Options trading

[Anonymous]

My husband wants to get in to options training. I am trying to educate myself on the risks vs. reward (yes I have already googled it). I’m interested if anyone has any feedback to share on how much time options takes in a given day/week. My husband already has a busy job (10 hr days)/ so I am wondering options if it is something people dabble in or does it require lots of hours (researching companies) to be successful. My bias is to just put more funds into our retirement accounts but he knows people that have made a lot in options….

[Anonymous]

You can go down the rabbit hole as much or as little as you like. You just have learn about options, there's too much to unpack here. I suggest reading McMillan.

https://www.amazon.com/Options-as-Strategic-Investment-Fifth/dp/0735204659/ref=pd_aw_fbt_img_1/141-1772609-9504214?pd_rd_w=dtlRf&pf_rd_p=76328f70-5fff-49b7-869a-94bfdaa768fc&pf_rd_r=HRB2V8HY8VMK06FFK2P5&pd_rd_r=06873a28-2e61-4405-be55-ea1beab1f98b&pd_rd_wg=7kDwh&pd_rd_i=0735204659&psc=1

It is a behemoth and will take months to finish, but consider it an education. You can use options to intensely trade every single day. You can use options to do lower activity stuff like force your stocks to pay what are essentially dividends, sometimes almost every week. You can use options as basically a way to own stocks with leverage, which is what Nancy Pelosi does all of the time. You can get extremely simple or very, very complicated with fancy strategies that mix and match all different kinds of options in order to change your risk-reward profiles.

It all really depends. The vast majority of time I don't have time to setup and think about complicated options plays that would employ all different kinds of spreads. I just use them to force my stocks to pay me income evryweek. It's nice getting a few hundred bucks per week. Free money for bills and groceries.

[Anonymous]

It is a high risk / high reward activity. At a retail level, its basically gambling. Chances are the time put into research isn't going to be strongly correlated with your results. A wild guess will likely be just as good as a 'well informed' (as much as a retail investor can research) judgement.

So if you have discretionary funds and don't mind the possibility of losing everything you put into it, let him go ahead. You should approach it as a hobby and have no expectations on returns, otherwise you'll likely not be happy with the outcome

[Anonymous]

Anonymous wrote:It is a high risk / high reward activity. At a retail level, its basically gambling. Chances are the time put into research isn't going to be strongly correlated with your results. A wild guess will likely be just as good as a 'well informed' (as much as a retail investor can research) judgement.

So if you have discretionary funds and don't mind the possibility of losing everything you put into it, let him go ahead. You should approach it as a hobby and have no expectations on returns, otherwise you'll likely not be happy with the outcome

Thank you both!

[Anonymous]

Anonymous wrote:My husband wants to get in to options training. I am trying to educate myself on the risks vs. reward (yes I have already googled it). I’m interested if anyone has any feedback to share on how much time options takes in a given day/week. My husband already has a busy job (10 hr days)/ so I am wondering options if it is something people dabble in or does it require lots of hours (researching companies) to be successful. My bias is to just put more funds into our retirement accounts but he knows people that have made a lot in options….

I've been trading options for over a decade now and almost full time last year. You can make it as simple and as complex as you want it to be.

There are several basic books and most are decent. Here's a free book you can read to give you an intro to Options - https://ptgmedia.pearsoncmg.com/images/9780133087895/samplepages/0133087891.pdf. The Options Industry Council has free education content as well - https://www.optionseducation.org/.

Once you have read this book (or others you may find) and/or familiarized yourself with the OIC content, I'd recommend Fullyinformed.com. One of the best resources (used to be free but charges $70 for the monthly membership now). Read all the free content first and subscribe/pay if you want to continue with his approach. This site primarily focuses on selling Puts (that gives the buy the right to sell the stock at a certain price and creates an obligation on the seller to buy that stock at that price) and has a great track record.

Like anything else, you need to treat it as a real business in order to make money, and more importantly, more money than just investing in an index.

Good luck!

