TCS view Traderji Members
- Thread starter Wishmaster
- Start date
ST hate rajbhai....I hate option.....I just proved ......If you are right you can't earn money if you are 100% right...... dot dot signal of rajbhai..... bdw you sad rajbhai dnt have account ? He never posting chart? Is it compulsory Joker Sir? 
@Wishmaster
Mistakes are made to learn from them and improve and not to say: Option trading will not work. Edison once told after his 100 failure: Until today I have not found out how to do it once the right way, but I have found out 100 ways how to do it the wrong way. And at the end he succeeded as he not has given up. I will post some articles which do spot on topics which are connected to the trade you showed here.
Playing Company Announcements
Catching a big price move is an option buyer's dream from the time that we first learn about options and how they can be used to speculate. The combination of limited risk and unlimited potential was – and still is for many – the main attraction of using options.
I have devoted a significant amount of time over the years to researching company announcements – how to anticipate them and how to profit from the sudden stock price moves that sometimes follow them. I have been interested in earnings announcements, FDA announcements, any kind of announcement that could move the stock. The bigger the potential move, the better.
The strategy of choice in these kinds of plays is simply to buy options – either just calls, just puts, or both. Nothing more complicated than that. If I want to cash in on a big move, there is no point in using a strategy that limits my returns. However, since there is a possibility of losing the whole investment, only a small amount should be invested in any one trade. I have mainly used OTM options because of the greater leverage. As a result, when the trade does not work out the whole investment is usually lost.
Naturally, options are more expensive when everyone knows that an important announcement is coming. Even so, it can be worth it to buy a few. Do this enough times – over a broad selection of different stocks in different kinds of situations – and you should find that the few good trades more than make up for the many losing trades.
The best opportunities are often among the pharmaceuticals and biotechs. Company or FDA announcements can make these stocks jump, in most cases, farther than the option volatilities would have indicated they should prior to the announcement. It would not be unusual to see a pharmaceutical stock double on the release of good news. I have seen instances after the FDA approved a new drug when the out-of-the-money (OTM) calls went from 0.30 to 30.00 that day – 100x your money! Positive outcomes in other trades I have followed yielded anywhere from 44x to 1.0x (breakeven).
If you want to read on, as the article has to offer more information, HERE you can do so.
Understanding Volatility
Volatility is often the most neglected of the major factors that influence option prices. But we make sure never to make that mistake when we consider possible trade recommendations. Every asset has quiet periods when its options are cheap, and volatile periods when its options are expensive, so understanding volatility is a vitally important consideration in options trading.
Professional option traders are always aware of current volatility levels in relation to their historical context. To gain that perspective, they view historical volatility charts.
If interested in more, HERE you can do so.
--------------------------------------
Using Stops in Your Trading
Mistakes are made to learn from them and improve and not to say: Option trading will not work. Edison once told after his 100 failure: Until today I have not found out how to do it once the right way, but I have found out 100 ways how to do it the wrong way. And at the end he succeeded as he not has given up. I will post some articles which do spot on topics which are connected to the trade you showed here.
--------------------------------------
Playing Company Announcements
Catching a big price move is an option buyer's dream from the time that we first learn about options and how they can be used to speculate. The combination of limited risk and unlimited potential was – and still is for many – the main attraction of using options.
I have devoted a significant amount of time over the years to researching company announcements – how to anticipate them and how to profit from the sudden stock price moves that sometimes follow them. I have been interested in earnings announcements, FDA announcements, any kind of announcement that could move the stock. The bigger the potential move, the better.
The strategy of choice in these kinds of plays is simply to buy options – either just calls, just puts, or both. Nothing more complicated than that. If I want to cash in on a big move, there is no point in using a strategy that limits my returns. However, since there is a possibility of losing the whole investment, only a small amount should be invested in any one trade. I have mainly used OTM options because of the greater leverage. As a result, when the trade does not work out the whole investment is usually lost.
Naturally, options are more expensive when everyone knows that an important announcement is coming. Even so, it can be worth it to buy a few. Do this enough times – over a broad selection of different stocks in different kinds of situations – and you should find that the few good trades more than make up for the many losing trades.
The best opportunities are often among the pharmaceuticals and biotechs. Company or FDA announcements can make these stocks jump, in most cases, farther than the option volatilities would have indicated they should prior to the announcement. It would not be unusual to see a pharmaceutical stock double on the release of good news. I have seen instances after the FDA approved a new drug when the out-of-the-money (OTM) calls went from 0.30 to 30.00 that day – 100x your money! Positive outcomes in other trades I have followed yielded anywhere from 44x to 1.0x (breakeven).
