Traded options

[bengalgooner]

Wish to learn how to trade options successfully- any ideas? Courses , books etc

[XJ75]

This is a popular book in the industry and I like it:

https://www.amazon.co.uk/Options-Futures-Other-Der...

It doesn't really cover how to successfully trade options but will explain in detail how they work, how they are priced etc.

[sideways sid]

Try 'Trading Volatility' by Colin Bennett.

It is interesting and illuminating, and I wish I had read it when I started trading options.

[limpsfield]

bengalgooner said:

Wish to learn how to trade options successfully- any ideas? Courses , books etc

I do this - selling rather than buying though, and mainly fx options. Have you ever traded anything before? It could be a bit of a steep learning curve.

This guy's website can be a good place with free resources.

http://www.optionstradingiq.com/about/

What sort of markets and time frames were you thinking of?

[anonymous-user]

Have a look at the stuff at www.tastytrade.com

Here is their basic training

https://www.tastytrade.com/tt/learn

[Condi]

limpsfield said:

I do this - selling rather than buying though, and mainly fx options. Have you ever traded anything before? It could be a bit of a steep learning curve.

Please explain? How can you trade options, 'selling rather than buying'?? Either you're granting unhedged options, which is the easiest way to bankrupt yourself Ive ever heard of, or you're not trading options....

[limpsfield]

Condi said:

limpsfield said:

I do this - selling rather than buying though, and mainly fx options. Have you ever traded anything before? It could be a bit of a steep learning curve.

Please explain? How can you trade options, 'selling rather than buying'?? Either you're granting unhedged options, which is the easiest way to bankrupt yourself Ive ever heard of, or you're not trading options....

Yes, granting or writing or selling options. Short straddles mainly which builds up a profit zone but does have, as you suggest, a much higher risk than buying options.

http://www.theoptionsguide.com/short-straddle.aspx

Although I can think of much easier ways of bankrupting yourself!

Edited by limpsfield on Sunday 19th November 12:56

[Condi]

limpsfield said:

Condi said:

limpsfield said:

I do this - selling rather than buying though, and mainly fx options. Have you ever traded anything before? It could be a bit of a steep learning curve.

Please explain? How can you trade options, 'selling rather than buying'?? Either you're granting unhedged options, which is the easiest way to bankrupt yourself Ive ever heard of, or you're not trading options....

Yes, granting or writing or selling options. Short straddles mainly which builds up a profit zone but does have, as you suggest, a much higher risk than buying options.

http://www.theoptionsguide.com/short-straddle.aspx

Although I can think of much easier ways of bankrupting yourself!

Edited by limpsfield on Sunday 19th November 12:56

In that case I genuinely wish you the very best of luck....

You wouldnt find many pro's trading like that. I trade options for a living, albeit within a bigger and much more diverse book, and they're great tools, but no way would I leave myself so exposed, especially trading FX. The market can move much much quicker than you can, and your losses are totally unlimited on either side, for a pretty small premium.

Serious question then - I presume you will have had a position during the Brexit vote? How much did you lose when the market swung by such a huge amount?

[limpsfield]

Condi said:

You wouldnt find many pro's trading like that. I trade options for a living, albeit within a bigger and much more diverse book, and they're great tools, but no way would I leave myself so exposed, especially trading FX. The market can move much much quicker than you can, and your losses are totally unlimited on either side, for a pretty small premium.

Serious question then - I presume you will have had a position during the Brexit vote? How much did you lose when the market swung by such a huge amount?

Nope didn’t trade over Brexit, far too much risk.

At the moment you can get around 250 points for a straddle around five weeks out in GBP/USD so to me that is a reasonable buffer.

I know quite a few people who trade this way. I have been doing it since 2005 - only serious painful loss was the Lehman bust in the financial crisis with a corresponding significant gap lower in the S&P which wiped out quite a few months of profit. Whilst I enter the position naked I do look to hedge the wings if I can as the time runs out to eliminate the unlimited risk aspect, but of course not usually ending up in a totally risk free position.

[Condi]

limpsfield said:

At the moment you can get around 250 points for a straddle around five weeks out in GBP/USD so to me that is a reasonable buffer.

Each to their own, but I'd much rather be running a book and trading the time/volatility and the market spreads than writing unhedged puts and calls.

OP - Spend some time learning about how options work, and what you're actually trading.

[limpsfield]

Condi said:

Each to their own, but I'd much rather be running a book and trading the time/volatility and the market spreads than writing unhedged puts and calls.

I trade that too - none of this stuff is mutually exclusive, it doesn't have to be a binary choice, pardon the poor pun. But historically for me it's selling the straddles that delivers the best returns. I think from memory on here you are quite new to trading? Most of the guys I know who do what I do are old farts like me.

Edited by limpsfield on Sunday 19th November 16:21

[Condi]

Ive been on the desk 4 years, and I trade options as part of a physical book, rather than 'trading options' per say. Certainly not a market maker.