Posts Tagged ‘Good’

Binary Options Make a Good Platform For Options Trading Systems

Article by Michael Young

Options trading systems are all over the internet. Promising huge profits, and little risk, they make a compelling case. Some of them do provide a very good way to profit from options trading. It is hard to know what options trading systems actually work. If you are interested in binary options, I give you a system (more like a strategy) that can work very well to reduce risk, and increase profits. Binary options are fixed-return options. If they expire in the money you receive the predetermined returns. If they expire out of the money you receive 0-15% of your investment back.

There is one, commonly used system used when binary options are the focus. I want to talk about that in a minute. Before I do, i want to mention the risks. You can’t trust any options trading systems to ensure profits. It is not possible with the random nature of the stock market. The best that options trading systems can do is give you a much better chance of turning a profit. They can reduce risks, and maximize potential profits. In the short term, or the long term you have no way of knowing for sure if you will profit. Having said all of that, you give yourself a very good chance of success if you employ effective options trading systems and strategies. It is much better than random selection, and relying totally on chance.

Options trading systems applied to binary options are simple. There is one that is most commonly used that I will discuss here. It involves buy both call, and put options on the same asset. The idea is to hedge your investment. An option that is currently in the money, but has yet to expire, is what you need for this strategy. For instance, if you have a call option that expires at the end of the day and it is 10:00 am. If you are in the money, you should consider buying a put option for the same amount. This will allow you to double your money if the asset expires between the strike prices of each option. At the same time, you will cut your losses if the asset expires out of the money for one or the other. You will cut your losses by up to 90%.

Consider options trading systems like this if you find yourself in the position of being in the money, with the potential for the asset to level off, or even change significantly. It is a great tool to minimize your losses, while still maximizing potential profits.

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Getting good at trading?

Question by ottterlygood: Getting good at trading?
Hi

I intend to to learn and get good at trading, specifically equities and options.

1. What are the skills that I would need?
(TA, FA, trend analysis, etc)

2. Is there a site where I can paper trade for free for international markets?

3. Where can I find out about all the important upcoming events that would affect the DJ? (reporting dates, budget announcements, etc)

Thanks!

Best answer:

Answer by Not My Fault I Voted Libertarian
make sure you have plenty of margin
the more margin U have
the more money u can make
also minimise your expenses

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What is a good options strategy book?

Question by westcoast7777777: What is a good options strategy book?
I’ve been trading for a while and I’m looking for an almost professional level option strategy and analysis book…and good recommendations?

Best answer:

Answer by Mike
Try “De Mark on day trading options” by Thomas De Mark

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I’m looking for income from option trading. Any good option strategies services you recommend?

Question by Bill L: I’m looking for income from option trading. Any good option strategies services you recommend?
Advice for the best options strategy…

Best answer:

Answer by stevenson7788
I’m very happy with Options-Strategies.com. They give three to four option trade recommendations per month. My account has steady increased nicely since I joined last year. Their option trading system is mostly spread trading strategies, which i prefer for the lesser risk…

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What is a good book to read about options trading? (I am a beginner.)?

Question by Annie M: What is a good book to read about options trading? (I am a beginner.)?

Best answer:

Answer by mishapheart1 h
beginner books

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what will be a good idea for investment management software?

Question by Nick: what will be a good idea for investment management software?
so…basically i happen to have about $ 50k and being a software developer and a trader (amateur…) – I am thinking to create and advertise a professional investment management software. Obviously I am planning to include features that can’t be found free online (or at least hard to find…). Like:

calculating ultima,zomma and other rarely used options greeks.
Demo test trading strategy based on random(stochastic/monte carlo) data.
Demo test high frequency strategies (say against nasdaq realtime data…).
Backtest trading strategy together with a utility function (kelly, square root,etc.).
use asymptotic analysis to approximate sabr etc.
calculating copulas
calculating LIBOR market model
=================================

Personally I would need such thing as I find useful the historical Kelly criterion testing +
exotic Greeks calculations + testing HF strategies in real time based on set of programmed
rules. I will most likely never need to do anything closely related to asymptotic analysis or copulas…but others do probably.

things like that…I know there are many programs to back test strategies and some resources to calculate Sharpe ratio – but I don’t think there are that many about the other features mentioned.

Now…the problem is if people will be interested at all. I mean – how many people are interested in quantitative trading anyway? And what will be the right price to set if any – $ 3000…$ 300??

10x!

Best answer:

Answer by cactusgene
What you are proposing is a very complex investment management program which very few people would understand or know how to use properly. I have a lot of contacts in the investment community and none would be willing to spend the $ 300 to $ 3,000 for it. You would have to do such heavy advertising that the cost thereof quite likely is higher than the revenues from the eventual sales from the few buyers out there.

