Posts Tagged ‘Should’

Q&A: Should these limit options orders fill?

Question by matthewspeed: Should these limit options orders fill?
If you don’t actually trade equity options, please don’t answer. I need answers from people who have actual experience buying and selling options for real money.

(Note: I have traded options in a limited capacity for 8 years so I am not a neophyte.)

I am testing a new options strategy on SPY, the SPDR for the S&P 500 which is very active both for the security and its options. My strategy depends on getting in and out at prices of my choosing. I have been using the Virtual Trading engine at OptionsXpress to test my strategy and have found that it is not unusual to submit a limit order at the bid or ask and have it not fill. I am not placing large orders; a transaction of 5 or 10 contracts is typical. Consequently, it seems strange for me to enter a sell contract at 3.25 and see the Bid/Ask sit at 3.15/3.20 and yet my order can spend several minutes in an open state. I understand that OE’s Virtual Trading is pretend so I am trying learn if in the actual markets, a small order at or better than the current price would be executed.
Thank you for your answer. I guess maybe my question wasn’t completely clear. I was trying to indicate that my ask was at or below the lowest bid (or that my bid was at or above the lowest ask), in other words that I was seeing a situation in which my transaction should have been executed but wasn’t and would stay open for an extended period. I have found that if I do market orders I get unpredictable fill prices so I would enter an order at a point such that I would know where it would fill if it did in fact fill.
Concerning “large orders” that was also part of my confusion. It was my thought that small orders at the proper bid or ask should execute. I could understand if an order for 500 contracts were to remain open but people actively in the market seeing an order for 10 contracts at the ask price would snap it up as easy money in a rising market trend. I am intentionally trying to keep my contract sizes such that there would be no impediment to my order being filled.
I see now that as hard as I tried to write my original question correctly I got it wrong and wrote my entered ask above the lowest ask and proposed a situation that would not result in a sale.

Best answer:

Answer by Net Advisor
Little housekeeping first.

5 or 10 contracts would not be deemed as a “large order,” especially trading the S&P. A large order might be greater than the prevailing bid/ask volume, or for the S&P 10,000 contracts on a single tape.

I trade the S&P in high frequency, mostly the puts over the last 2 years.

If you are looking to sell to open or close @ 3.25 when the B/A is 3.15 x 3.20, the order would not be filled as you would be above the ask by 5 cents, and above the bid by 10 cents. The Bid needs to be hit to try and fill the order assuming there are not other orders ahead of you. This is where time and sales, directing orders to different exchanges, having Level 2 capability is CRITICAL for stock and options trading.

Trading on hypotheticals is a good learning experience, but as you know trading in real time, in real markets is a completely different experience.

Good Luck!

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If one was good with trading options, how should he/she start a subscription e-mail newsletter?

Question by chipper: If one was good with trading options, how should he/she start a subscription e-mail newsletter?
I want to know how to start an subscription e-mail newsletter that has stock option picks in them. I’m young, but I’ve been studying/trading stocks and options for 5 years which is long enough to know that some fundamentals dont really have an much of an effect on stocks in the short-term. I have been able to turn $ 175 into $ 800 since April though.this year from using an idea I came up with thats seems to work for me.

Best answer:

Answer by George B
Back test the idea first. Few months does not mean anything. You need to survive all kinds of markets.

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Forex Trade Signal – Just What A Person Should Be Aware Of Regarding Forex Trade Signal

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What is a realistic percentage I should make a year on investments?

Question by ru with me: What is a realistic percentage I should make a year on investments?
The old 10% over the long haul does not seem to be true anymore. I’m not interested in day trading, options, forex or other higher risk money vehicles. I’m more interested in stocks and bonds investing without a lot of trading going on.

Best answer:

Answer by thao
The best guide I’ve used for a long time is the long term yield on the risk free 10 years treasury note plus 2% -3%. Right now, approximately 6%.

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Should i buy the call/put options of which the strike price is same as market price or higher/lower?

Question by larrybird is the BEST: Should i buy the call/put options of which the strike price is same as market price or higher/lower?
Assuming i have no plan to EXERCISE the option and i just want to profit from trading options.

E.g Apple inc is $ 100 and i expect it to “rise”. So am i wise to buy the call option of Apple inc which the strike price is $ 80? Or is it wiser to buy call option which the strike price is $ 120?
And the strategy of put option??

Thanks.

Best answer:

Answer by S
It depends upon your prognosis of the price of AAPL just before expiration. The 120 call is 20% above AAPL’s stock price and the chances of being in the money is below 50% or the delta of the 120 is a rough estimate of the probability of expiring at the money. What are the chances of AAPL going up more than 20% in the timeframe based on the expiration of the call.

In regards to the in the money call, you can buy the 80, 85, or 90 call. It depends upon your prognosis of AAPL price, your budget, and how much you want the call to move in relationship to AAPL’s price move, also known as delta. You would have to sell the in the money call before expiration otherwise the OCC will assign you if you are $ 0.01 in the money at expiration.

