Anybody ever trade Stock Options?

About 5 years ago, I bought some straddles when the volatility was crazy.

I got lucky and actually made $900 but I realized the premiums just weren't worth it because the spreads were outrageous.

I haven't touched them since.

Options are best served as insurance for the high net worth individuals who can't diversify out of their stock positions or if you want some extra income (selling covered calls).

Otherwise, imo, it's a losers game. Might as well go play poker online.

 

I trade them all the time..mostly call option one month - 3 months out. I stick to nasdaq stocks bc they are more volatile. NYSE stocks like C are more established and don't move that much eventhough it trades bt 45 and 50 relatively for example.

 

I'm a professional hedge fund manager. My speciality isn't in options, but some of my traders in my firm are very good at it. I'm recruiting this guy who claims he has 99% success rate with options.

In the past I've done a lot of selling puts and naked shorts. The new Regulation SHO requirements has crimped some of our option traders abilities though.

 

Which companies do you focus your options trading on?

Do you trade the same companies over and over again?

 

What fund? I work for a large institutional investment consulting firm. Every now and then, I am called on to validate/repudiate some of the mathematics in hedge fund pitch books.

 

I have two funds already. One is an traditional long/short equity fund, an other is an arbitrage fund.

I have a third in the works.

Email me, and I'll give you more details.

 

well there are guys who can do options at an extremely high win % but reward/risk isn't high, meaning they don't make tons on each trade. there was this one guy who was a very good trader who got hired on at my office who basically had a market making strategy that worked very well for futures. he was a big time quant so his decision making with futures was purely mathematical based on his market making strat. he would pull in like over 100 a month.

just curious where do you work? i'm in austin and i work at a prop shop, i guess it could almost be an arb hedge fund since i'm not trading any of my own money. probably about 75 other traders here. shoot me off an email at robbie31580@gmail.com i'd love to talk sometime about how you trade and stuff.

 

my honest opinion of options is that it is better to trade the stock, but thats just me. i think options are a way that people can chase big profits but also get hit pretty good if they don't have a very well defined strategy in place. plus they are often illiquid and you have big spreads that you have to pay, right? take a look at some of the books on options they are pretty in depth. it would be like reading a calculus book for fun. (that isn't fun to me ) i believe 'options volatility and pricing', can't remember the author right now, is one of the main books on options trading that you need to read if you really want to get into it.

either way...just stick to stops and don't let yourself get off your plan.

 

see this is an argument i've never really agreed with. it seems like a lot of the crazy low float NAS stocks don't have options that can be traded on them. also if you take a stock like citigroup then you need to compare it to a MSFT or any other NAS stock with a float over 5 bln shares. like if you want to tell me that GRA, USG, MSO, CME, and so on are not volatile then i guess thats your feelings then. i guess also if you want volatility then you can check out some of the crazy AMEX stocks but they don't have as much volume.

finally, i am a daytrader who used to trade NAS's and i used to hate NYSE and AMEX stocks cuz i thought i was getting screwed by the specialist on bad fills and stuff. but man when you realize how much easier it is to trade NYSE stocks since you have a specialist to go off of, direct plus, and open book to base trades on then it makes stuff much easier. anyhow...my point is just that volatility doesn't always mean more money if you are setting stops that have to be wide that erode on your profit margins, you know? ok well i got 8 min to bell and a ton of briefing.com to read

 

My brothers brother-in-law is a financial planner. he swears that stock options are the easiest way and most consistant way to make a big buck if you know what you're doing.