Where can I find an advisor for a career in options trading?

September 12, 2010 by  
Filed under Option Trading

I think I would like to have my next career be as a self employed options trader.

After a 14 year career in the Engineering and IT world I moved last year into a career in finance, specifically as a commercial lending officer for a large credit union ($1. 5B. ) My education career started in Engineering (including 19 hours of Calculus and linear algebra) but my actual undergrad is a BBA. My IT education includes 4 advanced self taught certifications. I started investing in CD’s, stocks and bonds in 1990, added covered call options in 2000 and long call options in 2005. Even though I had never worked in the finance field, my amateur interest in the financial markets is great enough that senior management asks me my opinion on current issues and trends because of my constant exposure.

As part of my job requirement I will be starting an MBA in September and my course of study is up to me as long as I am working on the graduate degree. Due to my pre-existing interest, heavy coursework in finance, securities and financial math would not be unusual. For political reasons I have to stay in this job for 4 years but I effectively have the opportunity, means and permission to rebuild myself with an eye toward starting on a career in the world of options should I so desire.

I know that during my studies I could ask the professors and advisors about this but I would much rather find someone who is actually doing this to help me structure my courses and studies (formal and self taught) so that while I am being paid to learn I can be learning the things to help me most.

As some here have seen (and answered my questions) I have at least some understanding of options trading. I have found what I think it an effective day trading strategy but it has the significant problems of being unable to scale and requiring constant attention to prevent being on the wrong side of a trend. I need to really learn to do spreads and other long term positions so I can make thousands on a longer term position instead of the $100 per round trip in 15 minutes I target today and not have to watch every minute move from 9:30 to 4:00 all day worrying about missing an instantaneous buying or selling opportunity.

I would very much appreciate it if somebody who has had success in the area of options investing can help me to learn what I need to learn to have the mental tools and experience to be able to seek a career in this arena or barring direct help, help me to find someone who can guide me on this. I don’t think I am asking for a lot of someone’s time but I certainly think it can’t hurt to ask for some help rather than waste money on books or seminars flailing about trying to find that one needle in the haystack of information otherwise uselss to me.

Feel free to contact me directly should you be so inclined.

Thanks in advance for any help provided.

Trading Option Greeks Ebook – What 3 Important Clues the Options Trading Greeks “Delta” Tell You

September 3, 2010 by  
Filed under Option Trading

Trading Option Greeks Ebook

The options “delta” is one of the important component of the options greeks. As you might have already known, the options greeks offer you clues to the likely behavior of an option’s price movement in relation to the corresponding price movement of the underlying share.
Besides the delta, the options greeks also include other components such as the theta, gamma, vega & rho etc. In a nutshell, an options delta is basically a measure of the change in the option price resulting from a change in the price of the underlying stock. The delta is usually expressed as a decimal value in the range of between 0. 00 to 1. 00. The other components of the options greeks are also represented in decimal value. In this article, we would explore the 3 critical information that the options delta could reveal to an options trader so that it would give him or her a clearer picture of the potential price movement of the options so as to help him or her make a better options trading decision.
The first information that an options delta could reveal is that it could tell the options trader the percentage chance of an option trade. This percentage chance refers to the percentage chance in which a particular option would end up in-the-money. By the way, when an option goes in-the-money, it would be said to have attained “intrinsic value” and thus would be worth some value to the options trader when he or she either sells the options position or exercise the option. Thus, an option with a delta value of 0. 80 would mean that it has a 80% chance of finishing in-the-money. Trading Option Greeks Ebook
The second information that the options delta provides is the percentage change that an option trader would expect of an option position. This means that the delta would determine the percentage change in the options price movement in relation to the corresponding change in the price of the underlying stock. For example, an option with a delta value of 0. 60 will move 60% of every one-point movement of the underlying stock. If the underlying stock moves $1. 00, then the option would move $0. 60. So if an option has a delta value of 0. 90, the option would move $0. 90 on every $1. 00 movement in the underlying stock; I guess you get the point.
The last important information that the options delta can provide is the hedge ratio, which is the amount of deltas needed to properly hedge a particular trading position. For example, an investor who wants to implement a delta-neutral strategy may buy up 100 shares of the underlying stock and hedge the position with 2 nos. of at-the-money put option which have a delta value of around 0. 50 each. Since the underlying stock has a delta of 1. 00 and the delta value of the 2 put options would add up to the delta value 1. 00 too, this would thus establish a delta-neutral trading position.
As mentioned earlier, the options delta is an important component of the the options greeks which could tell an options investor how to determine the likely price movement behavior of the options in relation to the corresponding price action of the underlying stock. The delta basically determines the percentage chance, the percentage change and the hedge ratio requirement of an option trading position. Thus, the options trader is advised to take a look at this important component of the options greeks the next time he or she make a options trading decision. Trading Option Greeks Ebook

Always dream of being Rich? Never able to make a Consistent Profit through trading?Get your Trading Option Greeks Ebook and be Successful forever!Try this Slackers Trading and be Financial Free in 6 Months!

Options Trading Profits – Never Compound Option Trading Profits

September 2, 2010 by  
Filed under Option Trading

Options Trading Profits
Compounding is one of the most common mistakes made by an options trader when they are making long-term investments. It consists of putting profits back in to the investment, so that the profits can earn profit too. This is great strategy if you are a stock trader; many people have made their fortunes through re-investing profits, but for an options trader, it is extremely risky. If you compound your profits you will also be compounding your losses, and you may end up with nothing as you are dealing in leveraged stock options.
If you are looking for a long-term stock options strategy, you should be considering LEAPs call options. These options expire between six and twelve months in the future. They offer a simple way of making a long-term investment in stock options, without the need to compound monthly. LEAPs allow investors to make money in a leveraged style from the same movements in underlying stock that stock traders benefit from, but without having to use as much money. When you are making such a long-term investment is can be seriously detrimental to compound your profits. Options Trading Profits
Here is a sample scenario of what could happen:
Imagine you have decided to invest one thousand dollars into the January 2008 options of a particular company. It is trading at ten dollars on January 1st 2007, and the ten dollar strike price LEAPs call option (JAn10call) expiring in January 2008 can be bought for two dollars. You invest your thousand dollars and buy five contracts. When January 2008 comes around, you find that the company stock is doing well and it is trading at twenty dollars when the Jan10call expires, giving the LEAPS call options a value of eighteen dollars. You sell the LEAPs call options and get an 800% profit, because you make five hundred times eighteen dollars, or nine thousand dollars. A stock trader also buying at ten dollars would only have made 100% profit.
You believe that the company will continue to do well, and decide to compound your interest. You put your entire nine thousand dollars back into the company; into the twenty dollar strike price LEAPs call options (Jan20call) which will expire in January 2009. These are again two dollars each.
Unfortunately things don’t go as well this time, as at some point, almost every company will go through a rough patch and take you by surprise. In this case, lets assume the stock fell to nineteen dollars as the Jan20calls expired. As an options trader you have just lost all your money – including all the profits you made the year before. A stock trader would only have lost the dollar difference. You are left with zero. Options Trading Profits

Always dream of being Rich? Never able to make a Consistent Profit through trading?Get your Options Trading Profits and be Successful forever!Try this Slackers Trading and be Financial Free in 6 Months!

Next Page »