No lack of OPTIONS

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aliassmith
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No lack of OPTIONS

Postby aliassmith » Tue Feb 19, 2013 11:30 pm

It seems that other people are interested in options as I am. I was intrigued by them every since Mightyone discussed them with me about a year ago. Since he is busy I figured I would start a thread where we can begin to learn and discuss how options fit into MO 101 technical analysis. If you are interested post a message and if a few people post I'll kick off the thread with some of my ideas.
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lazygeorge
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Postby lazygeorge » Tue Feb 19, 2013 11:50 pm

Aliassmith,this is an area i want to dedicate some time to learn,so please go ahead and share what you have :)

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trueblueTEX
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Postby trueblueTEX » Wed Feb 20, 2013 1:11 am

I'm not ready for it. But I don't want to be left behind either. ;-)

So I will gladly read along.

I do have the DVD and the book (ebook) that MO suggested.

aliassmith
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Postby aliassmith » Wed Feb 20, 2013 2:01 am

Alright then, I wouldn't be discussing options by myself.

Start with a few definitions.
BUYING a Call option gives you the RIGHT to request the underlying at an agreed upon STRIKE PRICE, if the option is In The Money (ITM). You pay a premium for that right.
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PebbleTrader
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Postby PebbleTrader » Wed Feb 20, 2013 3:03 am

Why use options vs something else...

Advantages of Options
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mysticalchemist
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Postby mysticalchemist » Wed Feb 20, 2013 9:34 am

Count me in too. I've also ordered the DVD and downloaded the books mentioned by MO.

Started opening an account with Option Express. Still sorting out the verified paperwork to send in to get it going.

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rushN4
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Postby rushN4 » Wed Feb 20, 2013 12:15 pm

aliassmith wrote:Alright then, I wouldn't be discussing options by myself.

Start with a few definitions.
BUYING a Call option gives you the RIGHT to request the underlying at an agreed upon STRIKE PRICE, if the option is In The Money (ITM). You pay a premium for that right.



Yep

you always pay a Premium as a Option buyer. The most you pay on the ITM/ATM Options and the least on OTM Options. On the OTM Options theres is only time value left (theta)....

Look at this old Lady she would laugh about us :lol:
http://www.youtube.com/watch?v=cXy9HoWX0es

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Postby aliassmith » Wed Feb 20, 2013 4:32 pm

aliassmith wrote:Alright then, I wouldn't be discussing options by myself.

Start with a few definitions.
BUYING a Call option gives you the RIGHT to request the underlying at an agreed upon STRIKE PRICE, if the option is In The Money (ITM). You pay a premium for that right.


To keep it simple we will just talk about longs for a monent. Buying a single call option is a long play. As you can see in the basic MO 101 pic i posted of zline setup a call option could be used instead of buying the underlying and using a stoploss. Have you ever had your stoploss hit and then price went your direction? The call option has a defined risk and no need for a stoploss.
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PebbleTrader
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Postby PebbleTrader » Wed Feb 20, 2013 4:35 pm

Nice video
Life is just a journey

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rushN4
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Postby rushN4 » Wed Feb 20, 2013 4:36 pm

PebbleTrader wrote:Nice video


as i understood it she trades wide Index Strangles with a delta of 5(%) so there is a 5% chance that these Options will be ATM on expiration and that means that she collect the full Premium 95% of the time.

http://www.youtube.com/watch?v=BquDGE9KxZQ
Last edited by rushN4 on Wed Feb 20, 2013 7:30 pm, edited 1 time in total.

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