Friday, March 10th, 2017

What Are The Best Option Trading Strategies For Trading Options In The Stock Market?

I have heard of many different trading strategies stock option and would like to know which are the best ones to use. If you have had experience with any, please share your results in general.

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6 Responses to “What Are The Best Option Trading Strategies For Trading Options In The Stock Market?”
  1. The CPA Guy says:

    I can’t speak from my own experience, because I don’t trade options. However, several years ago, I had a bunch of clients start to do option trading because they all listened to one of the guys (also my client) who claimed he made millions of dollars trading options.

    There were 17 of them – I did all of their taxes, and they all started following a guy named Tony because Tony had a “surefire” method to make money trading options. Each and every one of them lost big. One of the guys lost $278,000. They didn’t understand why because Tony had told them how he made a fortune and drove a $90,000 Mercedes (it was leased). Turns out that when I did Tony’s taxes, he was lying to all of them. He was losing a ton of money in option trading, but he was telling all of his co-workers how successful he was. Unfortunately, because my client information is confidential, I couldn’t tell anyone the truth about Tony. I urged Tony to come clean about his losses, but all he told me was, “They’re adults – they can figure it out on their own.”

    Tony left his job and left the state, and the last I heard, he was hiding because he owed tens of thousands of dollars to his bookie.

    Option trading is for suckers, especially if you are an unaffiliated individual. Don’t do it.

    Here’s what Motley Fools says about trading options: “Basically, options offer the potential for big percentage gains AND 100+% losses on your money (you can lose the total premium plus the commission). They can be seductively appealing because they present the possibility to make “the big score.” Unfortunately, the reality is that a whopping 80% of options traders lose their money. And, while technically not considered “gambling,” the everyday Fool doesn’t stand a chance. Here’s why. . .

    The most daunting reason not to play with these beastly creatures is the simple statistic—80% of all players lose. Period. No arguments. No contests. Now, there is always one enterprising young Fool in every crowd who intends to be part of the special “20%” who actually make any money”

  2. James says:

    There is no such thing as a “Best Options Trading Strategy”.

    All options trading strategies profit only when specific conditions are met and as the range of profitability increases, the profit potential decreases ultimately to the point of zero.

    For instance, a long call strategy only profits when the stock goes up and a long straddle profits when the stock goes BOTH up OR down. The long straddle obviously has more means of profit than a long call but its drawback is higher expenses and a much much bigger breakeven point.

    See the point?

    Options trading is fair play and every advantage granted by a specific strategy is balanced by some kind of disadvantage. Review a full list of options strategies as well as their advantages and disadvantages in the link below.

  3. brettbogo says:

    Their is no best way as that is an individual choice and based on each person’s unique personality. I have traded stock options for close to 10 years and can say I have done best when I swing trade. I follow the trend of the stock and will buy on short term weakness if buying calls. When buying puts I buy the option when the stock is starting to rally a bit. I find many times the stock will continue its longer term trend and I will be rewarded if patient. I have been pretty successful trading that way when I use proper money management and do not stray from that strategy.

    If you would like more information on what I look for you can follow what and how I trade on my blog at the site below:

    I have been unsuccessful when trading on a very short term basis or when I attempt to do straddles and strangles. For me simplicity and patience have been successful. When I trade to often or try complex strategies I normally get burned. My suggestion to you is to find a simple strategy that has proven successful in the past and with proper money management you will stand a great chance of being profitable.

  4. Trader Joe says:

    To be successful at trading options in the stock market, you’ll need practice. The best way to get practice is through paper trading, that’s where you follow a stock and pretend you are actually putting trades in and then taking them out, hopefully for a profit.

    You can also find books on the subject, like on amazon or barnes and noble. You’ll need a good foundation on the basics. There are also different strategies when it comes to trading options so you’ll need to learn those first as well.

    For more advanced ways on how to trade options, there are sites that offer guidance. The advantage with these sites is that they will take you beyond the basics and offer you a better chance at higher returns on your trades.

    I’ve listed some sites below that you can check out, they are for information purposes only and not a recommendation. However, you will learn a little more than what you can get from reading books.

    I think if you start your learning this way, you will be able to succeed in trading options. Others have done it so there’s no reason why you can’t learn how to do it too.

    Hope that helps and good luck!

  5. Keep up the good work brotha!


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