Saturday, September 12th, 2015

Opinion for an option trading strategy…?

One strategy that I think is: 1. Sell in dinero.2. “Use” money from the sale and purchase of depth dinero.De fact, is called “call back propagation? N”. The idea is this: When you sell on the money and buy a contract or 10 deep OTM contracts. . . then a slight movement up har? great beneficio.Veo some problems here? however: 1. Impl volatility? Appointment. It is no secret that the options have m? S money IV. But is it really a problem here? 2. Time? Optimal exercise. You should close all positions before experition. . . and you will see? m tempted to argue? s and m? s.3. Commissions. The commissions are a big problem here?. I suppose direct trade or trade CBOE through? S interactive brokers can offer better resultados.B? Basically, if you calculate this strategy through? S of black-Scholes price is right – the potential gains in turn to be a surprise. Like. . . 50% per month:). But once m? S. . . these are the problems listed above, or 10 times and happy New.

Comments

3 Responses to “Opinion for an option trading strategy…?”
  1. Spock (rhp) says:

    you’ve also omitted slippage and the spread from your calculations — i suggest that when you do so, it’s going to be difficult for a small trader to make money.

    you also need to maintain cash equity in your account [because you sold the at the money call] and you haven’t figured the return including the required equity, afaik.

  2. Common Sense says:

    The profits you’re talking about are possible… some months. But reading your question… I’d say you’re three to five years or more away from having that skill.

    Interactive Brokers is the cheapest way. ThinkOrSwim is the best way (great option tools).

  3. Jim Z says:

    Options trading is very difficult, very risky. 7 out of ten options traders lose money. Risk is directly related to reward. Make sure you know the stock you are buying or selling options on. Know it like the back of your hand. Before you trade options, make sure you have a keen understanding and winning track record in stocks. If you win good in stocks, then dabble in options. It is fun, but very risky.

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