If you want to read on, as the article has to offer more information, HERE you can do so.
--------------------------------------
Understanding Volatility
Volatility is often the most neglected of the major factors that influence option prices. But we make sure never to make that mistake when we consider possible trade recommendations. Every asset has quiet periods when its options are cheap, and volatile periods when its options are expensive, so understanding volatility is a vitally important consideration in options trading.
Professional option traders are always aware of current volatility levels in relation to their historical context. To gain that perspective, they view historical volatility charts.
If interested in more, HERE you can do so.
--------------------------------------
Using Stops in Your Trading
Use stops! That’s the message you read in the trading classics such as Schwager’s Market Wizards books or instructional pieces like William’s Long Term Secrets to Short Term Trading. The reader is implored to at least have a “catastrophic” stop order in place, just in case something crazy happens in the market.
Some trading educators teach that you should use stops to enter trades, as well as exit, on a systematic basis. But until recently, option traders have had some difficulty using stops since option stop orders are based on the price of the option itself…a dangerous proposition due to the volatile daily ranges that option prices can experience.
Another difficulty involves determining what option price to use as a stop. If the underlying asset hits a certain price, there is no guarantee that the option prices will move accordingly. This is due to large implied volatility changes that can occur day to day.
Some trading educators teach that you should use stops to enter trades, as well as exit, on a systematic basis. But until recently, option traders have had some difficulty using stops since option stop orders are based on the price of the option itself…a dangerous proposition due to the volatile daily ranges that option prices can experience.
Another difficulty involves determining what option price to use as a stop. If the underlying asset hits a certain price, there is no guarantee that the option prices will move accordingly. This is due to large implied volatility changes that can occur day to day.
HERE you will find more about the topic.
And HERE you will find the full article about this topic.
Hope it helps a bit to improve and add option knowledge to the once who are interested in the subject. Less mistake will happen in our option trading if we understand those topics in dept. It will improve our chance to end in profit even the risk is there at any time that something can happen against our position when naked. Knowing how to manage the trade or such naked legs and knowing when and how to add or take out what kind of new or old option legs, are an other tool to manage and handle those risk.
Now I wish a nice weekend / Dan
--------------------------------------
And here one more topic and how to handle it, as we have different possibilities which option we should choose for any of our trades:
The Long Put Strategy – Betting on the Downside
Finally, always know the current volatility situation by looking at a volatility chart. This allows you to know whether the options are historically cheap or expensive for that stock. If implied volatility is very high, you may want to consider buying deeper-in-the-money options. These options have less time premium, so they are not as sensitive to changes in volatility. You may also want to consider using a spread to reduce your volatility risk in that situation. While the potential rewards from buying puts as a stand-alone strategy are high, never forget that the associated risk is very high as well.
And here one more topic and how to handle it, as we have different possibilities which option we should choose for any of our trades:
The Long Put Strategy – Betting on the Downside
Finally, always know the current volatility situation by looking at a volatility chart. This allows you to know whether the options are historically cheap or expensive for that stock. If implied volatility is very high, you may want to consider buying deeper-in-the-money options. These options have less time premium, so they are not as sensitive to changes in volatility. You may also want to consider using a spread to reduce your volatility risk in that situation. While the potential rewards from buying puts as a stand-alone strategy are high, never forget that the associated risk is very high as well.
And HERE you will find the full article about this topic.
--------------------------------------
Hope it helps a bit to improve and add option knowledge to the once who are interested in the subject. Less mistake will happen in our option trading if we understand those topics in dept. It will improve our chance to end in profit even the risk is there at any time that something can happen against our position when naked. Knowing how to manage the trade or such naked legs and knowing when and how to add or take out what kind of new or old option legs, are an other tool to manage and handle those risk.
Now I wish a nice weekend / Dan
@Wishmaster
Mistakes are made to learn from them and improve and not to say: Option trading will not work. Edison once told after his 100 failure: Until today I have not found out how to do it once the right way, but I have found out 100 ways how to do it the wrong way. And at the end he succeeded as he not has given up. I will post some articles which do spot on topics which are connected to the trade you showed here.
Playing Company Announcements
Catching a big price move is an option buyer's dream from the time that we first learn about options and how they can be used to speculate. The combination of limited risk and unlimited potential was – and still is for many – the main attraction of using options.