[Anonymous]

Anonymous wrote:

Anonymous wrote:My husband wants to get in to options training. I am trying to educate myself on the risks vs. reward (yes I have already googled it). I’m interested if anyone has any feedback to share on how much time options takes in a given day/week. My husband already has a busy job (10 hr days)/ so I am wondering options if it is something people dabble in or does it require lots of hours (researching companies) to be successful. My bias is to just put more funds into our retirement accounts but he knows people that have made a lot in options….

I've been trading options for over a decade now and almost full time last year. You can make it as simple and as complex as you want it to be.

There are several basic books and most are decent. Here's a free book you can read to give you an intro to Options - https://ptgmedia.pearsoncmg.com/images/9780133087895/samplepages/0133087891.pdf. The Options Industry Council has free education content as well - https://www.optionseducation.org/.

Once you have read this book (or others you may find) and/or familiarized yourself with the OIC content, I'd recommend Fullyinformed.com. One of the best resources (used to be free but charges $70 for the monthly membership now). Read all the free content first and subscribe/pay if you want to continue with his approach. This site primarily focuses on selling Puts (that gives the buy the right to sell the stock at a certain price and creates an obligation on the seller to buy that stock at that price) and has a great track record.

Like anything else, you need to treat it as a real business in order to make money, and more importantly, more money than just investing in an index.

Good luck!

It’s been a bull market for a decade.

[Anonymous]

DON'T DO THIS.

You can lose everything, do you realize this? It's easy to lose as well.

Your husband might know people who have made a lot of money on options but does he know how much they have lost?

Research it and read some people's experiences first.

Your idea to increase your retirement contributions makes sense.

[Anonymous]

I used to be a trader. In order to be mildly successful, you must have a deep deep understanding of an industry and stick with it. Stay away from commodities, currencies etc. because of the high frequency trading.

[Anonymous]

I scalp options every day. It is definitely intense. I use technical analysis, but primarily stick to scalping about 10 different tickers because I don't have time to do tons of research. I make money off of quick small movements that these stocks make every day. I don't need to know more than which way I believe the stock is going to move in the next few minutes. I make small consistent gains, and as I gain more experience and success, I will scale up to double or triple each trade by buying more contracts.

Scalping lowers your risk considerably because you can get out of a losing trade quickly and minimize losses. I have no desire to try to predict how a stock will move tomorrow, let alone next week or next month. Personal preference.

My most successful trades are pretty much all under 2 minutes in duration.

[Anonymous]

Anonymous wrote:DON'T DO THIS.

You can lose everything, do you realize this? It's easy to lose as well.

Your husband might know people who have made a lot of money on options but does he know how much they have lost?

Research it and read some people's experiences first.

Your idea to increase your retirement contributions makes sense.

Stop being overly dramatic. Options can be used for many things, like using them as actual insurance in the event of a downturn and so they you have a peace of mind. Or you can use them to basically force your stocks to pay you dividends, which of relatively low risk and really all not that much more risky than just owning the stock. Most brokers won't even let you do the most high risk stuff without multiple levels of clearance anyway.

[Anonymous]

Anonymous wrote:

Anonymous wrote:DON'T DO THIS.

You can lose everything, do you realize this? It's easy to lose as well.

Your husband might know people who have made a lot of money on options but does he know how much they have lost?

Research it and read some people's experiences first.

Your idea to increase your retirement contributions makes sense.

Stop being overly dramatic. Options can be used for many things, like using them as actual insurance in the event of a downturn and so they you have a peace of mind. Or you can use them to basically force your stocks to pay you dividends, which of relatively low risk and really all not that much more risky than just owning the stock. Most brokers won't even let you do the most high risk stuff without multiple levels of clearance anyway.

