Tuesday, July 7, 2009

Re: [TheOptionClub.com] can I trade options on futures like options on stocks?



On Tue, Jul 7, 2009 at 10:43 AM, Aaron Wright<metalwright@yahoo.com> wrote:
>
>
> Dunno, gis, I had a great "fire and forget" spread strategy.  I would put
> credit spreads on OEX for about 20% or more return every month, then just
> let them expire.
>
> Well, let's just say that was cool until I took a 100% loss twice with poor
> risk management.  Then my account was set to 0 and I was a "former trader"
> for a while.  Here is what went wrong:
>
> 1.  No trading plan
> 2.  No understanding of how the strategy worked or options behaved
> 3.  Countless other things that I am not aware of yet!
>
> Now, back to lurking.
>
> Aaron

Classic fail and full credit to you for sharing the scars.

I've been there as buyer and seller of options, blowing up trades like
fireworks with long fuses, short fuses, no fuse ... but always on
paper ... sometimes literally with pencil and paper.

There's "lottery ticket" trades like ICs, but there's no such thing
really as set and forget, especially selling where the risk is usually
twice the amount taken in on the sale!

> ________________________________
> From: Meuter Gisbert <gismeu@gmail.com>
> To: OptionClub@yahoogroups.com
> Sent: Tuesday, July 7, 2009 9:54:19 AM
> Subject: Re: [TheOptionClub.com] can I trade options on futures like options
> on stocks?
>
> Hmm ????????????
>
> <<I sell stock option spread and then forget.  The options expire and I
> spend the profit.  Is it the same with futures?>>
>
> I would not forget about it. It can always go against you!!!
> Don't spend your profit until you closed out the trade or the options
> expired.
>
> gis
>
>

--
Adam

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