I have devoted a significant amount of time over the years to researching company announcements – how to anticipate them and how to profit from the sudden stock price moves that sometimes follow them. I have been interested in earnings announcements, FDA announcements, any kind of announcement that could move the stock. The bigger the potential move, the better.
The strategy of choice in these kinds of plays is simply to buy options – either just calls, just puts, or both. Nothing more complicated than that. If I want to cash in on a big move, there is no point in using a strategy that limits my returns. However, since there is a possibility of losing the whole investment, only a small amount should be invested in any one trade. I have mainly used OTM options because of the greater leverage. As a result, when the trade does not work out the whole investment is usually lost.
Naturally, options are more expensive when everyone knows that an important announcement is coming. Even so, it can be worth it to buy a few. Do this enough times – over a broad selection of different stocks in different kinds of situations – and you should find that the few good trades more than make up for the many losing trades.
The best opportunities are often among the pharmaceuticals and biotechs. Company or FDA announcements can make these stocks jump, in most cases, farther than the option volatilities would have indicated they should prior to the announcement. It would not be unusual to see a pharmaceutical stock double on the release of good news. I have seen instances after the FDA approved a new drug when the out-of-the-money (OTM) calls went from 0.30 to 30.00 that day – 100x your money! Positive outcomes in other trades I have followed yielded anywhere from 44x to 1.0x (breakeven).
If you want to read on, as the article has to offer more information, HERE you can do so.
Understanding Volatility
Volatility is often the most neglected of the major factors that influence option prices. But we make sure never to make that mistake when we consider possible trade recommendations. Every asset has quiet periods when its options are cheap, and volatile periods when its options are expensive, so understanding volatility is a vitally important consideration in options trading.
Professional option traders are always aware of current volatility levels in relation to their historical context. To gain that perspective, they view historical volatility charts.
If interested in more, HERE you can do so.
--------------------------------------
Using Stops in Your Trading
Mistakes are made to learn from them and improve and not to say: Option trading will not work. Edison once told after his 100 failure: Until today I have not found out how to do it once the right way, but I have found out 100 ways how to do it the wrong way. And at the end he succeeded as he not has given up. I will post some articles which do spot on topics which are connected to the trade you showed here.
--------------------------------------
Playing Company Announcements
Catching a big price move is an option buyer's dream from the time that we first learn about options and how they can be used to speculate. The combination of limited risk and unlimited potential was – and still is for many – the main attraction of using options.
I have devoted a significant amount of time over the years to researching company announcements – how to anticipate them and how to profit from the sudden stock price moves that sometimes follow them. I have been interested in earnings announcements, FDA announcements, any kind of announcement that could move the stock. The bigger the potential move, the better.
The strategy of choice in these kinds of plays is simply to buy options – either just calls, just puts, or both. Nothing more complicated than that. If I want to cash in on a big move, there is no point in using a strategy that limits my returns. However, since there is a possibility of losing the whole investment, only a small amount should be invested in any one trade. I have mainly used OTM options because of the greater leverage. As a result, when the trade does not work out the whole investment is usually lost.
Naturally, options are more expensive when everyone knows that an important announcement is coming. Even so, it can be worth it to buy a few. Do this enough times – over a broad selection of different stocks in different kinds of situations – and you should find that the few good trades more than make up for the many losing trades.
The best opportunities are often among the pharmaceuticals and biotechs. Company or FDA announcements can make these stocks jump, in most cases, farther than the option volatilities would have indicated they should prior to the announcement. It would not be unusual to see a pharmaceutical stock double on the release of good news. I have seen instances after the FDA approved a new drug when the out-of-the-money (OTM) calls went from 0.30 to 30.00 that day – 100x your money! Positive outcomes in other trades I have followed yielded anywhere from 44x to 1.0x (breakeven).
If you want to read on, as the article has to offer more information, HERE you can do so.
--------------------------------------
Understanding Volatility
Volatility is often the most neglected of the major factors that influence option prices. But we make sure never to make that mistake when we consider possible trade recommendations. Every asset has quiet periods when its options are cheap, and volatile periods when its options are expensive, so understanding volatility is a vitally important consideration in options trading.
Professional option traders are always aware of current volatility levels in relation to their historical context. To gain that perspective, they view historical volatility charts.
If interested in more, HERE you can do so.
--------------------------------------
Using Stops in Your Trading
Use stops! That’s the message you read in the trading classics such as Schwager’s Market Wizards books or instructional pieces like William’s Long Term Secrets to Short Term Trading. The reader is implored to at least have a “catastrophic” stop order in place, just in case something crazy happens in the market.
