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Anyone ever retire at 23 before?
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Bowl Leader
Additional Posts in Option Traders & Investing
Visual Storyteller
Closing red tomorrow?
Subject Expert
Anybody buying today?
Thoughts on Square’s acquisition of Tidal?
Subject Expert
Enthusiast
7/31 Thread (General):
Mentor
Sell or hold BABA?
Subject Expert
Wish I had FB calls. Geezzzzzzzzz
Doge Coin about to POP!
Mentor
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Three tax guys talking options strategy... hmm.
Seriously, there are lots of resources out there to help educate yourself. To do options right it gets a little technical (but you don’t always have to get deep into the math).
I would spend some time working through videos on Options Alpha, Project Options, of Tasty Trade before lighting your money on fire.
Enthusiast
^ this isn't true. There are several cheap stocks where call option prices are $1 or less. Sure you won't be able to find something on AAPL or SPY that cheap unless you go way OTM but some SNAP trades are still around that range.
AT&T also has call options that can be pretty cheap.
OP - look for stocks that are less than $20 and have low volatility. Not as many stocks out there that meet this criteria, but that's where you can find near the money options that are about $1.
Not many options are priced at $1 (x100) unless they are very risky and low success rate. I would try paper trading first to make sure you get the hang of it. With $100 it’s more likely just 1 gamble
Also, just an opinion, but to start out with wayyy OTM is not really a bad strategy
Options are not a game. Learn how they are priced and learn to manage risk.
Visual Storyteller
1. Start with a little above $100...maybe increase it to $150-$200.
2. You can either play weekly lotto (same week expiry) but this is very risky but high reward or you can play deep OTM longer expiry (think of $BA late August calls, around $200 strike call)
3. At least in the beginning, don’t buy puts. There are plenty of stocks you can rinse and repeat with calls than managing puts
Btw, I also only have a little bit of experience, and BC and STA1 are great resource, so listen to them!
No one exercises options lol 😂
M1, no need to belittle someone trying to genuinely learn and seeking help. There are other ways to say what you want to say that is actually helpful and constructive.
Also, your statement is categorically false. People do exercise options, including those who trade options to augment their long/short portfolios
OP - take a looking writing covered calls/puts if you are looking to learn. It’s another way to approach options by ‘playing the odds of the and house’ can be a nice way to add income to your portfolio for holding on to (or shorting) stocks
Not true that few options are at $1. It really just links with stock price. You can’t find cheap calls on SPY or many big tech companies, but traditional industries for sure. Banking, auto, some consumer staples are all pretty cheap. My first put option was like a WFC for $90 and made $25. Just to get the feel of it. Also if you really see it as a game...try htz(I’m not giving serious investment advice obviously, just saying there are cheap options like that). Just make sure you start with something with a decent trade volume so you can trade it when you want.
Learn the basics, the Greeks (mainly delta and theta to start), IV along with historical IV. Learn how to statistically position your trade less on speculation and more on statistics. How to calculate premiums, how IV relates to expected price range at expiration. Watch bid/ask spreads and look for stocks with high volume/interest so you don't get stuck holding.
Learn what rolling up/down/out means and how to take gains or reposition. And definitely use a trading platform catered to options trading. Yes, trading options is easy on RH, but you are missing a lot of useful information.
Don't buy because of FOMO after you watch a stock skyrocket. Look what Kodak did over the last week and what ADT will likely due tomorrow at open. If you are going to buy way out of the money options as someone suggested, be prepared to take plenty of losses before landing anything substantial. Yes, it's fun, but so is roulette lol.
If you're interested, I can share some of my basic strategies on scanning options.