Then there is always the proof of concept question. Back testing most often has no relationship what-so-ever to future results. Design it for yourself to keep it for your own personal use, and IF it works you will get rich all by yourself.

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Is selling stradle option on SPDR exchange traded fund(SPY) a good strategy?

Question by raj k: Is selling stradle option on SPDR exchange traded fund(SPY) a good strategy?
I am an individual investor who is currently using options on exchange traded funds for capital growth.I sell both put and call options on SPY (S&P500 index) close to the current market price. I also buy protective puts.I generally sell options two months out to maximise my return on investment. Can you advise me if it is a good and safe strategy?

Best answer:

Answer by anonymous
Sounds to me like you are a little more advanced than the teenagers on this site! I can not give you advice … can you give me some? Why not stocks? I am into [GW] Grey Wolf and [GE] General Electric. What are your thoughts?

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What are some good option trading newsletters or penny stock newsletters?

Question by donnell: What are some good option trading newsletters or penny stock newsletters?

the U.S

Best answer:

Answer by Mohan Poudel
Please for which country tell us in details.

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Beware of The Volatility Headfake: One Good Downward Spike

When I read declarations by Goldman about the median daily moves for stocks during earnings season the hair on the back of my neck stands up, it reminds me of the old trading days where whatever you see or hear is not real and you better strap on your counter intuitive hat so you don’t get on the wrong bus.

It’s also very scary when Goldman starts broadcasting trading strategy (this clearly can only be a head fake) regarding selling MSFT covered calls for clients. Shorting Call Option premium during a hard selloff while you are long the under lying stock is a losing trade, and one Goldman would gladly take the other side of.

This tells me that markets are about to take a huge dump after a long rally.  There is absolutely zero chance that Goldman Traders would let anyone know what they intend to do for their largest clients.  I should explain that  Prop Trading is gone from the desks on Wall Street but there is not a  trader in his right mind that would let an internal strategy go out to the wires.  Below is some information from a variety of news services talking about this subject and it made me laugh!!  Beware !!  We are due for Volatility and a good downward spike.

The current earnings season so far has been one of the least volatile in years with large, one-day moves in shares after a company reports results a rare occurrence, Goldman Sachs Group strategists said. On average, stocks have moved 2.7 percent on their earnings reporting days, the lowest average daily move for the first two weeks of earnings since 2007, wrote equity derivative strategists John Marshall and Maria Grant in a report on Wednesday.

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The four-year median daily move is 4.8 percent.  “If earnings moves continue to be so modest, this could be the least volatile earnings season since our data series begins in 2003,” the strategists wrote. They are now leaning toward more option selling strategies given the stable earnings results and small moves in the shares.
With a strong start to earnings season, high expectations have been priced into shares, and only very large earnings surprises have been rewarded with big moves.

So far, only 17 percent of stocks have moved more than the options market implied on earnings day, making volatility buying strategies challenging, the analysts said.  Goldman lists only 12 stocks that have made earnings day moves 25 percent greater than their median move over the past eight quarters, a list that includes Google Inc (Nasdaq:GOOG ), Alcoa  (NYSE:AA ) and Halliburton  (NYSE:HAL).

Given this pattern, along with a recent trend of late reporting results being less volatile in general, the options team sees opportunities to sell options or employ more volatility-neutral strategies to capture more modest moves.

For example, the team recommended that Microsoft Corp’s (NasdaqGS:MSFT ) stockholders should consider selling January 2011 .50 covered calls to increase yield on what has been a range-bound stock. Microsoft earnings, due on Thursday, are unlikely to be a meaningful catalyst, they said.  Covered calls involve selling a call option to gain income on a long position in the shares.  Investors selling covered calls risk limiting the stock upside to the call strike and remain exposed to stock downside risk. An equity call option grants the right to buy shares at a fixed price any time until expiration.

Goldman pointed out stocks beating consensus earnings estimates by three standard deviations have had a median outperformance of 211 basis points vs the S&P 500, while firms beating by between one and three standard deviations have underperformed by a median of 17 basis points as of October 21.

For more information visit

http://www.worldmarketmedia.com/779/section.aspx/2603/post/beware-of-the-volatility-headfake-one-good-downward-spike

where can you get good commodities trading advice?

Question by aaron: where can you get good commodities trading advice?
besides getting a bachelor’s degree in agricultural economics, where can you find a reputable broker for futures and options?

Best answer:

Answer by DJTT
From a good broker. Generally they don’t charge either.

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