day tradingsoftwareday traderstock day trading
If I'm working full time and can't be watching the computer all day, can I still do these trades safely? What happens if there is a rapid adverse change in stock price? Can I set a point for the brokerage to unravel the whole trade?
Day trading


You should be using limit orders on every trade anyway. Selling covered called is fine. The only downside to that is if the option is called, you may miss a big upswing in your stock. Thats about the only truly safe option play. Other options trades can be lucrative, but come with a lot more risk. 85% of options contracts expire worthless.
I just don't get it. If things are so bad, why isn't the floor dropping out? Is it the hedge funds keeping them up enough to bounce them between 300 point fluctuations and feel comfortable with the options trading in those ranges?
Day trading


Hi,Well for a start there are 1000's of investors who when indices drop jump on board to take advantage of fluctuating markets.10% is not going to happen across markets unless massive disaster affecting world…
Big brokers also along with fundmanagers buy n sell etc etc so ,whilst we are going through a correction from the bull run it will settle and steadily rise ,just be patient.
Hedge funds don't control the market it's way too big,they might think they can LOL…Cheers ♥
I know "day-trading stocks for a living" is kind of a joke nowadays (although, yes, I'm sure 1 out of 50 daytraders are able to make a living out of it), but what about options trading?

I have a fairly solid background in financial markets, but I've never explored options. Can I, with no more than $20,000 really make great money selling and buying options?

The stock market alone could earn me 11% on average. What kind of year-end returns could I expect trading options?

Please no links to advertisements! Thank you!

Day trading


I'm actually a fan of selling options on stock I already own. Basically if you're the guy selling the contract to buy 100 shares of x stock at y price, you:

1) Get cash up front.
2) Will make money beyond the cash you get up front if the option is actually excercised (assuming the strike price of the option you sell is greater than the current price of the stock your selling.)
3) Aren't taking any big risks that you wouldn't be taking anyway by holding the stock.

Of course you risk making less money that you'd otherwise make if you simply held the stock and it goes well above the strike price. But most options expire worthless, and quite a few of the ones that don't probably still don't make enough to cover the contract price (ie your still better off).

How much you can make doing this depends on the stocks you invest in and the manner in which you do it. Not shockingly people are willing to pay more for options on a hot growth stock like Apple (a Sept 140 call contract trades for $420, slightly more than a 3% yield) than they are for a value stock like Walmart (a Sept 45 trades at $45, a 1% yield). Also the closer the strike price is to the stock's current price the more its worth but the more likely it is that the contract will be excercised (an Apple Sept 140 contract is worth $420, a 150 is worth $140, a 160 $45, etc). I generally sell contracts that are short term and fairly far out of the money (as far as I can go while still making a decent return).

Okay, that was a lot…

Buying calls or puts is obviously far riskier. My advice would be that you should only buy options rarely, if at all, and look for options that don't expire for at least a year (more time is relatively cheap when buying options–the first month is the most expensive, as is the first year, etc).

And to answer your originial question– unless you are VERY lucky (and have taken a huge amount of risk) I doubt you could make a living in the short term off of options. But you should be able to augment your returns by selling calls and over the long term that can help the 20k grow.

Good luck.

I've never heard of this until a few days ago. what is options trading btw? how can i do well?
Day trading


An option is a financial instrument you can buy or sell to generate additional income on the stocks you already own or to speculate on stock price movement.

Here's how it works:

Before you can trade options, you have to apply for options trading.

Most applications are reviewed and approved within 5 business days.

After being approved, decide whether you want to write a covered call, or trade calls or puts.

Options Strategies

* Covered Calls
Sell a covered call to generate income on a stock position you already own. This strategy is designed for conservative investors who are neutral to moderately bullish on a stock currently owned and are willing to sell the stock at a pre-determined price in exchange for receiving a premium for selling the call option.
* Trading Calls & Puts
Buy calls and puts to speculate on the price of a stock. Investors can buy long call options when they feel the price of the underlying stock will increase, or buy long put options when they feel the price will decrease.

What I need to know is, and this needs to be answered with somebody that actually trades options for a living. The other day i was watching this stock in pre market trading it was up by 5 dallars or 5 points in pre market. i wanted to catch that move using options, i have been paper trading with option express. so i purchased deep in the money calls. and the last bid and ask, the price of the option was like 8.20 - 8.50 the last trading day, i put a limit order in for 8.60 before the market opened, i was up tremendous that day because of the price discrepancy. So my anserwer is, is this a flaw with option express, or can you put in a order in using options if you see a stock up or down significantly in pre market trading. to capture the move in within the intraday.

