Thank you
I think you may have misunderstood the question. I am not asking why people trade on expiration day. I have a Feb Call, which is not expiring today. I want to know why the price is not moving much even though the stock is. Normally it moves with it. The volume is even rising, I don't understand. Is it because the Jan options are expiring today?
In your case the Stock price is moving up meaning the IV is moving up and may be it is higher than SV for the February Call you hold and so there is less trading in it for being fleecing to the investor or nobody is prepared to buy at asked prices rather they opt for lower prices.
Holding options for some hours -not minutes-, say, buying in the morning and selling before the close.
How much the volatility varies during a typical day?
Already have some experience swing trading index-ETFs stocks and options.
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.
1. If an option is selling for .15, that means it is 15 cents for the contract to put/call 100 shares right?
2. If I buy 10 contracts of .15, how much will that order cost? <see #4>
3. I know options can be traded before expiration, however, what is the volume like? On a small cap, that sees significant movement [3%+] in favor of my option, will I be able to unload it that day should I see fit?
4. I'm looking at an options chain for SNDK today. The $52.5 Nov-06 call last trade was .50 cents, with a volume today of 619. Does that mean that only $309.5 was traded in this option today?
thanks all!
2. 10 contracts = 1,000 shares. Multiply 1,000 by .15 and you get $150.
3. The volume will depend on many things, like if the option is in or near the money, how popular the underlying stock is, how close to expiration, how many contracts are outstanding, to name a few. In the scenario you mention above, you should be able to sell the option, but you have to keep in mind that there is a bid and an ask, and sometimes the bid doesn't move high enough to represent that whole gain.
4. That means that 619 calls were traded that day, it has nothing to do with the dollar amount (although if the all the volume was at the last trade price of .50 the total dollar volume would be $30,950).
Hope that helps!!
Forex market or Foreign Currency Exchange market is one of the biggest trading market in the world with over USD 1.3 Trillion traded in a day. It is drawing attention ever since it is open to Online trading. Forex trading can be very profitable if you take your time to do a proper research, understanding various options and choose a system that works for you. The most used Forex trading system may not be the most suitable for your needs.
There are many different kinds of Forex Trading Systems and you need to know a few facts as mentioned below, before choosing and funding a system.
1. Testimonials: Is there anyone out there who is trying to sell a system and show you testimonials from the people who actually didn't like the system? Highly unlikely. You should do proper research before indulging into a system that is completely new to you.
2. Profit: Do you want to work with a Forex Trading system that breaks even? Why? If you keep the money in your home, you will still break even, then why take all the hassles of setting up an Forex Trading account and do all the work. Really speaking, you should always do some research on how profitable a particular trading system is?
3. Drawdown: The maximum drawdown of trading system is defined as the greatest peak-to-valley drawdown in a trading system’s equity. Maximum drawdown gives us a measure of the survivability of the trading system.
4. Time to profit: The actual time it takes to achieve the results with a particular trading system. You should plan to have a long and profitable relationship with your trading system.
Try to use a trading system that let you open a Demo account so that you can practice and learn about Forex Trading without risking any money.
I have tried many of these systems in my quest to simplify my trading experience. I personally have found FreedomRocks to be the system that has worked for me. I have found no bad information on this system from anybody that has actually used it. I have found many skeptics and bashers but nothing from those that have actually tried at least the free trial they offer.
Below are a couple of links I have found in my travels around the web:
http://www.yourforexinvestor.com
http://www.babypips.com
Now as far as how much money you would need to gat started I have helped people get started with amounts ranging from $500 up to well over six figures. If you would like I could send you a spreadsheet of how to get started right with just $500 invested on a monthly bugeted basis. The spreadsheet will show you how that investment could easily grow to well over $240,000 within 60 months! Feel free to e-mail me and I will get that right over to you.
bjwells@yourforexinvestor.com
To Your Success,
Brandon Wells
877-773-5345
I plan on buying and selling stocks and options with my 401k plan!
That being said, if your looking to investing something that is the "least risky" and "most predictable" you should look at a low cost fund that tracks a broad market index . Check out VFINX, Vanguards mutual fund that tracks the S&P 500. If you looking for pure predictability, try a bond fund.
The others you mention Forex, Options and Commodities, are the MOST risky and LEAST predictable. And while they can be quite profitable for a professional trader, they are not suitable for the average/rookie investor.
In Intraday you have to sell the shares on the same day u buy them.Intraday market close at 3:00 in afternoon if u sell the shares before the market closes it fine otherwise they automatically sell them on the last trade price.If u r going in lose than what I suggest u that there is an option to transfer ur share frm Intraday to Market in that select market & then u can keep ur shares as long as u want.It dosent matter that u r buying through Icicidirect or sharekhan or Indiabulls the market rule remains same for all.Trust me I m also a invester & mainly invest in Intraday.Hope this help u.
Options trading is preferential, but I am open to any ideas.
I know websites like Interactive Brokers lets you have practice accounts, but you need to already have an existing real account.
http://888options.com
You can also find out a lot more info about trading and options on these free sites which are recognized by Y! A as "Knowledge Contributors"
http://investopedia.com
AND
http://yahoofinance.com
As far as "day trading" is concerned:
THE BIGGEST challenge is having $25,000 CASH on-hand in a trading account at all times. This does not include any trades or positions. This is cold, hard cash.
Once the balance goes below this, certain restrictions are instituted.
Thanks for asking your Q! I enjoyed answering it!
VTY,
Ron Berue
Yes, that is my real last name!