the trades where you lost everything. Even so I should have had downside protection at the minimum four times a year.

The biggest toll I paid with all of this was psychological. In terms of stocks, I look for a lot of the same. You are clearly gambling to win that much and lose that much. After a while I got fancy and started shorting. No one I know is interested in any of this. Try being less aggressive by buying options that are a good amount in the money or just buying shares on margin. USDCHF are fairly cheaply priced now as well, according to bloomberg, so that one is on my potentials as well.

When I want to mitigate risk I just trade a smaller portion of my account and make sure I have gtfo criteria for when the underlying is not doing what I thought. Did you put or call, what sectors did you trade in? Gambling is fine and fun, just be responsible. In order to make such meteoric rises I was taking on some fairly large risk relative to buy and wait method. The easiest thing to do is to make some money then take it out and put it somewhere safe. What was the method based on? No one gets 10x return consistently. In fact, the majority of that came from rolling AMD call options forward at higher and higher slightly OOtM strikes. The last 30 days on options are quite vulnerable.

Getting lucky and striking big a few times, but losing it all after continuously repeating that same process is textbook gambling and borderline gambling addiction. If you manage to lose everything once more, I would move on. Couple of nice vacations, but not the end of the world for you by the sounds of it. You have a gambling problem and by trying to justify it, you are just digging your hold deeper. If you stop increasing your bankroll it sounds great. Celebrated when they won the trial, but nearly had a heart attack when the floor fell out. That feature is limiting and controlling risk. My student loan is just over 100k so you can imagine my elation.

Just learn the secrets from THE GRINDER! The formatting is kinda poor, and the dude seriously probably would benefit from a good editor. And also not selling all of my BAC contracts for massive gains before Dec 31st. Now the most i do is covered calls. Honestly, it sounds that one of the reasons why you were able to make so much is that you were willing to take huge risks, even if they were calculated ones, because you thought it was funny money. Go read anything by anyone that has made millions in the market.

Sometimes the best trade is a small loss of money. The whole system is a racket set up to take our money away from us one way or another, so the best bet is to take a more conservative approach instead of trying to get rich quick. But never to offset an investing method. Feel free to pm me if you have any specific questions. You know the pain then my brother! Cut your losers quick and the winners let run will make up for the small losers. OP for sharing this story, as it may teach others how your own results affect your behaviour, and why you should never dismiss crash risk. Assuming he can afford to lose the grand in the first place of course.

So I was paying attention to vega the most and underlying implied volatility. Whenever you win, cash out, bump your bankroll slightly and start again. The growth rate is still pretty damn high, and you will never wipe out unless you are trading really small companies. Options traders are supposed to calculate Theta, Delta, and the various other Greeks to ensure that their money makes responsible gains. The market can remain irrational longer than you can remain solvent, I know now how much this is true. This this this this this.

It seems like you were taking too much risk and had too much of your capital exposed at once, in other words you got greedy. Did you diversify your option bets? If you feel otherwise, read Fooled By Randomness. It sounds like this guy has issues with the fundamentals of options, and is using options to gamble instead of to safely hedge his portfolio. There is ALWAYS another trade around the corner. Well, that works well enough for me. You have a great job! You, too, can turn pennies to millions gambling with OPTIONS!

What are the two best things about gambling? Turns out I could have kept squeezing but oh well. You have a house! To contrast, now I do occasional trades on the stock market, I max out my 401K for work, and have been putting more money into my personal finances to keep my debt down and be able to pay for my house faster. But my commonsense tells me that once I hit milestone like 100k, I would keep aside 50k and keep trading with the remaining 50k. The problem here is bank roll management. The article got the attention it did because of who the author is. Nonetheless, the information is solid and presented logically. As a result, I prefer to spend my hobby money on other things. You may lose it ALL, including the money.

Have you read the market wizards books? It seemed like a scam and I sold it once it started going south but it was nice while it lasted and even though I sold the stocks technically at a few dollars loss of money, those dividends more than made up for it. At least spread yourself off next time. So I actually wrote you a response on my phone and sent it, apparently that never went through considering it was about a week ago. Whatever your percents with stocks, eventually you will be making ridiculous money without the wipeout risk. Buy a proportionate amount of calls and puts on riskier trades. What was your avg holding time on your big winners? How much do you want? The only way I would be able to consistently make money with options is to be able to write them, and charge a commission for doing so. Jesus christ with returns like that id would have walked away and took a vaca for a month and forgot about the world. Unlike stocks, options settle at the end of the day.