THANK YOU

Day trading


You are asking a very important question. The fact that you are asking it shows a greater than average understanding of the markets. That said, I'm sorry to have to say that is impossible to answer for sure. Any type of paper trading does have a limitation in that a computer or person is deciding if and when an order gets filled and this might not be totally realistic. When you are ready to move on, start with real money in tiny amounts and watch what happens with real orders getting filled.

Back to your example. Please consider another theory. You didn't capture the 5 point "discrepancy". You might have been profitable because there was a big follow thru when the primary market opened and you caught some of that move. I have done this, and when it works, it works well, but sometimes there is no follow thru, or worse, there is a backlash, so being ready to exit promptly when the trade is not forming is crucial to success.

NSE, BSE stock , cash, intra-day, delivery, options trading daily, weekly, monthly tips providing sites.
Day trading


Study a good book like Intelligent Investor then you don't need money making tips
What is the procedure for options and stock trading via E-trade or other day trading software. How much money is required to open an account. Is this risky? How does it compare with futures trading. Thank you for your help.
Day trading


Most online brokers have some minimums. they vary. in order to day trade, as i recall you need $25,000 minimum. there is a formula that they used to determine if you are a "pattern day trader". you must follow the rules and have the cash in the account to pay for the trades you make. you get a few strikes and then they will prohibit you from trading your account if you don't have funds available. do a search on the site of the broker you choose for day trading rules.

Learn before you burn yourself out. Most (and i really mean most) people lose money day trading. You need a discipline that is hard to master. You need to know how and when to take a loss as this is what saves you to trade again in search of the winners. Stop loss orders are very important. And you need to realize that you are trading against professionals who get better executions of orders, have better information and faster access to it. You are also trading against computer programs.

Options are for the most part a highly speculative venture unless you are writing covered calls to try and boost your return on your long positions.

read the educational stuff at bobbrinker.com

I traded stock options many times often within 30 days, each time taking a bigger loss; Say I BUYcall options for TM(toyota) sell within 30 days, rebuy within 30 days (different strike price different expiration date), each time taking a loss.. Can i take a capital gain loss or does the Wash Sale rule apply??. I read somewhere the wash sale rule would apply for the 1st trade BUT that this DISALLOWED LOSS could be applied towards my COST BASIS of my next stock or stock option purchase of identical stock ?? Can i claim a capital claim loss on the 2nd or 3rd time i traded that particular stock option and took a loss or can i only use it to any future capital gain in future years?? Thanks
Day trading


<<<Can I claim capital gains loss on options trading or wash sale rule apply?>>>

The wash sale rules apply to options trading if and only if the replacement position is "substantially identical" to the position closed for a loss.

<<<I traded stock options many times often within 30 days, each time taking a bigger loss; Say I BUYcall options for TM(toyota) sell within 30 days, rebuy within 30 days (different strike price different expiration date), each time taking a loss.. Can i take a capital gain loss or does the Wash Sale rule apply?>>>

You have to determine if the option purchased is "substantially identical" to the one sold. As of the last time I researched the issue, some years ago, the IRS had not issued any rulings to help clarify that term.

<<< I read somewhere the wash sale rule would apply for the 1st trade BUT that this DISALLOWED LOSS could be applied towards my COST BASIS of my next stock or stock option purchase of identical stock ?? >>>

When a wash sale occurs the loss is used to adjust the cost basis of the replacement position.

<<<Can i claim a capital claim loss on the 2nd or 3rd time i traded that particular stock option and took a loss or can i only use it to any future capital gain in future years??>>>

Every time you have a wash sale you adjust the cost basis of the replacement securities. You end up getting the benefit of the loss(es) as soon as you are out of "substantially identical" securities for a 31 day period. That can be in the same year or in a future year.

For more information on wash sales see the articles at

http://www.fairmark.com/capgain/wash/index.htm

including the pages on "Wash Sales and Options"

http://www.fairmark.com/capgain/wash/wsoption.htm

and "Substantially Identical Securities"

http://www.fairmark.com/capgain/wash/wsident.htm