Archive for October, 2009
Which books should I read?
Is there a mentor that can teach me?
I really want to master options trading. Help me please!
<<<Which books should I read?>>>
Start at the CBOE Learning Center at
http://www.cboe.com/LearnCenter/default.aspx
and go through their free tutorials, classes and webcasts. After that read one or two good books about options trading. If you stick with books in the bibliography at
http://www.cboe.com/Institutional/Bibliography.aspx
you will know they are good books. My favorites are are "Options as a Strategic Investment" by Lawrence McMillon and "Options Volatility & Pricing" by Sheldon Natenberg but I recommend you browse different books at a large library, a large book store, or at amazon.com to find books written is a syle that is right for you.
<<<Is there a mentor that can teach me?>>>
There are paid mentors available, such as
http://www.sheridanmentoring.com/index.cfm
but, in my opinion, they charge a lot of money to teach you what you could learn on your own from books.
You can ask questions, at no cost, on message boards such as
http://messages.yahoo.com/Business_%26_Finance/Investments/forumview?bn=4686677
where at least a couple options professionals contribute at times.
<<<I really want to master options trading. Help me please!>>>
In general I think you will find more people are more willing to help you if you make an effort to help yourself first by taking classes and reading books.
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Although you really didn’t ask, the previous answers dealt with the risk associated with options trading. One of the things I find most attractive about options is that you can control the amount of risk you take. If you want to try to get rich quick, you can: Just understand that trying to get rich quick is very risky and it is easy to lose a lot of money in the attempt. On the other hand, you can reduce the risk associated with trading stocks and/or futures, although doing so will usually reduce your total return if you are a good trader.
I want an online stock trading company that trades stocks at low rates, percentage commission prefered.
Tradeking has pretty good rates, and a flexible trading platform. You get what you pay for with on line brokerage companies, that is to say if you pay a little more you will get more features for research.
Im currently using Zecco, which charges $4.50 + 0.50/contract per trade. I trade options frequently and these commissions are eating from my profits. Are there other discount online brokers that beat this price?
Try Interactive Broker. Between 1 and 2 dollars for most options trades.
I want to learn the option trade so please teach me in simple english.
This is a complicated topic. I suggest either taking a Futures & Options class or reading a book on the subject. A good place to start is John Hull’s book options, FUTURES and OTHER DERIVATIVES
Any one know good quality firms to work for?
In my experience as a trader, I’ve worked in some capacity with the following firms…
www.interactivebrokers.com, www.solvayfinancial.be
www.gcitrading.com, www.finotec.com, www.odlsecurities.com
My short answer would be… ODL Securities is the most competitive employer in the field.
I’m looking into helping a family by becoming a surragant mother. I just dont really know the steps or options. I dont really want to go through an "agency" type thing, but I dont know if there are any other options. Also I live in the state of Ohio, I dont know if that matters or not? I am a 24 year old non smoker!
I have already given birth to my own child with no complications.
Well first on all requirements you have to have a least one child of your own. And if you don’t want to go through an agency, make sure the people have there own lawyers and you as well. Just in case.
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then yea you could be a surrogate mother to a couple. Some couples also like the privacy of not going through an agency, also. Now you would just have to look around, since I dont think it would be posted in the wanted ads. You might have to call around to clinics, hospitals, maybe even an agency. Just to get you in the right direction
My parents might get into this deal, and i’m doing some research. From everything i’ve read, its a pyramid scam. from what i heard at the meeting, it’s NOT a pyramid deal, but instead a vertical climb. However, what really concerns me is that this "company" doesn’t have a stock system….no symbol, no trade, nothing. and supposedly they have all these deals with top companies (Google, Nike, Yahoo, etc.) but no trade options. I was just wondering if anybody has some UNBIASED information on this company.
Thanks,
Mike
They use to have stocks. They do publish a annual report however. If your parents don’t get into the business I would recommend looking into their health products. Currently I and my family and friends take their supplements. This has helped them a lot, especially the OPC-3.
I’ve read a lot on day trading and stock options, but I don’t completely understand how it works and how the concepts are applied and carried out on a regular basis. Can you explain to me how they work based on the concepts?
Day trading is buying and selling of a particular stock many times throughout the day. Throughout the day, a stock price may change due to several things, such as volume (others buying or selling). Day traders try to take advantage of this by buying the stock on the low swings, and selling it on the high swings. It usually takes a lot of money to do this in order to make it worth your while. Day traders often do this with several stocks at once.
Most on line brokers require a minimum cash account of around ten thousand dollars for you to day trade. I can’t remember the rules exactly, but Ameritrade, considers day trading as buying or selling of the same stock within a couple days. And if you have two or three instances of this, they classify you as a day trader.
Stock options are something that employers offer to make a job more desirable. Usually offering company stock on top of their normal pay. Having stock in a company you work for also makes you care more about your company.
can i buy the underlying shares as the first leg of the option trade.
is this a bad idea or does it not make a difference
how long out should butterfly option trades
1-3 months or more
is it a bad bet or bad trading to trade a butterfly spread for more than one month?
<<<can i buy the underlying shares as the first leg of the option trade.>>>
Sure. A lot of spreads use positions include positions in the underlying security.
By definition a butterfly spread does not include shares of the underlying security, so technically it will not be a butterfly spread is you substitute shares for options, but you can accomplish the same purpose. For example, a spread consisting of
Long 300 shares
Short 6 calls with a $5 strike
Long 3 calls with a $10 strike
would be managed pretty much like a butterfly spread with shares being treated as a $0 strike price call position.
<<<is this a bad idea or does it not make a difference>>>
If you want a zero dollar strike in a butterfly you are likely dealing with potentially very volatile stocks which makes butterflies more dangerous. As long as you understand that, it is not a bad idea. I actually kind of like the idea of not paying any extrinsic value and not having any expiration date on one long leg of a spread.
<<<how long out should butterfly option trades
1-3 months or more>>>
In my opinion three months of less is reasonable as long as you are willing to adjust your position as the situation changes. That is only my opinion, and I have not traded that many butterflies in my life.
<<<is it a bad bet or bad trading to trade a butterfly spread for more than one month?>>>
I would not say it is inherently good or bad.
Opening butterflies for multiple months at once would not be a strategy I would recommend. However, opening a butterfly with different strike prices for a different month as a method of bringing your overall position back toward being delta-neutral seems like a very reasonable thing to do. Just be careful that you do not grow the size of the total position too much.
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I want to comment on one of the other answers you received because it appears to have a very narrow view of butterfly spreads. He is only talking about long (debit) ATM call butterflies. Butterfly spreads can also be short (credit) instead of long. They can be ITM or OTM instead of ATM. Instead of calls they can be puts or iron (both calls and puts).
I agree with his thought that you should believe implied volatility is either too high or too low before you consider a butterfly spread, but that is true for any options trade, not just butterflies..
I am right now learning the technical analysis for improving my trading skills. Before indulging in actual trading I want to use a a stock stimulator with indian stocks for testing my trading strategies for which I require a free stock stimulator.
Try www.fingad.com, you can also get advice and see how your strategy compares to others.