July 1, 2013 at 10:58 pm

Avatar of conloz
Trader
Joined: Jul. 2, 2013 Posts: 1

never had anything to do with option trading.. can someone please let me know a bit about it?
Also trading in futures is this similar to options?

July 2, 2013 at 5:38 am

Avatar of isye
Trader
Joined: Jul. 2, 2013 Posts: 1

It is complicate trading you need to read the book about that first. Frankly, the option is the insurance contract to protect your profit from buying the stock, which now the people can sell or buy that insurance. And making money from option.

July 2, 2013 at 8:47 am

Avatar of ismahil
Trader
Joined: Jul. 2, 2013 Posts: 4

The question is, how to make profit from options?

sy

July 2, 2013 at 10:43 am

Avatar of moderatorval
Forum_Admin
Joined: May. 30, 2013 Posts: 54

Hi Conloz, the options universe is vast, so I’m going to give you some very broad principles. There are a couple of ways you can trade options, which Isye touches on:

1. You can use options to protect your current long stock holdings or generate additional income on them.

2. You can trade options on their own values (the traditional “buy an option low and sell high” principal). You do this by buying call options on stocks you think are going up and by buying put options on stocks you think are doing down. As the corresponding stocks move up in value, your call options should also move up in value. As a corresponding stock moves down in value, your put option should move UP in value.

As I said, those are two very, very general strategies, but if you’re interested in learning more, here are a couple of beginning resources:

http://investorplace.com/2012/04/what-are-options/

http://investorplace.com/2012/04/options-trading-strategies/

http://investorplace.com/2012/04/what-are-options-contracts/

http://investorplace.com/2012/04/common-mistakes-to-avoid-when-trading-options/

If you own long stocks, selling covered calls is a great way to begin using options and it’s considered a very conservative type of trading that you can even do in retirement accounts.

http://investorplace.com/2013/06/options-basics-how-to-sell-covered-calls/

Regarding futures, simply put, while there are some similarities, as you’re getting started it’s best to take the view that options and futures do not trade the same way. They have very different rules and capital requirements.

Hope this helps!

“Everyone must choose two pains: The pain of discipline, or the pain of regret.” Jim Rohn

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