Hi
Hope all of you are fine. I did not do a weekly option lesson last week, so lets do one this weekend. This time lets jump into one of the threads of dear Columbus. Here we go:
http://www.traderji.com/options/66083-put-call-options-120.html#post966278
http://www.traderji.com/options/66083-put-call-options-120.html#post966280
http://www.traderji.com/options/66083-put-call-options-120.html#post966284
To understand the above posts, you need to have a certain understanding of how option strategies are played on bigger time frames.
Now proven facts with the above posts:
- Buying options is not a loosing game.
- We easily can use bigger time frames, as theta is on our favor if done it that way.
- Option can be used as investment.
- Long term options are incredible to use for any option strategy known by each individual option trader.
- No need to gamble on short time frames with options.
If we look at the price when bought and at the current value of the Dec 7900 call, I guess many did not even manage that profit with there short time option trading gambling, but think that spending 90 Rs is to much for any option.
So an other prove: Cheap options are not always cheap options, as if you lose them in a constant row, the more expensive option with the longer time frame is a better choice if you know how to handle them. The same counts many times to shares, as many think that cheap shares are the once with the lowest risk, but that is a wrong thought.
Those options from those company where bought with an average of around 90 Rs from 5 - 7. May 2014 and are now at 570 Rs on 7. Nov 2014. If you buy a bunch of such options ............... you can buy a bunch of pair of shoos for your wife and a bit more in the mean time. And this (such option trades), even we as retailers, can do at any time with not too much money.
Have a nice weekend and good trading / Dan
By the way: I probably will open a thread in the members section with the weekly option trading lessons, as I think in this thread those posts of mine get lost. So take this as the last post in this thread from my side because of the mentioned reasons.