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Ask HN: Do You Trade Options?

6 points by pcbro141 ↗ HN
There must be options traders and wallstreetbets users here. Let's talk about it, I know there are many smart people on HN. Maybe you could share some good readings, strategies, tips, stories of big wins and losses. Anything really. I'm just curious about your experiences with options trading.

10 comments

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amerkhalid
I do sometimes, usually Iron Condors and vertical spreads. But I had a bit of luck last year and made ok money from options. But then this year I gave it all away and then some.

I would still trade them but not as much as before. I think the mistake I made this year was that I tried to really go deep into mathematics and probabilities. Last year, I literally, browsed /r/wallstreetbets and other Internet forums and made biases usually around earnings.

srckinase123
Just wondering, why do you think the previous approach was more successful, as opposed to using mathematics and probabilities?
amerkhalid
Most likely it was my fault. One of the basic strategy I started to use was selling verticals with 68% chance of success with breakeven price at 1 standard deviation away. If you are right you should win $1 but if you are wrong, you lose $2. In theory, you would break even if you do just that (minus commision). But you can increase your odds of win by closing positions at 50% of max win or loss. You can further read news and reddit and close your positions earlier if something seems off. However, a lot of training videos such as TastyTrade said that news should be already reflected in the prices, so it should not require too much attention.

The mistake I made was probably because I pretty much ignored online forums, news, etc. Maybe I started to read too much about algotrading and wanted to automate my trading.

Last year, all I did was look at upcoming earnings, search each company on reddit, /r/wsb, Twitter, etc. If it seemed people are expecting that company will beat estimates, sell puts spread that is expiring same week. Due high volatility before earnings, you can earn decent premium even with only a few days left before expiration. Also since we have been in bulls market, so I selling puts was kind of safer bet.

giantg2
Yep. My DIS call this morning was bananas.

Tasty Trade has good videos. Investopedia is good. Reddit /options is good.

bratak
Stopped trading Options. Volatility is way out of whack. Everything seems to go beyond 2 or 3 Standard Deviations. So, to make money consistent with Options, you need a trading strategy which predecits the direction. But then, you can trade the underlying, because trading Options usually means, trading for income, not speculation.

However - I've developed other skills: a) Long Term Strategy: COT Trading (Committment Of Traders). I suggest you read Larry Williams about COT Trading - Google it!

b) Intraday Scalping: Develop a winning strategy, test it to prove yourself you can make money, and then trade it live, but not with your money. Go to TopStep Traders, invest a couple hundred bugs and see if you can make money consistently. If not, you only burn a couple 100s, and not 1000s

Hope this helps Wish you good luck!

rajeshp1986
How to learn Intrady Scalping? Any resources?
bratak
on YT, there is a real Scalper called "Trades by Matt".

Channel: https://www.youtube.com/channel/UCAiadqtIuxMOBbzMHGk_aYQ

Strategy Video: https://www.youtube.com/watch?v=nRKXylSlNCY

Know the following: - to become a firm Trader, you should trade at least 6 Month in a Demo Account. This is to proove yourself that you can make it, at least in Demo.

- Matt's strategy is maybe not suitable for you. Maybe you like more Swing Trading on longer timeframes.

Be realistic with yourself. Imagine becoming a Pilot, or a Doctor. To make money in these jobs, you have to go through a learning process that takes years. So, don't fool yourself by thinking you can become a profitable trader within a couple weeks.

If you are new in Trading, be aware that over 90% of "Coaches", Strategies etc. is fake - they just want your moeny. Matt instead is real.

I suggest you take at least 2 Months, watching Matt's stream live, watch hes recorded sessions. Take another 2 Months for research about the different trading strategies, and while on the way, don't believe anyone what they say. Don't get blinded by the $$$ they promise. Don't buy anything, even if it sounds firm.

You should read two Books from a real Prop Trading professional:

One Good Trade:

https://www.amazon.com/One-Good-Trade-Competitive-Proprietar...

The Playbook:

https://www.amazon.com/PlayBook-Inside-Think-Professional-Tr...

Hope this helps & good luck.

visox
I do trade VIX if that counts... It goes well,except when it does not.
thorin1
I have some AAPL and MSFT stocks and selling covered calls. They almost never get exercised. It's small but steady income.