Replies to post #30035 on BlackOp Stocks

[haber]

OptionMillionaires board is the best. Jimmybob and Uranium Pinto Beans (UPB)

http://investorshub.advfn.com/Option-Millionaires-12013/

Has a good amount of links and stuff too.

I'll try to cover some basics really quick, based on my own misconceptions when I started trading options:

1) Options are not "all-or-nothing". There's a market with a bid/ask just like any other security, and you can buy or sell at any time.

2) Stick to basic calls and puts. There are a TON of crazy things you can do with options, but calls mean you think it'll go up, puts mean you think it'll go down.

3) There are three important things with options:
a) Strike Price
b) Cost
c) Expiration

Expiration is the date the option expires (always a Friday I believe).
Cost is how much you purchased them for (always multiply by 100)
Strike Price is the price of the Stock.

So if I buy 165 IBM weekly calls for .2, my expiration is this friday, .2 is the cost ($20 per option, 10 options costs $200 plus fees), and the strike price is 165.

4) Options decay as you get closer to the expiration date. I usually find that there's a dip each am (overnight decay), then things hold steady for about an hour or two as the market figures out which way things are moving and how strongly, and then the decay for the day sets in. THU/FRI get crazy on the daily decay.

5) TIMING IS EVERYTHING. You can correctly predict which was the stock will move and not make a cent.

6) TIMING IS EVERYTHING. The swings in options can be really gnarly, so take profits when they present.

7) TIMING IS EVERYTHING. Don't over-trade (my biggest weakness) - most options are losers because the ticker won't move hard enough.

8) If you don't already, start paying attention to the market as a whole. When the market is crumbling, or booming, it influences a LOT of tickers in a very big way.

9) Paper trade. Honestly, I think this is the single most helpful thing you can do. Pick any stock that you, for whatever reason, paper trade something, and learn. I tried reading about options for a while and it didn't make sense until I actually saw the action. Then everything was so clear.

If you use etrade pro, you should have some free tools to use (I watch the Option Chains and Market Depth for each ticker I might trade)

The guys at this board also have some good stuff: http://investorshub.advfn.com/boards/board.aspx?board_id=24396

And once you're ready, join the option millionaires chat room. A lot of amazing traders in there with great input on the market, individual tickers, etc.

Sorry for epic long post