Why Equities Traders Are Having Such Unusual Success Trading Options

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Comments

peroksid says:

This remind me about the best trade I have done so far.
It was at 1 april 2019 on Bitcoin. The four previous month(from December to April) Bitcoin was traded in a range between 3200 – 4200. And at the end of March the price climbed to resistance of 4200. It was higher lows. Triangle formation. I realized that a big move is comming very soon and I need 2 or 3 days to catch it.
And I have found a crypto exchange with options. And there was options with expiration date at 4 April. And they was very-very-very cheap.
8 $ per option with strike 4500.
They was cheap because the expiration date was very close and because previous months volatility was low, so Implied volatility is also was low. The seller of options didn't expect a big volatility, that is why they sell options at cheap prices.

I bought 5 options, 8$ per option, so 40 $ was my total risk. And the move was in the next day – Bitcoin skyrocketed to 5000.
So I was in profit of 2500 $

current_price(5000) – strike_price(4500) * 5(number of my call options) = 2500 $

Brian Crouch says:

I'm surprised anybody at SMB has a bullish position on BYND. Oct 29th looks like a definite cliff.

razzy p says:

Definitely agree that hiking up your next step in your training is to know about Options.Its another tool in your bag!. Managed well options can make you a shit load of money on less capital..but the word is understanding direction and management of the options.

Kenneth Ma says:

Agree 100% to Steve. I think when you start getting how options works, the stock market no longer a directional market (i.e. Up or Down) and more have to care of the volatility, the time decay, delta etc. This opens up a lot of new opportunities for different situations.

Chong Gui Zhao says:

Would you consider Synthetic positions for your directional trades to get leverage on your trade while overcoming theta decay in a swing trade situation?

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