SIUYA

No. it is a loss.....period. you bought something for one price, if you had to sell it today its worth less. No matter how you rationalise it it is a loss. paper losses/paper profits only mean something to the tax man. While this is different as to what you do with the actual position. DONT confuse the issue with poor rationalizations.

"I can buy the underlying at that price and then sell it right away thru the put options...can this actually be done?" Yes it can be done..... but why would you do that? (I leave that as an open question for you to answer as a learning exercise as you practically answered it yourself with your next comment)

What i think.... I am not sure how you are defending anything here.....??? 1) you got lucky, and yet the training is still mostly on yourself 2) if you where a great trader you would trade and not recruit if you are recruiting and not trading, then you sound like a trading coach. if you are recruiting - who offers the leverage - you or the broker? what exactly is it that you provide. Is it simply that you give the uniformed/lazy/inexperienced easy access? so you act like a middle man. Who covers the losses? Where do you make your money - commissions, desk space, profit share? About the only benefit mentioned seems to be that a computer, internet and desk might be supplied. (so long as these are not charged for), and for that you act as a middle man between yourself and a broker being able to offer some economies of scale. Many would argue that if you cant afford a computer and internet hookup, you dont have enough money to trade, and that if you really need access to super cheap brokerage as a beginner trader then you are over trading.

Cory - I feel the pain of posting losses, it sometimes seems to hurt the ego more than the actual trading of the loss. Remember the market does not care who you are, neither should the anonymous internet. Post for yourself and for others to learn. If you posted nothing but winners people would not believe you. funny huh. However, I appreciate the effort and feel more is learnt from the errors than the wins.

correct. The market does not care who you are, where your entry is, where your stop is. wait for the risk reward entries that suit you. Though there may be traders hunting obvious stops, there is not a global conspiracy of traders out there hunting your stops. (you will always have times your stops get hit then reverse right to the tick, just as you will always have days when you fail to take an umbrella even when you know you should and it then it rains.....another global conspiracy )

here is a guide Traders Laboratory

the first cut is always the cheapest

and thats why i made the distinction!

a lot of this depends on what is defined as a prop firm. is it just a broker, is it a scam to really just double charge brokerage, is it a firm that provides real guidance and backing or a put a bunch of monkeys in a room figuring one or two will make it? For me, prop firms by some definitions dont take enough risk and are more like brokerage firms. If all they do is give you access to trading and you pay them commissions then they are a broker. In my mind no body who is working for a prop firm should be putting their own money down. You can access leverage, systems, data etc without a prop firm. So why then give away your upside. That is why I feel too many prop firms are more scams, or brokerages. The trading firms that I trust and know of, will pay a salary, give you access to risk limits and capital and once you cover the costs (that the firm wears if you get it wrong) then you share the profits. They dont benefit from you paying commission, buying desk space, buying systems, they benefit from you making money. so in short - a broker may be, but generally is not, a prop firm in my book. (eg; interactive brokers, gives you access to a market, access to leverage, a platform, accounts etc etc BUT they are not a prop firm, nor they consider them selves to be. They are a broker)

if you made money trading and were able to spend and save over that period.... sounds like you are in the 5%. if its economically viable it sounds like you should stick to trading...... i dont know the US rules but surely you can combine, advising and trading, that way you can diversify the income enough to decide down the track.

clearly you are not part of the mass exodus of hedge funds leaving due to the high taxes

I used to be discretionary. i switched to more systemised and used both..... personally i am going back to more discretionary - with the help of a system..... This is because I trade various markets - over varying time frames.....equities, FX, futures, and occasionally through in futures. Ideally to build a portfolio like approach, and be best suited to trade the equity (hopefully growing) I would favour the variable % risk.... but i have no evidence to mathematically support why. the best info blog i have seen regards this info is Breakout Bulletin - July 2003 The blog was a wealth of info but sadly has not been updated for a while.

