Do you trade options? - GoFuckYourself.com

Jet Set Cat · 01-05-2012, 05:16 PM

Just curious about a good strategy for calls and puts not covered or married just the naked option.

I know they?re risky and the majority expire worthless but does the leverage off set the risk?

jimmycooper · 01-05-2012, 06:11 PM

The safest is to buy deep-in-the-money LEAP calls with a delta ~ 90. I sometimes like to buy those instead of straight shares because they provide added leverage and you can also use them for call writes. It's a a good trade and one of the safest options strategies.

http://www.investopedia.com/articles...#axzz1idNCKUJ0

With that being said, you're not going to get rich with that strategy as it's a fairly conservative play with a limited downside and upside. It also requires more of an outlay than other options strategies.

I also like to occasionally buy SPY puts to hedge my long positions whenever I anticipate a dip in the market. When that happens, it's usually based on something I read in that weeks Economist. Nothing to fancy.

When trading naked puts and calls as your primary trading strategy, you should really get set up with Level 2 quotes and learn how to read them. It's fairly simple and really helps you squeeze the most out of each trade.

Other than that, don't hold too long b/c time decay will eat them up. When I get the SPY puts, I usually buy a month or two out and never hold for more than 3 days.

If you're waiting for a catalyst (such as the announcement of Phase III test results or an FDA announcement for a biotech), there's usually a run up beforehand, but be careful with that if playing small caps (like a biotech) b/c the big funds can get tricky in manipulating the prices.

Also, don't trade naked options on triple leveraged ETFs.

INever · 01-05-2012, 08:40 PM

Support and resistance.

You need to figure out where the high and low of the day may be and sell/buy at those moments.

Cut your losses quick. Stay rational so you can evaluate your winners as they occur, and know when to hold or take profit.

good luck!

Jet Set Cat · 01-06-2012, 12:02 AM

Very interesting replies thanks.

CurrentlySober · 01-06-2012, 05:54 AM

i prefer to trade onions... or poo..

01-05-2012, 05:16 PM	#1
Jet Set Cat Confirmed User Industry Role: Join Date: Nov 2011 Posts: 249	Do you trade options? Just curious about a good strategy for calls and puts not covered or married just the naked option. I know they?re risky and the majority expire worthless but does the leverage off set the risk?

01-05-2012, 06:11 PM	#2
jimmycooper Confirmed User Industry Role: Join Date: May 2010 Location: Manhattan Posts: 4,016	The safest is to buy deep-in-the-money LEAP calls with a delta ~ 90. I sometimes like to buy those instead of straight shares because they provide added leverage and you can also use them for call writes. It's a a good trade and one of the safest options strategies. http://www.investopedia.com/articles...#axzz1idNCKUJ0 With that being said, you're not going to get rich with that strategy as it's a fairly conservative play with a limited downside and upside. It also requires more of an outlay than other options strategies. I also like to occasionally buy SPY puts to hedge my long positions whenever I anticipate a dip in the market. When that happens, it's usually based on something I read in that weeks Economist. Nothing to fancy. When trading naked puts and calls as your primary trading strategy, you should really get set up with Level 2 quotes and learn how to read them. It's fairly simple and really helps you squeeze the most out of each trade. Other than that, don't hold too long b/c time decay will eat them up. When I get the SPY puts, I usually buy a month or two out and never hold for more than 3 days. If you're waiting for a catalyst (such as the announcement of Phase III test results or an FDA announcement for a biotech), there's usually a run up beforehand, but be careful with that if playing small caps (like a biotech) b/c the big funds can get tricky in manipulating the prices. Also, don't trade naked options on triple leveraged ETFs. __________________ Last edited by jimmycooper; 01-05-2012 at 06:14 PM..

01-05-2012, 08:40 PM	#3
INever Confirmed User Join Date: Jan 2005 Location: .......in a niche, in orbit...... Posts: 3,491	Support and resistance. You need to figure out where the high and low of the day may be and sell/buy at those moments. Cut your losses quick. Stay rational so you can evaluate your winners as they occur, and know when to hold or take profit. good luck! __________________ I love Camdough

01-06-2012, 05:54 AM	#5
CurrentlySober Too lazy to wipe my ass Industry Role: Join Date: Aug 2002 Location: A Public Bathroom Posts: 38,513	i prefer to trade onions... or poo.. __________________ My AI Handywork... My Dream Gal... XXX 👁️ 👍️ 💩

01-06-2012, 12:02 AM	#4
Jet Set Cat Confirmed User Industry Role: Join Date: Nov 2011 Posts: 249	Very interesting replies thanks.