Options trading any thoughts

[crazy canuck]

First, you should learn to beat the futures or stock market, then you can try options.

[Paluka]

[ QUOTE ]
First, you should learn to beat the futures or stock market, then you can try options.

[/ QUOTE ]

The skills needed for beating these things are almost completely unrelated.

[arod15]

[ QUOTE ]
You guys are only going to do yourselves a disservice by constantly comparing options trading to poker. When you are an options market maker, trading has some similarities to poker that you might want to keep in mind. From a customer point of view I don't think there is any such analogy that is going to do you any good.

[/ QUOTE ]
we tend to compare everything to poker like when i went all in on my girlfriend last night. Poker just on the mind all day... But point taken

[StickyWicket]

"write options...options writers make money."

This is quite possibly-no offense-the worst response I've ever heard in reply to an options question. I can only liken it to "Aces win every hand." Ay-yay-yay!

I remember when I learned the basics of options back when I took my series 7 exam...hated the bastards at first, but then they clicked. Still love 'em to this day. Is it an appropriate strategy for investors? Depends upon your risk tolerance, as there are conservative options strategies and more aggressive ones. As a registered financial advisor, I have to take into account what my client's goals, net worth, experience, risk tolerance, and understanding of a wide variety of financial issues are---and I simply cannot recommend whether or not the original poster should get into options trading, as I don't have that basic information.

As the posters on this forum rely (perhaps wrongly so) on the other posters to provide them with advice, take a look at the following chart that provides you with a basic understanding of BASIC options strategies and what they are used for and what the max gain/max loss is on each type of position.

Some definitions:

Strike price:
The stated price per share for which underlying stock may be purchased (in the case of a call) or sold (in the case of a put) by the option holder upon exercise of the option contract.

Premium:
The price you will pay per option contract. (i.e.: if you buy 1 options contract for stock ABC @ $5, then $5 is the PREMIUM)

options chart

flame away at will...

Sticky [img]/images/graemlins/heart.gif[/img]

***please note that none of the information in this post construes investment advice, just some basic information and definitions on options*** [img]/images/graemlins/cool.gif[/img]

[1800GAMBLER]

You should mentor us all [img]/images/graemlins/frown.gif[/img].

I think reading this forum, all the disagreements and all the confusion has put me off learning anymore about investing. I was going to just invest in index funds and be down with it but then i felt stupid when you said in a post 'what makes you think the market will continue to increase?' and since i couldn't even answer that i didn't invest. So now, i'm still lost.

actually funds that write options are the most consistent in the industry on a month basis. i can think of at least 5-6(remember there are not many that do this) that do 20%+ yoy with only 1 monthly drawdown a yr.

here's one
http://www.iasg.com/SnapshotPT.asp?ID=753

what a nice equity curve

[Paluka]

[ QUOTE ]
You should mentor us all [img]/images/graemlins/frown.gif[/img].



[/ QUOTE ]

I don't really invest at all outside work.