Hi nerachal,
With OPTIONS...
Its 100% about risk tolerance.
Unless you have deep pockets, you cant afford to learn and trade with many mistakes because the pin action is a 0 sum game almost.
An other words, if you have 3k to start... you may want to enter 10 positions with only $300 at a time.
And not all at once. 10 positions is hard to watch/catch important moves.
If your new to options... considering purchasing a put/call a month EXTRA is worth considering.
You will only make half the profits, but will have twice as long to "learn" call it.
or
play weeklies and utilize only 25% of what you would attempt in a full position.
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(s) sprint was the ticker.
it shot up on news so...the puts went minus 90% (which is why I bought/aka a long shot)
the stock retreated past the open of (.06/put for friday exp weekly at $3 share on Sprint.)
it went down and into the money for 60+ pennies and...
my penny priced option GAINED ONE PENNY FOR ONE PENNY! =)
Pretty neat.
so thats how a .01 option (x 100 = $1/contract+ commision) went to (.63) (x100 = $63 each contract)
so 63 x's entry possibility in one trading day.
=========
it like hitting 63 penny stock 100% baggers,lol...that aint gonna happen.
***this extreme market swings happen DAILY with opions.***
well,,,maybe not 63x positions but... 100-400% dips/swings in optiions happen somewhere DAILY! and in bigboard name stocks.
You get the rare 100x or 1000 x baggers when....
THE MARKETS CRASH
OR
THE MARKET SKYROCKET
*Perfect time to gain the skillz to trade.
Hope this helps. -VERITAS77 *^]-
It is a puzzling thing. The truth knocks on the door and you say, "Go away, I'm looking for the truth," and so it goes away. Puzzling.
Stop by the ETERNITY board for a contrarian approach to all mattersof life
