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  #21  
Old 20 July 2018, 22:22
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I'd highly, highly recommend that you not do it.
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  #22  
Old 20 July 2018, 22:23
kosty kosty is offline
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Quote:
Originally Posted by dagger0824 View Post
As long as you 'sold to close', then you don't have any obligation if the buyer decides to exercise the contract. Problem solved.

Even if you wanted to 'sell to open', don't most brokerage companies require you to own the shares in the event someone exercises the contract?
No, they do not. Those really big returns are unlikely for anyone who doesn't have a margin account. Which means you can lose everything by being a bit careless. What I wrote is correct - you can sell to open, and it's a common strategy, and not a bad option if you are following a strategy that limits risk (like selling a spread, or selling an Iron Condor).

But when someone is thinking of "trying options day trading", they are embracing significant risk of experimenting with choices that the brokerage software allows..... like selling to open.

My brother got a lot of training and made a bundle, following a brokerage defined strategy, turning his retirement into a small fortune.. He purchased an SUV, and a big boat. Grinning ear to ear. Then it went south, really fast. Now his retirement is screwed up.

I got the same training. I wasn't as big of a risk taker. I was making a bit, and then some news cycle drama screwed up all of my positions. I ended up back where I started after a year of slow tedious growth. Now I mostly buy and hold DIA, SPY, & QQQ, along with a selection of recommendations from Motley Fool (fool.com). I'm doing better than when I focused on options.

Last edited by kosty; 20 July 2018 at 22:33.
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  #23  
Old 20 July 2018, 22:34
kosty kosty is offline
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Quote:
Originally Posted by Massgrunt View Post
I'd highly, highly recommend that you not do it.
Ignore everything I wrote.... Follow the quoted advice and you'll do fine.
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  #24  
Old 20 July 2018, 22:38
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Just solely due to the fact that my dumb redneck ass understood less than half of what was said in this thread, I figure I should stick with hard work, my TSP and pray for XRP to go through the roof.... LOL.

Iron Condor? That one really fucked me up. Sounds like something sexual I may or may not have done when I was 17.
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  #25  
Old 20 July 2018, 22:43
dagger0824 dagger0824 is offline
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Quote:
Originally Posted by kosty View Post
No, they do not. Those really big returns are unlikely for anyone who doesn't have a margin account. Which means you can lose everything by being a bit careless. What I wrote is correct - you can sell to open, and it's a common strategy, and not a bad option if you are following a strategy that limits risk (like selling a spread, or selling an Iron Condor).
Never knew how easy it was to get Level 4 access then. My bad.

I think the best strategy to play it "safe" if you're trying to get your feet wet, would be to purchase ITM or slightly OTM calls with an expiration of 6 months out with a strike price within 5-10% of the current price (assuming you believe the stock will increase 5-10% within 6 months). None of this day trading business.

If you try buying weekly OTM calls because they're cheap, then there's a huge chance you're going to lose your money and learn a hard lesson.
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  #26  
Old 20 July 2018, 22:47
dagger0824 dagger0824 is offline
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Originally Posted by Sharky View Post
Just solely due to the fact that my dumb redneck ass understood less than half of what was said in this thread, I figure I should stick with hard work, my TSP and pray for XRP to go through the roof.... LOL.

Iron Condor? That one really fucked me up. Sounds like something sexual I may or may not have done when I was 17.
An Iron Condor is just an investment strategy that won't make any sense until you understand calls/puts/strikes, and the dangers of "selling to open" while margin trading. In essence, it's intended to minimize risk while earning a modest profit.

I'm not an expert and hope I didn't butcher my attempt at explaining.
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  #27  
Old 20 July 2018, 23:13
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I met Leo Melamed very briefly in the early 90's. He asked what I thought about the CME and his displeasure was evident when I told him that from what I could tell, the CME was just legalized gambling.

While I consider myself to be generally "luckier" than most, (I seem to have it when it's most needed) I learned at a young age that this absolutely did not extend to anything resembling actual gambling, so I don't. I'll be taking Massgrunt's advice on this one. Easy money seldom is, and greed will get you every time.
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  #28  
Old 21 July 2018, 00:03
edd1e22 edd1e22 is offline
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Wait until you hear about the "straddle" lol
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  #29  
Old 21 July 2018, 00:09
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Many years ago the wife & I had a little disagreement, to let things cool down I went to the movies, Standing line I started talking to others in line.
One lady, was talking that she was just in town until she had to go back to work, Long story short the company was in a merger with a another company. I asked what company. At first she would not say. As she was by herself an I was also we sat together during the show. Little by little I found out what two company's they were. We went our separate's way, at the end of the show. When I got home, I call a friend who was a stock broker, an told him what I had been told. I told him to look into it on Monday an buy some stock low an when it got high, Sell it.

Any way if I can remember right it was over 50 years ago, I made about $15,000.00 clear. that all I ever had to do with the stock market. That was good money back then.

Last edited by wildman43; 21 July 2018 at 00:11. Reason: wording & spelling
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  #30  
Old 21 July 2018, 00:47
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Quote:
Originally Posted by Massgrunt View Post
I'd highly, highly recommend that you not do it.
LOL, some how I knew you’d be here to offer that exact advice
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  #31  
Old 21 July 2018, 01:00
edd1e22 edd1e22 is offline
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This is epic options trading

https://www.reddit.com/r/wallstreetb...fb_calls_575k/
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  #32  
Old 21 July 2018, 02:07
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Massgrunt Massgrunt is offline
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Quote:
Originally Posted by Hot Mess View Post
LOL, some how I knew you’d be here to offer that exact advice
You're the only one who listened.

