With all this talk about penny stocks and Ethereum shilling, why doesn't anyone talk about options trading? I know most of you can't afford it to begin with but I've heard from some very very rich people that options blow the doors of stocks. Is this true or bullshit?
If a stock goes up 1% the options for that stock can go up between 20-100%+ depending on a lot of things. but still
>>1136342
No. I believe 90% of options buyers lose money on their trades. It makes sense to sell options if you have an account big enough to handle covering the margin, but buying options is often a losing game unless you really know what you are doing. There's a lot to learn about all the elements that determine the option price, and constant time decay and sudden countertrend moves in the underlying stock can slash your option price by 20-50% overnight if you are not careful.
If you are gonna try it, you should paper trade them for a couple of months at least to get an idea of how they work.
>>1136533
thank you for a serious reply. I've been trading stocks for about 4 months and I'm looking into something more profitable. I'd be putting about $500 in to start, is that too little to make any serious type of profit?
>>1136342
I would buy options if I had enough capital to offset the fees
3k in an iBrokers account since I'm under 25 would be nice
>>1137417
i've been messing around with options for the past few months and for the most part they're pretty legit, at least for trading. the concept is pretty simple; options are insurance that will allow you to buy/sell stock at whatever strike price the people trading the option agree at. the contract is valid for a certain number of months, and then expires worthless (expiration is the third friday of the month for US options)
so, say a stock is worth $110 and you think it's going to $105. You buy a PUT option (allowing you to sell the underlaying stock) with a strike of 110, and you paid $1 for that option. You need the stock to go to $109 to break even, if it goes to $108 you doubled your money. If by the expiration date of the option the stock is worth >$109, you lost your money.
The nice thing about options is that you can exercise/sell them at any time before expiration, so you have a long time range for the stock to hit a price you expect it to to profit. The hard thing is figuring out what to pay for an option; their price is very volatile. It's like they layered the penny-stock market on top of the real market. I've bought puts for $3.6, only for them to fall under $2 and then rocket to $4 (because i stuck to my plan).
They're pretty easy to trade so long as you know what you're doing, easier than something like margin trading forex where you're always directly exposed to volatility, whereas with options you can make one trade, stand back and wait and see. Less nerve racking.
>>1136533
and this guys absolutely correct about paper trading. the hardest thing is buying options at the right price, it takes a while to understand how they behave. I'm currently down %20 (it's a small account) because I got stuck holding options that I paid too much for, and expired worthless even if the stock went in the direction I predicted.
Good luck. Paper trade. Everyone needs to paper trade before they get into the markets.
You can trade them easily with crypto.
http://secondstrade.com/
Judging by how much I make selling options I think buying must suck
>>1136342
i looked at the tax implications and decided i would much rather be doing futures
>>1136342
watch TastyTrade.com everyday.
>trade small
>trade often
Use smart strategies. Don't try to predict movements in the market that's where you get fucked. instead set up positions to earn Theta each day. It's a grind until I grow my portfolio to the point I can quit my job
Thinkorswim is a solid platform. I did the Dough quizzes to send the certificate to my broker because they were being faggots about giving trading access at first... the Dough certificate is stupid but it keeps these cryptocurrency plebs out. your brokerage prob won't give you access if you have no job so get that first.
>>1137508
How do the taxes compare to a similar investment in the underlying stock itself assuming it's held for under a year?
buy ether
>>1136342
There are tons of ways to do options.
Whatever you do, do it on paper for a few months so getting rekt isn't actually bad for you.