Some trading educators teach that you should use stops to enter trades, as well as exit, on a systematic basis. But until recently, option traders have had some difficulty using stops since option stop orders are based on the price of the option itself…a dangerous proposition due to the volatile daily ranges that option prices can experience.
Another difficulty involves determining what option price to use as a stop. If the underlying asset hits a certain price, there is no guarantee that the option prices will move accordingly. This is due to large implied volatility changes that can occur day to day.
Some trading educators teach that you should use stops to enter trades, as well as exit, on a systematic basis. But until recently, option traders have had some difficulty using stops since option stop orders are based on the price of the option itself…a dangerous proposition due to the volatile daily ranges that option prices can experience.
Another difficulty involves determining what option price to use as a stop. If the underlying asset hits a certain price, there is no guarantee that the option prices will move accordingly. This is due to large implied volatility changes that can occur day to day.
HERE you will find more about the topic.
And HERE you will find the full article about this topic.
Hope it helps a bit to improve and add option knowledge to the once who are interested in the subject. Less mistake will happen in our option trading if we understand those topics in dept. It will improve our chance to end in profit even the risk is there at any time that something can happen against our position when naked. Knowing how to manage the trade or such naked legs and knowing when and how to add or take out what kind of new or old option legs, are an other tool to manage and handle those risk.
Now I wish a nice weekend / Dan
--------------------------------------
And here one more topic and how to handle it, as we have different possibilities which option we should choose for any of our trades:
The Long Put Strategy – Betting on the Downside
Finally, always know the current volatility situation by looking at a volatility chart. This allows you to know whether the options are historically cheap or expensive for that stock. If implied volatility is very high, you may want to consider buying deeper-in-the-money options. These options have less time premium, so they are not as sensitive to changes in volatility. You may also want to consider using a spread to reduce your volatility risk in that situation. While the potential rewards from buying puts as a stand-alone strategy are high, never forget that the associated risk is very high as well.
And here one more topic and how to handle it, as we have different possibilities which option we should choose for any of our trades:
The Long Put Strategy – Betting on the Downside
Finally, always know the current volatility situation by looking at a volatility chart. This allows you to know whether the options are historically cheap or expensive for that stock. If implied volatility is very high, you may want to consider buying deeper-in-the-money options. These options have less time premium, so they are not as sensitive to changes in volatility. You may also want to consider using a spread to reduce your volatility risk in that situation. While the potential rewards from buying puts as a stand-alone strategy are high, never forget that the associated risk is very high as well.
And HERE you will find the full article about this topic.
--------------------------------------
Hope it helps a bit to improve and add option knowledge to the once who are interested in the subject. Less mistake will happen in our option trading if we understand those topics in dept. It will improve our chance to end in profit even the risk is there at any time that something can happen against our position when naked. Knowing how to manage the trade or such naked legs and knowing when and how to add or take out what kind of new or old option legs, are an other tool to manage and handle those risk.
Now I wish a nice weekend / Dan
F&O both are risky bet always but option is more risky compare to future.Recently SEBI hiked lot sized because they wanted retail investors stay away from this risky instruments , now result is every one running for option and committing suicide with small account
Dan one of your best post so far take my bow as Option master.
F&O both are risky bet always but option is more risky compare to future.Recently SEBI hiked lot sized because they wanted retail investors stay away from this risky instruments , now result is every one running for option and committing suicide with small account
F&O both are risky bet always but option is more risky compare to future.Recently SEBI hiked lot sized because they wanted retail investors stay away from this risky instruments , now result is every one running for option and committing suicide with small account
@Wishmaster: Thanks for your kind words.
Yes, I have heard about this what you just posted about the run for options in India after SEBI changed the rules. People gather together, open an account with a broker, put in there little money and then start to really gamble with otm options. Well, every body needs to know by them self what they want to do with there money and we surely not can influent them, as the hope for quick profit makes all immune against such arguments.
Any way, take care / Dan
Yes, I have heard about this what you just posted about the run for options in India after SEBI changed the rules. People gather together, open an account with a broker, put in there little money and then start to really gamble with otm options. Well, every body needs to know by them self what they want to do with there money and we surely not can influent them, as the hope for quick profit makes all immune against such arguments.
Any way, take care / Dan
Similar threads
-
Axis Bank, TCS and Wipro in overbought zone. Good time to buy Put option?
- Started by Yaman
- Replies: 1
-
Axis Bank, Wipro and TCS in overbought zone, should I sell or hold?
- Started by Yaman
- Replies: 0
-
-
-