Fred, Kevin gave you some very good advice about options. Buy in the money. You will sleep better. I also buy time. It costs more. But, again I sleep better. Sometimes I buy puts. My problem with puts is that I haven't bought enough time for them. And that may be important.
I've only been trading options two months, so like you, I'm new. Also, my options broker strategies do not always fit in well with my own strategies.
For one thing, he makes a lot of money. When he buys options, he buys at least 1000 shares. I can't afford to do that. He is less likely to buy time. Right now when we buy options on the same company, he buys June and I buy July. I have also discovered that I like to buy deeper into the money than he does.
He rarely buys puts on specific stocks. But he owns large puts in S&P 500 and other indexes. So I've have to act pretty much on my own when I decide to buy puts. And when I have lost money it was because I didn't have any puts in place. However, I do not buy puts on every option. I buy puts when the market makes me nervous.
I think it would be important for you to work with one broker. You will learn his/her strategy, and eventually, you will find out what kind of strategy you are comfortable with.
Also, working with options is very, very time consuming, especially for inexperienced people like you and me. I work every day and most evenings, too.
I still this type of work for an income to other things that I've done.
Best of Luck. And don't be afraid to ask questions. |