Never bet more than you can afford to lose. Some of my contracts that I lost huge on were for Jan 2016, so I figured even if earnings is bad I can recover. Think of what you could have done if you just cashed out and then diversified. So you essentially made approx 335k while trading and instead of paying down your mortgage you were addicted to the thrill of the risk vs reward of options trading. YOU, can know how! Lastly in relation to the main story, always spread your wins to make it harder for the market to take them back off you. It sounds like you are good at a lot of things!

If not why not? You have 25yrs left on a lien against it. Just to be clear, you are completely gambling with options. You kept gambling it tall. Did you ever strongly consider taking the gains and leave it at that? Anybody can be good at options trading if they assume enough risk, which you have. The Rookie Guide to Options, 2nd edition. Also anyone have a resource on how to perform these kinds of option trades, and options in general? So let me give you some background. If you are capable of trading thousands of dollars or more on options you must be using spreads and writing options!

You apply the irrationality of the market to your losses but not to your gains. Once you have a decent size of disposable cash to play with, fucking go all out. Let me know if you have specific questions. Write an investment plan that includes you moving certain amounts of your winnings into savings and allocating percentages you feel comfortable with towards certain options ONLY if they meet the criteria that you held when you first started. What are your go to resources for researching companies? The stock has since dropped like a rock again; I check it once in a while and I can feel some anxiety if I imagine I am still stuck.

Also takes me out of the daily grind of always needing to know where the market is heading. They all despise debt. What was the process for selection of a company to trade options in? That was in June 2012 and she opted to let me takeover all of it since she was tired of sleepless nights worrying. Even though we are just the same financially it hurt my ego maybe even the worst. Their value went up incrementally over the next few months and I ended up with more than I started with, but nothing to get excited about. Do you not call that getting extremely lucky? The asset itself is being used to make money.

Look at it another way. If your system always ends up losing it all, stay away from options and invest in the underlying. You are seriously gambling. What I was doing came with a high degree and I know it, so does my wife. Whatever your trading strats you should always work out the max you can lose from a position. Has anyone else gone through something similar?

Please ask me questions. Options are a suckers game. Actually most of them do not have min requirements for cash accounts. The Moral: NO ONE has a damn clue where the market is going. So that my losses are minimum. Gotta be willing to risk losing a little to profit a lot. Expert financial advisors hate him! Protect yourself, from yourself. Instead of paying your debt you pushed the limit and went all in. Hedge Fund Market Wizards.

It sounds like you really do have an edge but your money management sucks. Obviously if I had downside protection I would have done better. Did you move the market on the last couple trades? So you can trade once daily. Its one thing to use options to hedge a risk, but this guy sounds like the textbook gambler. Oil is bound to make a rebound at some point, but the market is still quite volatile in those terms so I would assume various options plays are still fairly expensive at this point.

So surreal, I feel like you just described me. Seems you know half of what you are doing though which is picking good options. You seem to have pretty good instincts if you did that twice in two years. Are you just buying puts and calls, or naked selling them? Slowly trying to get back into it now, but yeah. But do not risk your future for a quick buck. Be happy at 5x and take it. KNOW WHAT PEOPLE ARE GOING TO DO! Full disclosure: I dabble, and am no where near that level of skill.

Not good for expiration day trading. In the end, the company had one day, less than 24 hours, when the price rocketed based on rumors. You could continue to trade like you do but by putting some aside for long term investments you could reduce your risk of blowing everything again. After ups and downs for a bit, she wanted to pull out everything and stop. The tool itself is not intrinsically gambling, how you use it is. The part you are failing at is financial management. Example I loaded up with calls a couple months before AAPL did the stock split because the companies fundamentals were very cheap, and so were the contracts. Fuck man, of course you should. If I were you, I would read up on risk management.

You guessed right on AAPL and AMD and got totally lucky. Here is my problem with what you have done so far though. Options and commodities are dominated by some very highly skilled people, and they love to see people like you. From a beginner perspective. Oh, god, that is me. But the downside of that is that eventually the risks hit you hard. My successful trades were all low iv at the time, and were roughly three to four months out. It sounds to me, though, that you do have a skill that can make you money but your emotions get the best of you once you reach a certain capacity. Man i live for those moments, instead of wasting my money at the craps tables ive discovered options lol.

If not, how were you diversified? Wall Street supplied technical analysis and complex options trades. Options trading is not what makes it gambling. It sounds like you were risking all or most of your capital on each bet. The biggest problem with options is that you have to be able to find someone who you believe is dumb enough to buy something that is going to stay flat or lose value, while at the same time beating the clock. Learnt my lesson about gambling though. Im just starting out if you have any pointers, hoping to just increase buying power for small companies with few contracts.

Does any retirement scenario allow it?