Option Millionaires

[uranium-pinto-beans]

tex,
paper trading is a great way to learn, but it takes one of the most important aspects of trading out of the equation... emotion. with options, specifically out of the money stock options, these volatile markets that move quickly based upon rumor, cliff, etc. can turn profits into losses very quickly. fake money makes it very easy to keep emotion in check however traders like jimmybob have a knack for putting their emotions on the back burner and ride options out a lot further than you and I.

I think you should continue to research and understand stock options. You don't need thousands of $$$ to trade. A simple $100 trade on a stock you have a good handle on is more than enough IMO.

also stock options offer great ways to mitigate potential losses through various strategies.

for instance this week I had AMZN $250 puts on monday and tuesday, as the stock fell I sold most of my position for a profit but still felt further downside was coming.

I sold the $245 puts in a equal number to the $250 puts I held for $.87 each. I bought back those same puts yesterday for $.15 while still holding my $250 puts.

I sold those remaining $250 puts near the close today for a small loss, but that small loss was actually a nice little profit. AMZN did not fall as far as I thought it would, but I was able to keep my downside trade in play while limiting some of my over all loss potential.

As far as trade size 50 options on AAPL SPY GOOG is a drop in the bucket most near the money strikes traded over 50,000 contracts today alone.

Typical gains? you booked a little over 100% profit. While not typical it is certainly common. For instance the AAPL $515 puts were up over 600% from yesterday:



Alas the calls were down 99%, it is a double edged sword.



However had you traded based upon your knowledge, research, and intuition for AAPL downside like many had you would be sitting on some nice profits.

Have a great weekend bud! And the best to you!