BEFRIEND THE TREND Short-term Options Trading Thread Message Board

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Strategies & Market Trends : BEFRIEND THE TREND Short-term Options Trading Thread

QQQ 621.26

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Jan 16 4:00 PM EST

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To: TraderWithNoName who wrote (823)	2/14/2002 10:07:35 PM
From: Dr. Stoxx	Read Replies (1) of 4058

OK, after a couple of weeks of watching and trading the Q's/OEX/DJX options, I'm thinking now that simply trading the stock is the easier and safer way to consistent, if smallish, gains. Consider: it takes about a $0.2 move in the Q's to move to the option to breakeven (using IB)...meanwhile, your stock trade is +$18 per lot. A $1.00 move in the Q's gives you a nifty 10% gain in the option...but at, say, $200/contract, this is only a $16 gain/contract after commisions. Your stock trade is +$98/lot. This ratio changes dramatically, however, once the COMP/Q's starts making larger moves. But in this sort of choppy market, I'm thinking that holding the options is simply not costworthy. Perhaps the focus needs to be on a much longer time-frame several months out. But I'm not sure I have the patience for that kind of trading. Which is to say: I'm not sure that options are the answer for daytraders using accounts <$25k. Just some thoughts...TC

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