In regards to the bullish put option strategies, you can sell cash secured OTM puts or OTM put verticals for a credit. Remember it is not really a credit since cash is held back beyond the credit received and your buying power has been reduced.

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What career should I study to be a trader in forex?

Question by Simple: What career should I study to be a trader in forex?
Is there a carrer in college that makes you a master in forex?
or is it better to take it as a second job?

are there another options to earn money without a job? which is the better way?

thanks…

Best answer:

Answer by Elliott
There are two options the first to plan to join an investment bank or hedge fund and the other is to become a trader generating your own income.

To join an investment bank/hedge fund you would be best of studying and undergraduate in economics and finance and most probably studying post grad in this same fields. You could then become a junior and work your way up the ranks until after years they trust you with clients money.

The other option is to use your own capital, read books and formulate strategies to earn an income through forex trading. This is not an easy task either. It may take years and losses to hone your skills an become profitable.

You could always try for a career in finance and trade forex part time but it will be even more difficult.

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what career should I study to be a master trader in forex?

Question by Simple: what career should I study to be a master trader in forex?
Is there a carrer in college that makes you a master in forex?
or is it better to take it as a second job?

are there another options to earn money without a job? which is the better way?

thanks…

Best answer:

Answer by Termitus
You should go to a Currency College where they teach you everything about currency, trading and exchanging.

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How should I get parents to switch to cell phone provider that actually gets a signal?

Question by Mark: How should I get parents to switch to cell phone provider that actually gets a signal?
My parents both have TracFone. They used to have Suncom and because of the shithole that company is known for, they got out of that plan for good. So they found TracFone.

Well we live in the country, and the only service that’s available is Verizon. TracFone works off of AT&T and T-Mobile signals. We can’t get a signal from either of those providers, rendering TracFone useless at our house. I also have a TracFone which never gets service at our house. My phone’s 9 button doesn’t work now (lol if I have to call 911 I’m screwed) but my father still won’t get me a new phone.

I’d like to get on Verizon. I even looked at their pre-paid phones and that service isn’t covered in my area.

No, I can not get a job anywhere to pay for a cell phone. I’m 16 but my father will not pay to add me to his insurance (I’ve had my permit for well over a year though). So I can not drive, and therefore I can’t get a job. Being that I live 35 miles outside of the city I can’t just get on a bus and ride to where I would work. And plus, my friends that can drive can’t even get jobs being that the economy is bad and no one will hire them. I think I’d be more likely to be hired being that I make straight A’s and take all honors classes.

Switching their cell phone service would really help my parents out as much as it would I. I’m out of smart ideas. Now what could be my options to persuade them?
But of course he would let me get a job. Even asked for mowing his yard for money but he still said no.
I live in the middle of nowhere….How am I supposed to bring in $ $ $ $ if I can’t drive to get myself to civilization for work? Is that simple enough for you people? My father thinks I shouldn’t even get a job.

Best answer:

Answer by Grant Michols
Not driving is not an excuse to not get a job. Get that fact straight, don’t be lazy.

They most likely won’t listen if you can’t contribute financially.

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In option trading when should you use straddle strategies?

Question by Melvin D L: In option trading when should you use straddle strategies?

Best answer:

Answer by JPInvestor
If you are buying straddle, you expect the stock to move drastically either up or down. You don’t know which way so you buy the call and the put around the current market price of the underlying stock. Then, you profit when the stock moves above or below your strike prices minus the cost of the position.

If you are selling the straddle, you expect the stock NOT to move. You are betting that the stock will stay within a certain range so as not to be exercised. Then, you keep the income.

In stock options, A_KANSAN (below) is referring to a Bull Call Spread. The terms and strategies are a little different in commodities.

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Options Trading Strategies: Should I Exercise My “In The Money” Stock Options?

www.StockMarketFunding.com Options Trading Strategies Should I Exercise My “In The Money” Stock Options? Deep In-The-Money Options we will excercise our call options on Google.com. “In-The-Money Options” 6 Million dollar stock purchase on the close for (GOOG). Google closed up .52 to 1.45 on 14728948 469% higher trading volume relative to it’s 3 month average trading volume of 2850570. “Google helps Nasdaq” gain as banks hurt the “Dow Jones” Index as Bank of America, General Electric, and JP Morgan let the Dow down all down over 5% on the “trading day”. “Google’s Earnings” were great and beat the markets and the stock squeeze and after hours earnings gap was in play. The intraday low was alerted in our “online trading platform” as traders were long Google and getting paid well for their positions. Ultimate Option Strategies — Stock Option Trading Advice,High performance options swing trading system aimed at producing profits of over 100% in google.com options trading activity. We held both calls and some put options to hedge the portfolio risk however we were heavily weighted to the call side. SMF Pro Traders were rewarded hansomely with huge profits on this huge earnings beat by google. Bank Huge Options Trading Profits on “options expiration”. Maximizing Option Trading Profits With Fast Puts And Calls and intraday options trading strategies. We train stock market traders and options traders to generate income trading stocks and options like a Wall Street Pro …
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