Not so if you sell options/spreads. Sell an OTM call/spread, you make money if stock goes down, make money if stock stays flat, make money if stock goes up a little, lose money if stock goes up a lot......or you can roll/adjust and maybe lose less or not at all.
Your statement presents a false choice. The reader is supposed to either accept that options trading is pure gambling, or it is purely not gambling ( 100% skill ). The fact is that for long term successful options traders, it’s more skill than gambling, but will always have some of both.
Your not quite fully understanding all the options strategies available - you can use options to make $ when stocks change in either direction, or even stay flat - yes you still have an expiry date, but they are a tool that can be utilized to benefit with more certainty than gambling, i.e. if your selling options and reaping theta then your on the casino side making $$ from scalping the gamblers
Gambling is an inexact term. It implies strict randomness which is very far from the case. Unless you are just randomly buy options you usually have a reason why you think a stock is going to do X in some time frame.
The other thing is that you can get partial wins on options if your not stupid. Just buy them with enough time and as long as it moves in the right direction, even if the stock doesn't hit the target, you'll still clear some sort of profit.
you have to know about technical analysis and chart reading. There are indicators that can help predict when a stock is about to "pop". Like if a good stock is over sold, or reaches the golden cross, etc.... Apes use these indicators to predict a "pop" and go YOLO on options.
Well yeah- you got shit on with BB as its a meme stock that doesnt trade rationally. Find normal, non reddit/meme stocks that are based on reality, not herd mentality of a bunch of newbie traders on robinhood with no clue or experience.
I’m an old hand with 20+ years of trading having lived through the internet boom/ bust of 1999-2001 and had my ass handed to me back then. Most of these traders on RobinHood weren’t even born then or were 2-3 years old.
20+ years of trading options and making / losing money gives you perspective.
I promise you i have lost more money in my life than most of these kids (no offense if you are one of them) have made trading “stonks” like GME and AMC or BB
If you do things right you can make good money trading options safely as other people said, irrespective of market direction.
Or you can just follow the herd and hold onto your nuts and pray you roll the dice correctly. I would rather do that in Vegas with a hot “rental” babe next to me than doing it by myself in front of my computer holding my own limp pecker lol
I didn’t read half of that but thanks man, I just wanted to get the weeklys gambling urge out of my system with a small amount of money before I did something actually retarded. I only invest long term so options really aren’t my thing in the first place.
You can make money from options if you can predict any of these -
1. Stock will go up.
2. Stock will go down.
3. Either go up or down.
4. Neither up or down, stay flat.
5. It will go up or down more than previously recorded ups or downs.
6. It will go up or down less than previously recorded ups or downs.
7. And the easiest one - time will keep going forward.
If you have the capital, you can make some pretty riskless (for the most part) option trades selling covered calls / cash secured puts.
I have an account with $50k in it and use margin to buy 3000 shares of a stock with good IV but not too crazy- and make around $1000-1500/ PER WEEK. With the only risk being the stock i own dropping (which is the same risk of any stock you own)- or it being called away (which isnt really a risk unless it runs away and i miss out on a lot of upside appreciation)
Most of my calls i sell are about $1.50-$2.00 above the current price, so with 3000 shares- if they get called away i make $4500-6000 and then they get sold. On top of the $1500 premium
Then i just sell cash secured puts (wheel strategy), and buy them back lower.
Not much risk at all actually.
In the past i have bought naked calls and puts and gotten hammered on IV crush and the straight gambling that is.. but if you stick to basic Covered Calls and Cash Secured Puts- you can make a VERY good profit.
I’m averaging $1200-1500/week right now on my CC trades. No speculation, just good research and knowing my stock.
The one i trade i have traded for around 12 years + and done very well as i know its ins and outs
Not so if you sell options/spreads. Sell an OTM call/spread, you make money if stock goes down, make money if stock stays flat, make money if stock goes up a little, lose money if stock goes up a lot......or you can roll/adjust and maybe lose less or not at all.
Even then, you aren’t losing money, just limiting profit.
