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Larry1234
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Everything posted by Larry1234
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Zero sum basically means someone is losing that is why the other one is winning. In simple words, options (Derivative trading) do not create wealth where as stock (trading in cash market) creates wealth for all the investor.
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Hi Alan, Thanks a lot. Can you please explain what is TV of premium? I am not sure about it
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Even I believe that the option trading is really a good platform to make huge money in a short time frame and that too without taking much risk. We can easily frame option strategies depending upon our risk appetite and can gain a significant profit irrespective of market movement.
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Assuming that I can afford to lose $100 but and that I can't do it a second time then I would rather say that I should take this bet according to probability theory. Expected Loss = $100 Expected Profit = $1400 Probability of getting the black marble = 1/10 Expected payout per chance = 1/10 * 1400 = 140 Net Gain (Loss) = 140 - 100 = $40 Hence, I should go for the bet. I hope its clear.
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Hey David, I have posted threads related to Futures and Options and the threads were created from the beginners point of view. You can check out my threads for better understanding of the options and futures. Happy Learning
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Thanks a lot for the definition. In which country these spread betting are popular ? Isn't it illegal because you are simply betting. I guess it is allowed in some countries only.
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I would simply say grass on the other side are much greener. I hope you understand this
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Hey all, Kindly let me know where can we get the data regarding option greeks ? I mean the should be readily available and it should be updated one. I believe option greeks really helps in taking a decision. How people are using this to achieve max return ? Need input..
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Adding one more point, one can also use covered call strategy for a particular stock if - Dividend is expected on the stock in the near month, as dividend will give a cash flow to the trader and it will also decrease the share price so writing the call is also beneficial...
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Agreed but in my opinion, the initial cash outflow in writing a covered call is much higher compared to selling a naked put. As we are holding the stock in covered call strategy, so we are moderately bullish about the stock and also getting the advantage of corporate actions (dividend, if any) and in case of selling a naked put, we need to see what is the strike price then we can make a comment regarding the market movement....
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This thread is created for those who wants to post any thing related to option greeks whether their understanding and their experience with the option greeks .....
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Apart from this, selling a naked put is the same as selling a covered call. They have identical profit and loss graphs if you use the same strikes and expiration dates. However, there are a few differences that may make naked puts more or less attractive than covered calls.
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Kindly let me know the url or the website details
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There are lots of advantages of spread betting. Kindly check the below given link http://www.simplymarkets.co.uk/spread-betting/advantages-of-spread-betting -
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Can you please explain what is Spread Betting strategies ?
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Why We Don’t Care If The Stock Market Is “Overbought”
Larry1234 replied to morpheustrading's topic in The Markets
First of all, thanks a lot for sharing this. I would rather say, we as a trader is more interested in making the money. It is easier to make the money if the market is going high. We don't bother whether its over valued or not because our aim is buy cheaper, sell higher asap. -
Hi , I am posting thread for those who are new in options. Kindly check my thread so that you can have basic understanding of F&O.. Thanks
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Hello, This thread has been created to understand the Option Greeks. I would like to say that we, as an individual trader, least focus on the importance of the option greeks before taking a position in options. Let us discuss about the option greeks and its importance - Basically there are five option greeks. They are - (1) Delta - It measures an options sensitivity (i.e. option price) to changes in the price of the underlying assets. (2) Gamma - It measures the delta's sensitivity to changes in the price of the underlying assets. (3) Vega - It measures an option's sensitivity to changes in the volatility of the underlying assets. (4) Theta - It measures an option's sensitivity to time decay. (5) Rho - It measures an option's sensitivity to changes in the risk free interest rate. These five option greeks are really plays an important role in trading decision making. I hope this will help.
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Hello, This thread is created to discuss the option strategies to be adopted for the month of Feb, 2012. Kindly put your view so that we can have a fair idea of how the traders are expecting the S&P 500 to move in Feb and will frame strategies for Feb.
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This seems to be very risky strategy. can you let us know about your ROI ?
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This thread is for those who like to discuss about the covered call strategy. I am waiting for more thoughts . Happy Leaning
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I would rather say option comes with a high risk and return profile. In simple words, the person who shorts the options takes the maximum risk and his profit is limited compared to the Long party in option with a risk-return profile of limited loss and unlimited gain. Apart from this, the worst part in option is it's a zero sum money. It means that it's not creating any wealth in the market. It's simply a loss to one party compared to profit to the other one.
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Hi All, I am going to talk about what is covered call strategy and when to use the same. Covered Call is a strategy in which an investor sells a call option on a stock he owns. In this strategy, the investor generally sells an Out of the money call option (Strike price > Current market price). The call would not get exercised unless the stock price increases above the strike price. Till then the investor in the stock (call seller) can retain the premium with him. This becomes his income from the stock. This strategy is usually adopted by a stock owner who is Neutral to Moderately Bullish about the stock. Writing out-of-the-money covered calls is an excellent strategy to use if you are mildly bullish toward the underlying stock as it allows you to earn a premium which also acts as a cushion should the stock price go down. So if you are planning to hold on to the shares anyway and have a target selling price in mind that is not too far off, you should write a covered call. Happy Learning
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I second your opinion. Whether its a Forex or options, we have to learn first to earn bigger....
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Thanks for your view. But selling calls and puts is very risky strategy as the losses are unlimited. How do you see the market in the near month ? Regards, Larry