OP tune out these types your posting on forum where many stuck in their ways. Read what Jack Bogle said barely 4 years ago..He founded Vanguard in case you didnt know. He strongly felt the asset bubble we are in now will reach multi decade levels of mediocrity. "oh no your wrong the market did 28% this year" He wasn't talking about 2020-20?? when the Fed had the money printer on overdrive he was talking about the 2020's/ 30's and beyond. He thought 4% was what we would average. Yea 4, not 15 not even 8. It will take people many more years to accumulate savings like we have seen since the 1990s. Seeking returns that can "enhance" your overall portfolio with things like options is a great way to position yourself for the decades ahead. Note that I said enhance not replace you want to use options leverage properly.

A great way to step into options is by paper trading. Brokers like TDA allow for you to set up and trade with monopoly money first before gettin into the real trades. An extensive self directed education plan on options is not necessary to become successful. As someone said it is possible to keep it simple while still managing risk.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My husband wants to get in to options training. I am trying to educate myself on the risks vs. reward (yes I have already googled it). I’m interested if anyone has any feedback to share on how much time options takes in a given day/week. My husband already has a busy job (10 hr days)/ so I am wondering options if it is something people dabble in or does it require lots of hours (researching companies) to be successful. My bias is to just put more funds into our retirement accounts but he knows people that have made a lot in options….

I've been trading options for over a decade now and almost full time last year. You can make it as simple and as complex as you want it to be.

There are several basic books and most are decent. Here's a free book you can read to give you an intro to Options - https://ptgmedia.pearsoncmg.com/images/9780133087895/samplepages/0133087891.pdf. The Options Industry Council has free education content as well - https://www.optionseducation.org/.

Once you have read this book (or others you may find) and/or familiarized yourself with the OIC content, I'd recommend Fullyinformed.com. One of the best resources (used to be free but charges $70 for the monthly membership now). Read all the free content first and subscribe/pay if you want to continue with his approach. This site primarily focuses on selling Puts (that gives the buy the right to sell the stock at a certain price and creates an obligation on the seller to buy that stock at that price) and has a great track record.

Like anything else, you need to treat it as a real business in order to make money, and more importantly, more money than just investing in an index.

Good luck!

It’s been a bull market for a decade.

So? You do realize options trading gains don't have to be correlated to market direction, right?

[Anonymous]

Just don't let your DH find r/wallstreetbets.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:DON'T DO THIS.

You can lose everything, do you realize this? It's easy to lose as well.

Your husband might know people who have made a lot of money on options but does he know how much they have lost?

Research it and read some people's experiences first.

Your idea to increase your retirement contributions makes sense.

Stop being overly dramatic. Options can be used for many things, like using them as actual insurance in the event of a downturn and so they you have a peace of mind. Or you can use them to basically force your stocks to pay you dividends, which of relatively low risk and really all not that much more risky than just owning the stock. Most brokers won't even let you do the most high risk stuff without multiple levels of clearance anyway.

I want to second this. I am the PP that scalps options. I was a SAHM for 20 years and this fits so well into my lifestyle, but scalping takes little time. As I said, most of my trades are under 2 minutes, so once you learn what to look for, you can trade with a half hour a day for now if that's all you have.

I paper traded for 6 months with TD Ameritrade (their platform for paper trading is called thinkorswim). I couldn't have learned without it.

OP tune out these types your posting on forum where many stuck in their ways. Read what Jack Bogle said barely 4 years ago..He founded Vanguard in case you didnt know. He strongly felt the asset bubble we are in now will reach multi decade levels of mediocrity. "oh no your wrong the market did 28% this year" He wasn't talking about 2020-20?? when the Fed had the money printer on overdrive he was talking about the 2020's/ 30's and beyond. He thought 4% was what we would average. Yea 4, not 15 not even 8. It will take people many more years to accumulate savings like we have seen since the 1990s. Seeking returns that can "enhance" your overall portfolio with things like options is a great way to position yourself for the decades ahead. Note that I said enhance not replace you want to use options leverage properly.

A great way to step into options is by paper trading. Brokers like TDA allow for you to set up and trade with monopoly money first before gettin into the real trades. An extensive self directed education plan on options is not necessary to become successful. As someone said it is possible to keep it simple while still managing risk.

[Anonymous]

If you play options, then sell only covered calls. Never sell naked calls.