How to profit from trading options? Someone School me!

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One way that has been working for me is to concentrate on low IV stocks like Microsoft. Rather than chasing memes. Buy month out and slightly OTM. Also during earnings season I look at companies reporting next week, buy and sell before ERs

likefunny

Thank you for your answer! I appreciate it

But high, sell low

likefunny

Well, they call it “options” because the market decides whether you profit or lose money

But in all seriousness, options are more lucrative than stocks and dangerous at the same time.

You buy a call if you think the stock will go up, a put if you think the stock will go down

You can also sell options, sell a call if you think the stock will go down, sell a put if you think the stock will go up.

Benefits of buying options
Generally less money needed to pay for contracts, especially compared to selling options

You can make money if you can time your entries right on quick price action movements

Cons of buying options
Time decay, the closer you get to expiration, the less valuable your contract. You can still be at a loss even if the stock price passed your strike price because time decay diminished the value so much at that point

Pros of selling options

Time decay is on your side, you money if the stock goes up (sell put) or goes down (sell call) and if the market is trading sideways.

Generally good as a passive income approach to trading options

Cons of selling options

Generally require more upfront capital than buying options (margin may come into play on this)

You can get assigned shares, meaning you could be forced to own 100 shares for every contract you own, so it you’re selling a put, make sure it’s on a stock you wouldn’t mind owning shares on anyways

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I started making money when I stoped playing so much in weekly options. I now sale those out of the money extreme plays to you in covered calls

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1. Find flavor of the week pump n dump
2. Go all in
3. ????
4. Profit

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Number 3 is key 🔑

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Flip premiums

likesmart

Sell expensive options, and buy cheap options. 🤷🏻‍♀️

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Step 1: buy call options on literally anything.
Step 2: wait (24 hours usually does the trick).

Its so easy, any 8 year old on TikTok can do it.

I'm kidding, but the sadly the above works out more often than not in this market.

There are lots of great resources out there and in this bowl. Figure out an approach and srick to a gameplan. Set profit targets, scale in and out of positions, know when to cut losers, etc. You can be profitable by being lucky, but you have a better chance of staying profitable being disciplined.

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The wheel. Sell CSPs then CCs on underlying. Repeat. Regular, fairly safe returns.

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Use the search option

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Only buy options deep in the money. These move when the stock move and don’t have much premium factored in. Delta >95. Much less risk for playing high priced stocks with less capital

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Credit spreads all day...

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Optionpricecalculator.com is extremely helpful for me when evaluating options and potential gain or loss over time

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Know how many people in finance made their wealth from trading options in the past 50+ years? 1. Maybe 2 if you count PTJ.

But you’re different, right?

It’s a good supplement to stocks.

Learn to trade the underlying first.

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