Any suggestions?
Don't trade stock options breh...
- Thread starter LionofJudah
- Start date
also one thing that went over my head when i was reading about options is that the price of the options fluctuates, so the stuff about the mechanics of options is to certain extent unimportant.
the way i look at it, the options market is like a twilight zone where the same stocks you see normally have wild fluctuations daily
the reason you can make so much money in options is that if you buy an options contract it can go up 30 40 percent in one day. of course you can also go down 30-40 percent a day, but the thing is you if you do go down you simply sell the contract and what you have lost is the premium (the amount you invested). but because of the mechanics of options the premiums are relatively small compared to the upside, so you can actually dabble with tens and hundreds of dollars and make thousands, in theory and you can actually afford to lose the premiums if you dont get too crazy
so for example I had happened to buy 1 share of nokia for 5 and change. but then when i was playing around with options i brought 5 call options at 5.50 strike price for Sept 14 on the nokia stock which costs me 25 dollars, in a week the price of the options contract had gone up by more than 100 percent so 25 had turned into 100+ in a few days. which is crazy. meanwhile the original stock was up by 30-40 cents. So if i had invested the $25 on the regular stock I would have made about a dollar but I made more than $100 on the options
but anyways that is where the money comes from, its on the wild fluctuations of the price of the options...i didnt get this before, now i do. for some reason i thought you made money when the contract expired
the way i look at it, the options market is like a twilight zone where the same stocks you see normally have wild fluctuations daily
the reason you can make so much money in options is that if you buy an options contract it can go up 30 40 percent in one day. of course you can also go down 30-40 percent a day, but the thing is you if you do go down you simply sell the contract and what you have lost is the premium (the amount you invested). but because of the mechanics of options the premiums are relatively small compared to the upside, so you can actually dabble with tens and hundreds of dollars and make thousands, in theory and you can actually afford to lose the premiums if you dont get too crazy
so for example I had happened to buy 1 share of nokia for 5 and change. but then when i was playing around with options i brought 5 call options at 5.50 strike price for Sept 14 on the nokia stock which costs me 25 dollars, in a week the price of the options contract had gone up by more than 100 percent so 25 had turned into 100+ in a few days. which is crazy. meanwhile the original stock was up by 30-40 cents. So if i had invested the $25 on the regular stock I would have made about a dollar but I made more than $100 on the options
but anyways that is where the money comes from, its on the wild fluctuations of the price of the options...i didnt get this before, now i do. for some reason i thought you made money when the contract expired
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its great for now, i am learning how to use it, but i think i will have to switch to td ameritrade. i need a way to put a stop loss on options so i can lock in any gains, cuz the fluctations are crazy, its seems robinhood doesnt let you do that
Free Investing App Trend Sees JPMorgan Join As First Big Bank; Charles Schwab, TD Ameritrade Falli have many bank accounts breh,why do you ask?
Meh, that free trading from JP morgan has a bunch of small print, its not really free, the whole story is actually pathetic considering the industry laughed at Robinhood and said they were bound to fail,
And now robinhood has free option trading, nobody is really touching robinhood,
from what i hear TD Ameritrade has the think or swim platform in which you can trade just about anything and is the best platform to trade in, so i dont think robinhood is a threat to other platforms, you still need to upgrade to to the complicated trades
Beleive it or not, I actually read that story the day it came out and saw when td ameritrade stock dropped but I thought the whole story was bs and td ameritrade was going to go back up, so I brought TD Ameritrade options the day the story came out and i made money. I brought a 59.5 call for Sep28 for $80 and now its worth 135, So I made $55 in whole week,, way more than I would have if i had brought the actual stock. So this is a perfect example of how if you have an idea of where a stock is going it makes more sense to buy the option
It’s whatever you want, on robinhood they have options that expire in 2019 and 2020
You don’t have to keep the option until expiration date
Bboystyle
Bang Bang Packers gang!
Yea i just got robinhood and i can buy and sell covered options. Is that pretty much the basic option everyone uses or are naked options better?
Ive done day trading and penny stocks before but now getting into options trading.
You are ahead of me, what are naked options?
I thought robinhood didn't have penny stocks. Do you use another broker for them?
Bboystyle
Bang Bang Packers gang!
I haven't actually traded in a while. I had sharebuilder before they was bought out by capital one.
I'm considering Charles Schawb but they have minimums.