Welcome. You are in a great place to start learning about options. There are many who have gone through this series multiple times. As your knowledge and experience grows, you might pick up nuances that you missed the first or second time through. I encourage you to practice in your paperMoney account as you go through the series as well. Again, welcome aboard. ^Barb
From week 2 (Long Calls,) of the previous cycle; Strike price question on Nike. If a base hit is the goal, why wouldn't I chose the the lower strike price ITM (100,) with a .79 Delta? Yes, it has larger Bid/Ask spread and higher premium, but I have a +/-79% chance of being in the money, and the OCO order you taught would mitigate the potential loss of the higher premium. I enjoy your class. You're great.
I don't remember that trade specifically but it might have been that the ITM strike was a little to expensive for our risk management guidelines. If a trader is being conservative and position sizing based on max loss, it might have been as simple as that. Also, if it was a short term target such as a Swing Trade or a 1ATR target, the intention is to be out of the trade within 1 to 10 trading days. The intention is not to hold it until expiration. Hope this helps. ^Barb
Thank you. I'll look at it again from an exit time frame perspective. This is my second time through your Getting started series. I would love to see a class focused on Strike price selection. Tight Bid/Ask spreads ATM seem mandatory for some of the Spread strategies I'm learning, but too restrictive for "simple" Long Calls and Long Puts. Enjoy your day!
If you want to start trading options, I know I need an account, and then I need money in that account, but do I need to buy 100 shares of every stock id like to place options on?
No. You do not need to buy 100 shares of every stock you would like to trade options on. The exceptions to that are covered calls and buy write covered calls. Each sold call represents the obligation to sell 100 shares of stocks, so in that case, a trader might want to have at least 100 shares of stock per contract so that they can easily meet the obligation to sell 100 shares of stock if required. ^Barb
I have been investing for years. However, I have NEVER done anything with options... I am eager to learn.
Welcome. You are in a great place to start learning about options. There are many who have gone through this series multiple times. As your knowledge and experience grows, you might pick up nuances that you missed the first or second time through. I encourage you to practice in your paperMoney account as you go through the series as well. Again, welcome aboard. ^Barb
I always learn something new from Barbara👍
So glad! ^Barb
Thank you ! 😊 I'll be focused on this course
Thank You Barbara
You're welcome. ^Barb
From week 2 (Long Calls,) of the previous cycle; Strike price question on Nike. If a base hit is the goal, why wouldn't I chose the the lower strike price ITM (100,) with a .79 Delta? Yes, it has larger Bid/Ask spread and higher premium, but I have a +/-79% chance of being in the money, and the OCO order you taught would mitigate the potential loss of the higher premium. I enjoy your class. You're great.
I don't remember that trade specifically but it might have been that the ITM strike was a little to expensive for our risk management guidelines. If a trader is being conservative and position sizing based on max loss, it might have been as simple as that. Also, if it was a short term target such as a Swing Trade or a 1ATR target, the intention is to be out of the trade within 1 to 10 trading days. The intention is not to hold it until expiration. Hope this helps. ^Barb
Thank you. I'll look at it again from an exit time frame perspective. This is my second time through your Getting started series. I would love to see a class focused on Strike price selection. Tight Bid/Ask spreads ATM seem mandatory for some of the Spread strategies I'm learning, but too restrictive for "simple" Long Calls and Long Puts. Enjoy your day!
If you want to start trading options, I know I need an account, and then I need money in that account, but do I need to buy 100 shares of every stock id like to place options on?
No. You do not need to buy 100 shares of every stock you would like to trade options on. The exceptions to that are covered calls and buy write covered calls. Each sold call represents the obligation to sell 100 shares of stocks, so in that case, a trader might want to have at least 100 shares of stock per contract so that they can easily meet the obligation to sell 100 shares of stock if required. ^Barb