In options trading, what is the difference between people who win at it and people who lose at it?
I am 18 years old and I want to know more about options trading, and what factors affect winners and losers, i.e. what do winning options traders have that losing options traders do not have? Also, if I am to become successful at options trading, what do I need to be successful at it?
Most people lose. To quote Merton MIller: "People really think they are doing something purposeful, but they are really not" – when he addressed the subject of stock/option trading.
Actually, people really find it hard to believe that stock prices are changing randomly – hell even Einstein didn’t like the idea of randomness, but in a famous debate between Einstein and Niels Bohr – Niels Bohr proved Einstein wrong…
In the options trading there is one thing called a "fair price" – that is…a price whereas nor the buyer/nor the seller has advantage. Black-Scholes and similar models attempt to find such price and they are successful most of the time. Other than all that: Volatility arbitrage nowadays almost never occurs…so you are basically fucked.
Who makes money then??? The option brokers make money, people like me who lie to other people that you can make money 
. But…you cannot. My advice? Start your own option brokerage company! Do not bother trading, only bingo winners like George Soros make money…smart folks lose money unfortunately.
good luck.
Can Trading Options In The Stock Market Make You A Full Time Income?
I want to quit my job but still need a solid source of income. Some friends of mine have suggested trading stock options, but is this really possible to make enough to replace my normal income or my job?
To be successful at trading options in the stock market, you’ll need practice. The best way to get practice is through paper trading, that’s where you follow a stock and pretend you are actually putting trades in and then taking them out, hopefully for a profit.
You can also find books on the subject, like on amazon or barnes and noble. You’ll need a good foundation on the basics. There are also different strategies when it comes to trading options so you’ll need to learn those first as well.
For more advanced ways on how to trade options, there are sites that offer guidance. The advantage with these sites is that they will take you beyond the basics and offer you a better chance at higher returns on your trades.
I’ve listed some sites below that you can check out, they are for information purposes only and not a recommendation. However, you will learn a little more than what you can get from reading books.
http://www.stockoptiontradingsystems.com
http://optionsexpress.stockoptiontradingsystems.com
http://tradeking.stockoptiontradingsystems.com
I think if you start your learning this way, you will be able to succeed in trading options. Others have done it so there’s no reason why you can’t learn how to do it too.
Hope that helps and good luck!
Which Is The Best Stock Options Trading System For Newbies?
Want to learn how to trade options but there are so many different systems out there. Can someone please let me know what system works and how to learn it? Thanks!
Looking for a good options trading system is something I had to do when I first started but when I found this site, it really helped me a lot and it really works for me, you should check it out.
http://www.StockOptionsTradingSystem.com
I think it’ll help you learn how to trade options the right way and make some nice profits!
I am looking for a good book to learn to start trading options?
I have little experience trading options and I would like to learn more. I am looking for a good book with good workbook exercises. Can anyone recoomend "Start Trading Options" by Kevin Kraus
I recommend "Understanding Options" by Michael Sincere as an introductory book.
Hit amazon and look for 5 star reviews on books. and get this book on options:
Option Volatility & Pricing: Advanced Trading Strategies and Techniques by Sheldon Natenberg.
Obviously that is more advanced but after the first book you should at the least skim one of the more advanced books and try to pick some of the tricks up through osmosis. There are a bunch of other options books out there too and the way I pick them is to read the reviews and then deciding what the content is and if the book suits me.
What investment vehicle out of spread betting or options trading are you more likely to win at?
I want to know in your opinion what investment vehicle am I most likely to win at out of options trading or spread betting, and which of them is most likely to make you a millionaire? Please help/advise. Thanks.
Spread betting is definitely easier to understand – you just choose the direction up or down and voila… Options are cheap but they tend to expire worthless. Options are more complex instruments and are best left to experienced traders – the only reason they are popular in the USA is that options provide gearing and they they don’t have CFDs there. If you are in the UK or Ireland I would definitely go for spread betting.
As for which one you are more likely to win or make you a millionaire (!) that depends wholly on your trading skills – you can be successful in spread betting, futures, options, normal stock market dealing…IF you are able to predict the correct market direction. I can tell you that last year (2008) was a very painful year to trade (unless you happened to short banking stocks)…
Who will give me best nifty options trading tips?
I wish to earn Rs. 2 lacs within 4 to 5 months by investing of Rs.10 to 15000/- in nifty options.Is their anybody whos tips are 95 to 99% correct.So that I will make Rs.2 lacs in 4 months.
If someone has such accurate tips, why will s/he be in such a poor situation to make money by selling tips. Instead they will start with rs. 10,000, make 2 lacs in 4 months. Next they use 2 lacs to make 4 crores in another 4 months. oh.. now use 4 crores to make 80 crores by year end… and may be in couple of years.. buy every stock that’s available in the Market and be the richest person on earth…
If someone does come to you claiming that they have the accurate tips and you should pay them fee, ask them why are they working for fee instead of not making money for themselves.
What is the best book to read to learn options trading?
I have a pretty good undertsanding of stocks but i have no clue what options are.
I too was in the same boat as you a few years back. After having discussed this with several professionals and traders, I was recommended the following and support their thoughts as well:
1) Options As a Strategic Investment by Lawrence McMillan
The book is heralded as the "The Bible" for option traders. It comes complete with explanations, charts, and commentary; a complete package and stand-alone volume. It is often called the "OSI book."
2) Option Volatility and Pricing by Sheldon Natenburg
This particular book delves more into the structure and pricing of the option rather than the many applications as OSI covers.
Conclusion: Anything by the above two authors is a safe bet to be a complete study tool in learning about options. From beginning investors wanting to know the basics through the advanced traders who want to brush up on concepts and application, you are bound to be satisfied.
Options Trading?
Options require a lot of homework. My best advice is never take a short position on an option as the losses are unlimited. If you do decide to dive into this then take a long position as if you miss, you just don’t exercise and lose some money but not a whole lot.
Does options trading affect a company’s business?
I trade options and was wondering if by trading them I can harm or help companies like when we buy or sell their stocks.
If you are trading options based on insider information (as that term is defined by the Securities and Exchange Commiussion) you can do yourself and the company a lot of harm and spend time sitting in a jail cell.
Otherwise, options are just agreements between private individuals and they have no direct bearing on a company’s business or finances.
What brokerage offers low commissions on options trading?
Vanguard charges quite a bit. Maybe some companies do much better.
Also, do brokerages charge for exercising options?
MB Trading is awesome. I’ve been with them for years, and they are stable and cheaper than everyone else. Most the day traders I know use them.
If you’re looking for a tool in your trading to help you checkout StockHawk.net.