<I bought some Jun 5 APM calls today for 1/2. Did I p#$s my money away? >
I've traded hundreds of options contracts and I used to lose money
all the time, now I don't trade options much any more but a couple
of things that have helped make many more profitable situations for
me:
1. I only buy calls on stocks trading 60 dollars a share and over,
better if the stock is trading at over a 100. Why? cause with
options its points, and not percents. So obviously it's easier for
a 100 dollar stock to move a point than a 5 dollar which would
be a 20% move.
2. I only buy options on super strong market leaders undergoing
a bullish trend with a strong underlying bullish market sentiment.
sounds kinda obvious huh? I'm a master at stating the obvious!
3. I don't do spreads, straddles, etc. cause I'm not that smart
to figure it out, and get confused, and impatient, and fear takes
hold and I lose money!
4. I tend to buy deeper in the money cause you get a better
delta, and after a time, enjoy 1 for 1 option appreciation with
the underlying stock.
My last option trade? I bought the 105 puts on YHOO when it
was at 110. I paid 9 dollars or so per contract. And yes, YHOO
went down 6 the day I bought it. Unfortunately, YHOO went UP
6 the next day, and I bailed fearing major capital loss, as it was
including commissions, I lost 85 dollars! And to think today YHOO
touched 100, I'd of had the big score. Goes to show you how
much I know. |