Sharky, check out www.bogleheads.org
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  #33  
Old 21 July 2018, 07:31
Paul85 Paul85 is online now
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Quote:
A good friend's wife was talking about a good friend of hers who quit her job and now is day trading options full time. She made over $2M last year.
Hmm. Not a month passes without me hearing about a friend of a friend who did this and that and paved his/her way to riches. It's often true, even if some of these news are about a single glaring success, sometimes even beginner's luck, and not long-term info.

I don't negate that you might get in and suddenly realize that you were born for this kind of business. So trying could be a good idea. I wouldn't try it with more money that I could comfortably afford to lose, and I would be wary of any sort of gambling fever that sometimes grips people after they've gotten some return and thought they found a golden key to the system. Just a little, small sum. All sorts of trading involve some degree of luck, but fundamentals of how the system works, deep knowledge of all options and immense experience plus previously mentioned luck are required. However, when you have little money in, it will generate little money in return...IMO the more you have in the bigger might be the windfall...and the harder the fall.

I don't do trading now. Had a brief romance with it, decided there are better and less risky options for me to make money, and I left.

Last edited by Paul85; 21 July 2018 at 07:39.
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  #34  
Old 21 July 2018, 08:52
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Quote:
Originally Posted by Sharky View Post
I figure I should stick with hard work, my TSP and pray for XRP to go through the roof.... LOL.
+1.
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  #35  
Old 21 July 2018, 09:13
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As a banker for 30+ years after the military, I saw and heard of lots of get-rich-quick strategies. Many were those who yielded to temptation, and everyone thought they had figured out "the system" to make it work. Many were those who were reduced to penury. Few, very few, made a success of it, and not enough of them to make it a worthwhile venture.

Although tempted, I carefully avoided all the schemes. What nest egg the wife and I have was earned slowly and cautiously over the years. Through careful planning we came through all the crashes, especially the 2008 debacle, with our resources intact.

As others have stated, don't risk any more than you can afford to lose.

We are not wealthy, but we are comfortable and are in a position to remain so.

My 2 cents worth - stick with financial planning for the long haul and avoid the "Hey, you can make a mint with this!" like the plague.
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  #36  
Old 21 July 2018, 13:34
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I went to a few days worth of training on options, but it was basically hieroglyphs to me. I'm neither for or against it, but they did have some advice that I felt was solid. They said that if you decide to get into options trading, to find a trading partner that will be using the same system. People get into trouble when they allow emotion to conflict with their system. It's the same reason Vegas wins...the "gambler" can always FEEL that big win coming. So their advice which I will happily pass on here, is to find a partner so that you can keep each other's emotional input in check.
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  #37  
Old 21 July 2018, 22:14
Max Power Max Power is offline
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Messed around with it years ago. Had some good success but it takes a lot of work and I couldn't keep up with it. Definitely want to get back into it later. Not just for speculation (day trading or momentum trading) but also for income and risk management purposes.

It's fun, but time consuming. Have a system and don't stray from it. It isn't about sticking with a winner, it's about making what you set out to make (profit objective), risking what your comfortable with, with the minimal amount of cash tied up to maintain flexibility (other opportunities, doubling down if the trend is still solid but you timed your entry wrong, etc.). Taking 1/3 out at set gains.

A system will save you and increase the chances of a good result.
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  #38  
Old 23 July 2018, 14:09
bc_ bc_ is offline
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+1

Quote:
Originally Posted by Massgrunt View Post
I'd highly, highly recommend that you not do it.
What he said. ^

Sharky, what are your goals? Retirement? Quit your day job and start trading?

I trade super conservatively with 99% of my money won't be touched for 25 plus years depending on how other ventures work out. My 1% "cowboy money" ironically pulls in an average
gain similar to what my 25yr money does. Great successes & great failures no matter how much I research.

After hobby trading for 5 years, I recommend just have fun with it. Start an account, put a small amount (what you are comfortable losing) into a brokerage account and have fun.

If you are already very wealthy and have enough seed money to lose and start over, that's your call. There is no timing the market no matter what people say.

Best advice I have been given:
-Read "the intelligent investor" (Benjamin Graham)
-It's not when you get into the market, it's how long you stay in the market
-Go with products/markets you know

Full disclosure, my return rate over 10+ years is not stellar, but it beats buying CDs.
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  #39  
Old 23 July 2018, 14:13
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Quote:
Originally Posted by bc_ View Post
I recommend just have fun with it. Start an account, put a small amount (what you are comfortable losing) into a brokerage account and have fun.
That's kinda what I had in mind. Definitely not looking to make it a career. I was thinking like $1500 in an E-Trade account and see what I can do with it. If I lose it, lesson learned, but I learn from it as well. If I make a little money with it, cool, and I still learn from it.
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  #40  
Old 23 July 2018, 14:31
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HighDragLowSpeed HighDragLowSpeed is offline
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Quote:
Originally Posted by Sharky View Post
That's kinda what I had in mind. Definitely not looking to make it a career. I was thinking like $1500 in an E-Trade account and see what I can do with it. If I lose it, lesson learned, but I learn from it as well. If I make a little money with it, cool, and I still learn from it.
You can do the same without money and still learn. Pick your stocks on paper and see how you do. Doing so will help you develop your replicable set of indicators and rules without losing a dime. Better yet, look at past recommendations and the claimed technical indicators they were based on and see how they've done since the recommendation.

This approach is like dry humping but without another Ranger.
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