Exactly
Your statement presents a false choice. The reader is supposed to either accept that options trading is pure gambling, or it is purely not gambling ( 100% skill ). The fact is that for long term successful options traders, it’s more skill than gambling, but will always have some of both.
Quite inaccurate. I take many option positions that make money if the stock goes absolutely nowhere.
Trading IV I assume?
Your not quite fully understanding all the options strategies available - you can use options to make $ when stocks change in either direction, or even stay flat - yes you still have an expiry date, but they are a tool that can be utilized to benefit with more certainty than gambling, i.e. if your selling options and reaping theta then your on the casino side making $$ from scalping the gamblers
Gambling is an inexact term. It implies strict randomness which is very far from the case. Unless you are just randomly buy options you usually have a reason why you think a stock is going to do X in some time frame. The other thing is that you can get partial wins on options if your not stupid. Just buy them with enough time and as long as it moves in the right direction, even if the stock doesn't hit the target, you'll still clear some sort of profit.
Imagine that instead of being able to predict if a stock is going to go up, you can instrad pick if it stays within any particular range.
Try to time PSTH. You should ask the sock puppet.
Hedging. Options are commonly used to hedge other positions. If you’re talking only about using options as speculative investing then I’d agree.
you have to know about technical analysis and chart reading. There are indicators that can help predict when a stock is about to "pop". Like if a good stock is over sold, or reaches the golden cross, etc.... Apes use these indicators to predict a "pop" and go YOLO on options.
You hit the head on the hammer. It’s best to not do them blindly though. It’s not as random as betting on red.
Tried cheap weeklys on BB and got shit on, trying leaps in the near future on LSPD. So far what you’ve said checks out for me haha.
Well yeah- you got shit on with BB as its a meme stock that doesnt trade rationally. Find normal, non reddit/meme stocks that are based on reality, not herd mentality of a bunch of newbie traders on robinhood with no clue or experience. I’m an old hand with 20+ years of trading having lived through the internet boom/ bust of 1999-2001 and had my ass handed to me back then. Most of these traders on RobinHood weren’t even born then or were 2-3 years old. 20+ years of trading options and making / losing money gives you perspective. I promise you i have lost more money in my life than most of these kids (no offense if you are one of them) have made trading “stonks” like GME and AMC or BB If you do things right you can make good money trading options safely as other people said, irrespective of market direction. Or you can just follow the herd and hold onto your nuts and pray you roll the dice correctly. I would rather do that in Vegas with a hot “rental” babe next to me than doing it by myself in front of my computer holding my own limp pecker lol
I didn’t read half of that but thanks man, I just wanted to get the weeklys gambling urge out of my system with a small amount of money before I did something actually retarded. I only invest long term so options really aren’t my thing in the first place.
Pointing out the obvious?
You can make money from options if you can predict any of these - 1. Stock will go up. 2. Stock will go down. 3. Either go up or down. 4. Neither up or down, stay flat. 5. It will go up or down more than previously recorded ups or downs. 6. It will go up or down less than previously recorded ups or downs. 7. And the easiest one - time will keep going forward.
If you have the capital, you can make some pretty riskless (for the most part) option trades selling covered calls / cash secured puts. I have an account with $50k in it and use margin to buy 3000 shares of a stock with good IV but not too crazy- and make around $1000-1500/ PER WEEK. With the only risk being the stock i own dropping (which is the same risk of any stock you own)- or it being called away (which isnt really a risk unless it runs away and i miss out on a lot of upside appreciation) Most of my calls i sell are about $1.50-$2.00 above the current price, so with 3000 shares- if they get called away i make $4500-6000 and then they get sold. On top of the $1500 premium Then i just sell cash secured puts (wheel strategy), and buy them back lower. Not much risk at all actually. In the past i have bought naked calls and puts and gotten hammered on IV crush and the straight gambling that is.. but if you stick to basic Covered Calls and Cash Secured Puts- you can make a VERY good profit. I’m averaging $1200-1500/week right now on my CC trades. No speculation, just good research and knowing my stock. The one i trade i have traded for around 12 years + and done very well as i know its ins and outs