"What do you think it would best way to long the vix thru options?" personally i would stay clear of the Vix - its a derivative on the implied vols..... tough to measure, trade, etc; etc; leave it to the pones who wish to hedge their already existing volatility risk....so i have no further comment on it "Is there anyway to simulate options price evolving?" ??????????

for automated - longer term trend traders. This is not about short term scalping or day trading Deciding on a Backtesting and Trading Platform | Au.Tra.Sy blog - Automated trading System

I agree with you on most of what you say, except this. I used to work on a trading floor and we saw the order flow so I understand the importance to some, and to some trading styles, but I would counter that as Blowfish mentions - its great for scalping. So as you mention its just another tool that may (or maynot ) help for certain styles. However I and others I know have always done better when I get away from scalping and worrying about what the order flow is doing and trade longer term. Larger size, bigger trends, less leverage, less stress and focus NB - this is more applicable to different trading styles and account sizes.

While I appreciate what you are saying and agree with most of it. Just saying what you are saying may not help..... as then you become another person who will say just because you have not done it or seen it then it cant be done. I trust you understand the gist of my gibe. When it comes to day trading I have actually met a lot of traders who use only technical analysis in the way of looking at price action charts. (maybe its a matter of definitions) I have also met lots of arbitragers, market makers,and quants. I have never met a trader who day trades from fundamentals..... but then I might be unlikey to classify them as a trader....more an investor. What about longer term traders who use technical analysis - CTAs, systemised managed futures accounts. (topical now is John Henry and the Liverpool FC club - how broad or narrow is the definition of technical analysis)

"I'm just asking on what criteria we can select these products" Nave - sign up and use the systems. The criteria is personal. Maybe you should work out exactly what you require it to do first. There is not really much other alternative, other than paying someone else to do it. I have spent the last 12-18 months, trailing systems, learning enough of each system, each language to work out what does and does not work for me. I am sure others have similar stories. Every program has a certain amount of differences - what is important to some people is irrelevant to others, so there is no answer to what you are asking. eg; my girlfriend has a porsche 911 turbo..... beautiful car etc. But i would never buy one as I dont like them, I prefer a comfortable car rather than a performance machine. I would suggest you need more than a free demo. Below are some recommendations for ideas.....maybe not 100% accurate, but .... Ninja trader is free until you hook it up to a broker. It uses a C type language. This is a great option to practice on a system that is flexible, free and widely used. It has a wizard to help build and learn the coding. It seems to have a lot of detractors and performance issues recently that are well documented. I initially liked this but found i did not wish to deal with certain issues I did not like with the system. Multicharts or tradestation - similar language, similar systems. But differing opinions by people (sometimes idealogical). I really liked the feel of multicharts, easy language is great, but the system was slight overkill for what i needed, and missing a couple of things. Amibroker, Neoticker - I trailed these but just did not like the feel. They seemed very responsive, in depth and able to be used in a complex fashion. for me i did not like this aspect and was not prepared to put in the time to really get into these systems. Excel - this is an option. Link it into an API into a broker. But why build from scratch Sierra Chart - my current usage. This nails it for me. Apart from a clunky not very pretty look, it seems to fit all my needs. I can learn and improve C++ programing to get complex. the charting is sufficient and stable, and for what i need I can use their spreadsheets to auto trade a few ideas i use. There is a lot of info to cover to really get used to the system, but for me it has been the most comprehensive help files i have found. Plus its cheap. It may also be that only after trailing the other systems did I find this is the one I liked the most. :haha: All the systems work, have a lot of followers and its just a matter of trial and error, and hopefully you come across a system that you like early on.

Those thoughts usually cross my mind before, during and after trading. sometimes after trading I add the expletives. Whatever happens dont feel bad, trading is not for everyone. If you have been doing this for 7 years your knowledge base should be pretty good and maybe you can put that to use.

Cory - "While I like action/activity/stimulation, what I like more/most of all is trading in a way that's profitable, sustainable, ideally low-stress, etc." the holy grail!

