Day Trading

IWM – iShares Russell 2000® Index
QQQQ – Nasdaq-100® Trust Shares
SMH – Semiconductors HOLDRs
GE – General Electric Co.
AMD – Advanced Micro Devices Inc.
MSFT – Microsoft Corp.
INTC – Intel Corp.
CAT – Caterpillar Inc.
WFMI – Whole Foods Market Inc.
TXN – Texas Instruments Inc.
A – Agilent Technologies Inc.
FLEX – Flextronics International Ltd.
SUNW – Sun Microsystems Inc.

Implied volatility (IV) does not usually change much during a typical day. Events which have a big impact on IV usually come out as press releases while the market is closed.

Without significant changes in IV or time until expiration, you will be unable to get much help from vega or theta in your trading. That means you will have to rely on delta, and possibly gamma, to make a profit.

Since the delta of an option is always less than the delta of an equivalent stock position, and the bid-ask spread is almost always greater for the options than for the stock, it takes a larger move in the stock price to break even using options instead of stock for day trading.

I am one of those who believes it is difficult to make a profit day trading stocks, and since it would be even more difficult to make a profit day trading options, I would not recommend day trading options to anyone.

I recognize the large percentage profits possible day trading options, but a large percentage of a small number is still a small number. That means to make a large profit you would need to risk a fairly large amount. I am not comfortable with that risk profile in my portfolio.