I am 40 years old. I invested in forex market over metatrader platform. there i found that there is a dealing desk. So I shifted to stocks. traded and averaged a lot and got profit at the end. Now I am tired of averaging. I want to enter into options. I have read a lot of options but still not able to understand it properly. I seek help. I downloaded options oracle software. but it does not simulate or guide us in any way. just select strategy and it will pop up the show. There are plenty of options traders who surefire earn atleast 2% a single trade. I need the same surefire way. Can anybody help how it can be done. I can invest 25000 INR at present to start with. once I gained confidence I will invest more. I understand it requires patience and a ability to accept failures. I am willing for it, but at last there should be profit. Can anybody advise how it can be achieved ?
<<<There are plenty of options traders who surefire earn at least 2% a single trade.>>>
Anyone who claims to earn at least 2% of every option trade he makes either
(1) does not understand a risk involved in his trades or
(2) is intentionally trying to deceive.
<<<I need the same surefire way. Can anybody help how it can be done.>>>
There are three related arbitrage spreads that you can use to make 2% or more. They are
(1) A conversion spread
http://www.theoptionsguide.com/conversion.aspx
(2) A box spread, and
http://www.theoptionsguide.com/box-spread.aspx
(3) A jelly roll spread.
http://www.investopedia.com/terms/l/longjellyroll.asp
The problem with using any of these spreads to make a "risk-free" return is that to make the return you would have to tie up enough money for a long enough period of time that you could have made a higher return simply by placing the same amount of money in an interest bearing account for the same time period. For example, if you could make 3% with a one year bond guaranteed by the federal government than you should be able to open one of these spreads that will give you a 2% profit at the end of one year.
Of course, if you could find a mispriced option you could make a risk-free profit with dozens of different strategies. Unfortunately , the odds against finding a mispriced option are (at least) several million to one, so that is not a viable technique.
Another problem you have is that 25000 INR is not really enough to have much chance to make a profit trading options. Between the bid-ask spread and commissions, you will usually have a loss of several percentage points simply buying and selling a position if the quotes did not change.
You also said you still do not understand options properly. Do you really think it would be a good idea to make investments when you do not understand the investments? I strongly encourage you to spend more time studying options before you try to trade them. If you have books you do not understand, buy some simpler books to get the basics down.
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June 24th, 2010 at 11:42 am
http://freestockmarkettips.info/ has a lot of good stock information, tips, and you can even have up to date stock information emailed to you as soon as they are released. Also, they have penny stock alerts to be on the watch for.
References :
http://freestockmarkettips.info
June 24th, 2010 at 12:27 pm
You should continue to educate yourself. Here are some free, useful, educational sites.
References :
http://www.optionseducation.org/
http://www.optiontradingpedia.com/
http://www.safe-options-trading-income.com/
June 24th, 2010 at 12:37 pm
Options trading was very complex, then why not you take the hlep of a good experience stock tips services provider. as they have good experience in stock markets you can get definitely the best service with relatively low amount of service charge
References :
http://www.indian-share-tips.com/
June 24th, 2010 at 1:03 pm
<<<There are plenty of options traders who surefire earn at least 2% a single trade.>>>
Anyone who claims to earn at least 2% of every option trade he makes either
(1) does not understand a risk involved in his trades or
(2) is intentionally trying to deceive.
<<<I need the same surefire way. Can anybody help how it can be done.>>>
There are three related arbitrage spreads that you can use to make 2% or more. They are
(1) A conversion spread
http://www.theoptionsguide.com/conversion.aspx
(2) A box spread, and
http://www.theoptionsguide.com/box-spread.aspx
(3) A jelly roll spread.
http://www.investopedia.com/terms/l/longjellyroll.asp
The problem with using any of these spreads to make a "risk-free" return is that to make the return you would have to tie up enough money for a long enough period of time that you could have made a higher return simply by placing the same amount of money in an interest bearing account for the same time period. For example, if you could make 3% with a one year bond guaranteed by the federal government than you should be able to open one of these spreads that will give you a 2% profit at the end of one year.
Of course, if you could find a mispriced option you could make a risk-free profit with dozens of different strategies. Unfortunately , the odds against finding a mispriced option are (at least) several million to one, so that is not a viable technique.
Another problem you have is that 25000 INR is not really enough to have much chance to make a profit trading options. Between the bid-ask spread and commissions, you will usually have a loss of several percentage points simply buying and selling a position if the quotes did not change.
You also said you still do not understand options properly. Do you really think it would be a good idea to make investments when you do not understand the investments? I strongly encourage you to spend more time studying options before you try to trade them. If you have books you do not understand, buy some simpler books to get the basics down.
References :
July 13th, 2010 at 2:22 am
Excellent read, I just passed this onto a colleague who was doing a little research on that. And he actually bought me lunch because I found it for him smile So let me rephrase that: Thanks for lunch!