Pretty much agree with everything said above. Possibly only adding that given your transition from EOD trading often its important to form the actual decision making process for direction on the higher time frame and just look for the razor sharp/exact entries on the lower time frames. ...... AND DONT MIX them..... this is where you will start to second guess yourself. Once you go down this path you will then find other errors and issues creeping in....all stemming from this one simple thing.

thats a big assumption.....and you know what happens when you assume! shorting options for 2cents is like picking up pennies in front of a steamroller. It seems easy until the day you trip and get flattened. As I said the stock may only need to rally to 80c and those options may be worth a lot more. Whilst the articles suggest the management are sub par. What if the company was worth something to another company without the current management. The stock might be worth $1 plus.....who knows. Approach it on a risk reward basis.....sell at your own risk for those 99 times out of 100 you get it right.....just watch out for the 1 time you get it wrong. Also are you sure the market makers are buying them? maybe market makers are trading with other market makers, or clients with other clients? Maybe they are part of a roll, another hedge....Dont assume anything

I did a little bit of rummaging around, and learnt something today....I got onto the NASDAQ legal and compliance area and realised there is a lot of minimum requirements to stay listed. Maintaining a share price above $1 is one of them..... thanks. Also found this..... The 5 Dumbest Things on Wall Street: Sept. 17 - TheStreet they sound like they are lining their own pockets and it will not be getting back above $1

1) How to tell if a call option is being bought or sold? it not really a matter of this, as for every buyer there is a seller. The question is How do you know if the option is being open or closed? Is it a new or initiating trade? Watch the open interest, ideally if its decreasing its being closed out. Realistically you either need to watch to know if a client is closing out the option, or rolling it. There is a lot of information required to be tracked for this. The easiest is to watch for changes in the open interest of a series. 2) Open Interest - you had best check with the exchange how best they operate the measurement of this. But in a simplistic measure, check out Open Interest Definition Now while you will only be interested in what the exchange numbers are reported as.......as food for thought, take it one step further and think about it terms of an individual traders open interest. (assume all in the same strike, series, instrument etc) Day 1.... buy 10 contracts, Day 2.....sell 5 contracts Day 3......buy 2 contracts Day 4......sell 2 contracts Whats the open interest? +10-5+2-2=5 (now if you dont want to get confused stop reading.....otherwise as an interesting often not known element of the option market).... Or can a trader have +12 longs open and -7 shorts open? Depending on the exchanges and the availability to do this..... both options are possible and you want to check how the exchange accounts for this. Usually they would still only show +5 open. But it can get confusing when expiry comes around, as the volumes may not replicate what the open interest is. This is because of choice to keep option positions open that are "back to back", and not closed out. (It involves extra accounting and costs but can be worth it.) So on expiry day (assuming the options are ITM), the option trader chooses to exercise both the longs and the shorts, and the volume will be expiry day trades of +12, and selling 7. All I would say is check exactly how the exchange calculates it if you are going to use it.

I have never heard of it nor really seen it spoken about. It maybe focused on more institutional and business orientated clients. Which will mean its prohibitively expensive for a lot of retail traders. That does not mean its good or bad. If this is the case, and its a great system but at a good price, then unless you are using it to its full maybe its overkill..... (i used to pay $1000 per month for a very good trading charting news service. Now I pay $50 for the same thing but with more of the functions I use.......each to their own) Trial it yourself, or talk to the sales guys and see if it suits your needs.

Q: "I have a few difficulties understandig why the market maker is not going to quote the call option at price strike below the dollar" A: Most strikes, expiries etc are set by the exchange. Maybe they have rules or have decided not to list new option strikes in these months.....maybe there are other shorter dated options that are less than a $1 strike that are available. Q"...what I don't uderstand is that the security is trading at 0,38$ on the nasdaq and its call options is trading at price strike >1$ and the open interests for this call options is huge " A...These may have traded earlier in the year when the strikes were at the money. (yet, I don't know for how many stocks a single call contract accounts for...maybe 1k?) A.....check on the appropriate exchange for that instrument. Q..."Why is anybody buying call options instead of buying the security itself?" A....Risk v return. The stock has been a poor performer over the year.... risking 2c v 39 c seems worth it depending on the view. What if the stock rallies to 80c the options might go to 6-8 c. As in every trade there are trade offs - this is the fun part of option trading Are they all buying options......or are they simply buying them back as they are short them? Apart from the varieties of options available, the education requires to trade them, there is also the added element of being able to understand what has happened in the history of the option trading in an instrument. This in itself can provide a lot of information.