The increased commissions, expiry, and delta and theta only increase pressure on options trading. Imagine taking your current day trading success rate, and dividing it by two. That's how bad day trading options is. It's basically binary options trading; you're making all-or-nothing poker bets.
Unlike day trading, where you can still follow some oscillators to a reasonable amount and close whenever something goes wrong, unless you're trading extremely expensive, ITM options, you can get locked down by curves that don't move enough. The commissions don't help in allowing you to just flip contracts, as they take out a large portion of your gain already.
Cheap options are usually OTM that have a delta of, say, sub-40 or so. That means that for every 10c stock price move, it will give you about 2c in options value. You need to be very sure that your stock moves by a lot each curve, or else, you can get locked down.
Deltas of 50 or more are better, but, they can easily cost over $100 per contract. Not really desirable.
Holding short-term options overnight is not recommended as theta depreciates the option's contract value at an astounding rate (as it's short-term).
You can reduce the pressure by buying longer-term contracts (several weeks at least), that have a reasonable enough price per contract, and a good delta.
Options have four different ways to trade, as opposed to stocks. You "buy" Call or Put options, which are just bets on whether the stock will go up (long), or down (short), respectively. However, you can also "short" Call or Put options, which is effectively the opposite, but with margin involved.
Take my advice: Don't trade short-term options. Target options that are at least a month in expiry. That way, even if it flops on you, you can hold it.
Lastly, if your trade flops, depending on the intensity of how bad of a prediction it was, sometimes, delta drops so fast that people can literally lose faith in the contract, and, even if the stock recovers, the delta doesn't, causing the contract to be unable to return to its original worth.
One common strategy to employ is paring out the contracts to bring down its price, however, this only increases your risk. Major corporations employ option spreads and iron condors, as well as other strategies.
The problem really just boils down to commissions, though. You're immediately at the losing end as soon as you open a position, and need to earn anywhere from 10-20c or more in stock price movement to be able to just pare it out. Hence, it's best to invest in long-term options, and not short-term.
You can make too much money with Binary Options and you have to ways for that: learning to do very well or as you can see clicking the link below: ( http://forexsignal.kyma.info ) The most important thing is that if you have the right programs and you study the right stuff you WILL success in this buisness! This course explain everything you need to start a very profitable trading activity.
You can't succed in binary trading without a strategy, a good method to follow and some kind of software support. They program I use is called "Autobinary signals". It helps finding loopholes for guaranteed returns. It's very easy to use and I'm earning good money. You find all the details on this site: http://tradingsignal.toptips.org
Yes, Of course. It is really amazing trading to make profits. You do not have to wait for months in this type. You just need to find a trustable broker and ways to read trading signals. Check it http://expertoptiontrading.com/amember/g... for trading signals. It is a good source of learning and trading.
Hello!
I have a few years of experience of day trading stocks, like AAPL and AMZN.
I don't have lots of capital, so I am thinking of day trading "weekly options".
But before I engage, I want to make sure it can be profitable.
Has anyone seen a person who has been consistently making profits in day trading weekly options?
PS: I am only talking about trading options from "buy to open" to "sell to close". I can't afford to sell options to open.
