Hi, I am very new to trading and have been just buying what I think is good and holding for a very short time and hoping to get lucky and the price goes up.
So far I have been ok, not great.
I have been seeing allot about options, buy to close, sell to open, put, call, and it is all greek to me. I have searched the web and have read up on some items but again maybe I am just very slowww because I just don't get it but want to.
Is there any good books, webcasts, etc that can take a dummy like me and make me understand. I see there is more money to be made by options than just buying a stock and selling the stock.
Thanks for any help.
Gator
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Brian is the resident expert here for options, this is the website for his book http://www.optionsplaybook.com/
I have read lots including the website and his book x2 and still barely understand options greeks etc. never mind condors and butterflies.
Try out whatever you're thinking first you insanely leverage LOSSES when you get into options. Here is the CBOE site for virtual trading options.
http://www.cboe.com/tradtool/virtualtrade.aspx
I have read lots including the website and his book x2 and still barely understand options greeks etc. never mind condors and butterflies.
Try out whatever you're thinking first you insanely leverage LOSSES when you get into options. Here is the CBOE site for virtual trading options.
http://www.cboe.com/tradtool/virtualtrade.aspx
Don't get started in options until you get started in stocks. That would be trying to run before you can even crawl.
Also don't think there is more money to be made in options vs. stocks. There is also a lot more money that can be lost in options vs. stocks.
Options are not an easy concept to grasp so don't feel slow if you first don't understand, but start with basic stocks.
Also don't think there is more money to be made in options vs. stocks. There is also a lot more money that can be lost in options vs. stocks.
Options are not an easy concept to grasp so don't feel slow if you first don't understand, but start with basic stocks.
A distinction between buying and selling options should be made for the beginner.
Selling calls on stock you own or puts covered by cash (which should soon be allowed for L1) result in a small profit or loss other than extreme cases.
Buying calls or puts can be a total loss, especially OTM, even ITM if the market moves against you. Don’t risk more than you can afford to lose.
Handle options like you would fire.... very carefully. Do not buy or sell options if you are unsure what you are getting into. New traders usually only have the choice of buying call or puts, or selling calls as part of what is known as a covered call. Before you do anything with options paper trade for at least 6 months. You will be happy you did. Since most options you might consider buying will be in the $2.00 - $5.00 range you might look at stocks in the same price range, but still you need to do your homework even then. There are some good stocks that are bought and sold in that price range, but there are also a lot of dogs too.
One thing that you have to realize when buying options is that you will usually give up a little more to open the position. A stock may have a bid / ask of 7.48 / 7.50 but an option may be 7.20 / 7.50 bid ask. Immediately you are giving up $30 on your purchase, plus an extra $1.30 per option to open and close the position.
Good luck ... where are you from? We like gators here in Florida!
One thing that you have to realize when buying options is that you will usually give up a little more to open the position. A stock may have a bid / ask of 7.48 / 7.50 but an option may be 7.20 / 7.50 bid ask. Immediately you are giving up $30 on your purchase, plus an extra $1.30 per option to open and close the position.
Good luck ... where are you from? We like gators here in Florida!
Thanks guys for the replies.
I am pretty comfortable with buying and selling stock. I downloaded a pdf file from here that Trench Warfare suggested I look into and it looks like what I have been looking for "Options for Dummies"...:)
I do believe I will hold off until I really get a grasp and terminology down. My thought was to get into options as there was more money to be made then just buying a few hundred stock at $25 and selling when they reached a peak (in my mind) of say $28.
I am sure I will be back with many more questions as I progress and I appreciate all your help.
Jake, I am in the Tampa Bay area myself. Always been a Gator, I am also a member of a POW/MIA Awareness group here and that's my road name.
I am pretty comfortable with buying and selling stock. I downloaded a pdf file from here that Trench Warfare suggested I look into and it looks like what I have been looking for "Options for Dummies"...:)
I do believe I will hold off until I really get a grasp and terminology down. My thought was to get into options as there was more money to be made then just buying a few hundred stock at $25 and selling when they reached a peak (in my mind) of say $28.
I am sure I will be back with many more questions as I progress and I appreciate all your help.
Jake, I am in the Tampa Bay area myself. Always been a Gator, I am also a member of a POW/MIA Awareness group here and that's my road name.
Gator...welcome aboard and hope you will be a regular contributor. Don't ever be afraid to ask a question no matter how trivial or stupid you may think it is. Someone before you has probably asked the same question, or didn't and was sorry later. I think you will find most of the contributors here quite cordial, but occasionally everyone gets a little ribbing. If you make an obvious mistake someone will surely point it out. If it is a judgement call you may get more feedback than your brain can handle. Take it all in stride and enjoy the ride.
Regarding buying at 25 and reaching a peak of 28...you need to rethink that.
Any stock at any time can take off in either direction. Just look at DTG for example from 2007 to present and you will see what I mean.
Regarding buying at 25 and reaching a peak of 28...you need to rethink that.
Any stock at any time can take off in either direction. Just look at DTG for example from 2007 to present and you will see what I mean.
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