Wednesday, October 25, 2006

Thoughts on options swing/day trading

You know, yesterday I was searching half-heartedly on the 'Net to see if there is anyone else doing what I have been trying lately - daytrading and swing trading options. Sure, there's Adam's options trading blog, but he focuses more on educating newbies like me on options trading in general (which I am starting to read, by the way). I think that the folks at DayTrade Team (DTT) do get involved in options swing trades, but they only report it after the fact. I suppose that is not that much different from what I have been blogging about here, but I want to provide a different focus and perspective on it.
I haven't been able to find too many websites that talks about doing options swing trading, and certainly none on options daytrading. And also, I haven't found, anyone blogging about their own options swing/day trading experiences. So, I will be the one of the first guys to do it - although at this point in time, I don't really see myself getting heavily involved in too many options daytrades (esp. once the euphoria over my Goog call options win dies down). But I will talk about my options trades whenever I do make them, and hopefully I can get to the point where I will talk about the ones that I will focus on ahead of time. Sort of like how I talked about my Goog call options trade ahead of time (instead of after the fact).
In regards to the suggestion to buy AAPL calls last week, IMO, the options swing trade that they (DTT guys) and Brian Shannon suggested was a higher risk options trade than my GOOG options daytrade. I'm glad that it worked out for the DTT guys and Brian, but holding AAPL calls thru earnings is not something that would fit my risk tolerance.
By the way, here is how my RIMM call option trade turned out:


zbs said...


Congradulations for another great option trade! Option trading has better leverage and can benefit trader a lot if he can patiently wait for the trade work out.

For option day trading, I think only those stocks with high price/high volume/high volality can be traded, like GOOG, SHLD, RIMM, AAPL etc. NYSE may have more candidates.


Phileo said...

Thanks! Yup, you're correct, I'm also finding that only the high volatility, high volume stocks (GOOG, AAPL, RIMM) are tradeable. Also looking for options with high options volume (ie. open interest), as this helps to reduce the bid/ask spread.

Rob & Bridget Forbes said...

Have you looked at Swing Trading Options? The whole theme of the site is to link swing trading and options trading - the basic idea is that swing trading is a perfect tool for options trading, because it minimises the impact of time decay that kills option value. There is no blog yet, but there are some examples on credit spread trades.


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