Should I consider options trading even an option for myself ?

Discussion in 'General Discussion' started by Sanjeev B, Sep 14, 2017.

  1. Sanjeev B

    Sanjeev B Active Member

    Good Day members,
    My name is Sanjeev and I am new to both CD and options. I am based out of
    Good Day members,
    My name is Sanjeev and I am new to both CD and options. I am based out of
    Good Day members,
    My name is Sanjeev and I am new to both CD and options. I am based out of
    Good day CD members,
    My name is Sanjeev & I am new to both CD forum as well as options trading.
    I am based out of Singapore which has either 12 or 13 hour time difference from NYC depending upon Day light Saving etc.
    I have a 9 to 5 full time job. So if I decide to trade options I will have to do the trading during my night time. The maximum amount that I would be able to monitor and interact with the market could be may be may be 1 hour. Based on what I have read till now on CD forums, to become a decent / knowledgable trader requires significant commitment in terms of studying / understanding / learning
    1. Option Greeks & specifically understanding volatility and its effect on option pricing
    2. Options Strategies
    3. learning options software like optionVue
    4. Back testing Options Strategies
    5. Learning trading platform like TOS
    Before I take the plunge, I would like to get opinion of members if just spending 1 hour every day ( possibly after 1st hour of trading) would be sufficient if my account size of going to be say 50K.

    Thanks in advance for your opinions.
    Good Day members,
    My name is Sanjeev and I am new to both CD and options. I am based out of
     
  2. Harry

    Harry Well-Known Member

    To start with, pretty long introduction but finally I did figure out you are based out of Singapore but then like a good horror movie, the last sentence ...

    My experience:
    a) Requires significant time investment to learn. If you can not spare time on weekdays, how about weekends? I spent my weekends in first 8-9 months constantly learning / thinking about options.
    b) Can be managed with 1 hour. I setup / adjust my trades in the 2nd hour of the market and try very hard (90% compliance) not to do it before or after
    c) However, the P&L anxiety / worry / constantly checking ... has still not gone away. It is way better than before as I am confident I can handle most upside drawdowns, but I have not seen downside much so I believe after seeing some major downside moves, I will either right-size or the worry will go away.

    ... so Singapore, right?
     
    Sanjeev B likes this.
  3. Neil

    Neil Active Member

    Books have been written about making money with options. Short, pithy postings in the Cap Disc forums can't begin to address all of the issues needed to answer your question(s); but I'll give you a few general comments to start the discussion:
    Start by browsing through the Cap Disc Forums to get an idea of the breadth and depth of knowledge needed to become competent at options (and competent doesn't mean highly successful). A quick search of the internet will also reveal many other sites that have good information to help your education.
    Find a good mentor (and be willing to spend an appropriate amount of money) to guide your efforts (there are a number of threads in Capital Disc addressing this issue). While learning the basics you should start trading with paper money until you understand the concepts involved in trading options. Once you start trading with real money you need to start with small trades that have limited, controllable risk.
    It's possible, but not probable, that you can learn enough in a couple of years spending only 1 hour per night studying these concepts. I'm not the sharpest tack in the drawer but it took me a couple of years of studying 2-4 hours per night plus about 8 hours on weekends before I felt halfway competent at this stuff. And then I managed to prove myself wrong numerous times before most of the hard lessons (losing trades - stupid strategies - fat finger mistakes) finally became ingrained. And I'm constantly discovering new and more creative ways to make mistakes. You have to remember that a strategy that works well in today's market environment may no longer work when the market changes.
    Another lesson that needs to be learned is how to deal with the emotional side of trading live money. It's one thing to learn that all trades can win or lose; it's something else to actually experience losing a chunk of your capital in a trade that could or should have worked but the market didn't cooperate.
    You have to learn how your personality impacts your trading style. You'll find that some strategies work well and make sense to you almost immediately, while some strategies that work for others may never work for you (i.e., 90-day trades vs weekly trades, iron condor vs butterfly vs calendar, etc.).
    Good Luck
     
    KS, Sanjeev B and garyw like this.
  4. Sanjeev B

    Sanjeev B Active Member

    Many Thanks to Both Harry & Neil for responding to my questions.
    It is correct that I am based out of Singapore. I should be able to spend longer hours on weekday to study options, it is only that when I start live trading I will only be able to interact with market for 1 or 2 hours and therefore should / would concentrate on strategies that would not require constant monitoring.
    I have not read all the threads on CD but few of the threads are suggesting having a mentor an significantly improve once chances of becoming a competent options trader in shorter period of time. I will explore this option after few month. Let me search for someone in my timezone / Singapore.
     
  5. PK

    PK Well-Known Member

    In previous years, I spent many hours a day staring at charts and risk graphs (including quick trading sessions during lunch break at work which definitely was not good for my stomach). Once I decided to focus on one single longer-term strategy that is remarkably resilient to moderate market moves - the Road Trip Trade taught by Dan Harvey and Tom Nunamaker at CD - I completely changed my trading habits.

    Now I spend several hours during the weekend to study topics related to options trading, analyze my portfolio, test some what-if scenarios and write down my plans for the week to come regarding eventual adjustments and entries. During the week, I limit trading to the 1-2 hours before the US market closes. I am based in Spain and usually do not have the opportunity to trade the US market during the rest of the day because of overlap with my working hours, sport after work and dinner at home. There are even days I only spend a few minutes to check my positions because, for instance, the market has moved up or sideways and my plans do not foresee any action in this case.

    Sounds boring but this way, options trading has become perfectly compatible with my job and other activities. Obviously, to manage a portfolio of several positions and make various adjustments in a volatile trading session requires some knowledge of what you are doing; and you need to gain practice with the platforms you are using to avoid fatal errors. It will take some time, depending on your experience and focus, but longer-term options trading strategies such as the Road Trip Trade, Kevlar Trade, Fruitfly, Rhino, Jeep, Parking Trade, Bull etc. can be managed with some experience easily in less than 1 hour a day and, with appropriate money management and hedging in place, do not require constant monitoring. In my case, I would even say that lack of access to my trading computer during the day protects me from taking decisions that are driven by emotions rather than rational analysis.
     
    Sanjeev B likes this.
  6. KiwiDon

    KiwiDon Well-Known Member

  7. Sanjeev B

    Sanjeev B Active Member

    Thanks PK for sharing your perspective & schedule on options trading. I am getting a feel that options trading should be doable along with my full time day job even if I am based in Singapore.
    What I have read till now is that many / most options trades prefer to do their position adjustment during the last third of the day ( may be around 3:00 PM EST) which might not be possible for me. I will have to do testing on how will strategies react if I adjust my positions after 1st hour of trading. I might start with studying Road Trip Trade taught by Dan Harvey and Tom Nunamaker.
    I am inclined to subscribe to the Road Trip Trade Alert service but am worried that I might not be able to resist the temptation to place the trades even when I might not be ready to understand everything about the position / options etc.
     
  8. Sanjeev B

    Sanjeev B Active Member

    Hi KiwiDon,
    Thanks for the useful information, I will make all efforts to touch base with Kevin Lee if I can. I am also reviewing the thread you have referenced.
     

Share This Page

  1. This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
    By continuing to use this site, you are consenting to our use of cookies.
    Dismiss Notice