Is there anyone who trades options? I would like to get a quick tutorial of what it entails. I heard that options is where the money is at, someone tried to explain it to me but he didnt do a good job coz I have more questions than answers. So far I understand puts and calls but I dont really understand how you execute the order. He said something about insuring your calls, how does that work?? Does anyone have any experience with this? I dont really feel like reading on it coz most authors give you BS advise. He also said that you dont lose money in options, how true is this? And how are you able to buy options at a tenth price of a stock?? Hisah?? Drunkard?? Anyone??

Hey you've just made my day. I plan on reading up on it, actually I will take a class on it but I just wanted to find out the quick facts about it. And the guy said you dont lose money coz you can make a putand call on a stock so even if it goes down, you still make money but now that I think about it, if it goes down, you lose the bet that you put in that it will go up right?? But then he said something about insuring your bets. Is there any way you can just give me the basic key points of how it works? Im honestly slumped with school right now it wil be a while before I read up on it

Oh I found the self help section, will read through it. So far it looks like options make money with volatility??? A stock that doesnt move is not a good candidate?? That means the last few years when the VIX has been high, people trading options have made alot of money?? So my thinking is penny stocks are the best candidates for options coz just a change of 0.01 gives a big % change?

@Nabwire, may be futures are better. Share the knowledge

Itz, i dint know there are Kenyans who trade 9in options! that's a first, please elaborate who and where and how it is managed. and i think there is some true in what Nabwire was told. with some complex options like collars, you can almost not loose. but remember,like all derivative products, it boils down to what you are using them for. like a Knife!

[quote=Nabwire]Pliz Itz or Jirani interpret this table for me? For example at $8.50 it says the last was 0.41 and its down 0.14, what does that mean? The stock itself is down 0.14, is that the same 0.14 for the option? But at $8 there are two quotes, the first one was last at 0.91 and down 0.16, then the second one the last was 0.97 down 0.01, what does this mean? Why two different prices?? Oh by the way im quoting the calls. Then can you buy the options at any time with a 30 day expiration? Pliz lemme know.

http://finance.yahoo.com/q/op?s=BAC+Options[/quote]

Hi Nabwire.am looking at this after market close.i have been travelling and haven't been able to respond to you.for the stock BAC the 8.50 is the strike price basically the price you are betting the stock will be trading at on the expiration date you have chosen.looking at BAC today the 0.41(last) is the last price the 8.50 call option traded at.if it is down 0.14 that is for the option price and not stock price.also has to do intrinsic value
For the sept 8 calls 0.91 most likely was the last traded price,the second price of .97 was that on the bid or ask? it couldn't be on the last column..Yes you can buy options anytime before their expiration which is normally the 3rd friday of the month in the US market.For a beginner try go longer than 30 days especially for stocks like BAC because of time decay.The closer this stock gets to expiration and the chances of your strike price being hit diminish then the value of your options goes down too.Also dont buy out of the money calls(strike price far from current stock price) unless you are a big risk taker.The trick is normally to have enough time to make a profit on your options before expiration.Look for 40-60% profit and just keep doing it.I dont buy options for slow moving stocks like BAC, i prefer fast moving stocks like GMCR,MCP,JCP,APPL,GOOG,LVS,NFLX you get the drift.These stocks move a couple of dollars at a time and the right trade can make u a lot of money quick.you can also blow up all your capital.Also on these stocks i have mentioned i only do weekly options(expiration after 1 wk) but i wouldn't start there if i was a beginner.last week after posting i bought 1k worth of GMCR 27 call.i sold a day later for 200% profit but by tuesday this those calls were up 2000%.could have made 20k and if risked 4k could have made 80k.it is also possible that the stock would have gone down and i could have lost my 1k.That is just one example.
So Nabwire i urge to learn how trade options,take time and dont start with a live account.practice before you put your money on the line,remember the big boyz want that money and they manipulate the market and more so the options.

Thanks alot Itz. I kinda understand better. So what factors make an option move up or down? Like right now Bernanke has announced QE3, how are you playing that news? Mayne those are impressive returns, I just know that this being less than 2 months to the elections, there is money to be made, just dont know how to play it. Like I know you said BAC is a slow moving stock, but it has shot up recently, you dont think that a combination of QE3 & elections will make the options do well? And I also didnt understand why sometimes an option will have 2 prices like right now BAC calls have 2 prices for 7 and 8 both with different amounts in gains, why?
Im being super greedy right now, so im guessing with Christmas season approaching, I should look for retail stocks and electronics like AAPL,BBY, Macysetc. By the way nice play on GMCR I remember when it was being hammered, I just wonder why this stock does so well even better than SBUX. What do you think about Nintendo and Netflix, I am just trying to focus on consumer stocks especially with the holiday season coming up. Ohhweee I see your point, AAPL is up $14, but you will need alot more money to play it coz the cheapest strike is at 290. So right now a call of 680 is in the money with the last price at 11.90 and up 5.30, lets assume i would have bought $2,000 worth earlier and im ready to sell today, how much would that translate to? Like how much would I get in my account after selling? Also is 60 days sufficient time to hold the options? If you reach your target you can always sell right? So lets say you said the option will go to 10, but it goes over and rallies to 15, you are paid the difference right? What if instead of going to 10 it just goes to 8.90, you lose the equivalent of .10 worth of options right?
Great strategy Sizzla

Congrats, so what stock did you make a killing in?
Apple seems to be a favorite which makes sense especially coz they come out with a new phone every second, and iPhone owners are usually giddy to get the latest one. But what are your thoughts on Google, it has huge margins too. And I was thinking Amazon coz of holiday season plus QE3 has to be a good thing for them. more discretionary income hence more shopping.
I cant do futures yet, have no clue how its played.

Thats great, so in options terms how up are you right now? Gosh I still dont undrstand fully but my hunch was also to go with Apple and Google. So when you say you placed orders for today the 14th and 28th, what does that mean? You placed a bet that the price will be X on the 28th? So Im guessing you do weekly trades. I am very risk tolerant but only if I understand what Im doing, but I know the best way to learn is to just go in and make mistakes.

Wait, you can only recoup your profits during expiry? So if I bought 60 day options, I can be locked in for the full 60 days? Midway through I cant decide to sell coz I have already reached my goal?
I only trade stocks and I have insomnia with numbers and percentages flying all thru my mind, I just wonder how people like you sleep with all that activity? Asia, Europe, US and Africa, gosh I would have to be on sleeping pills to be able to sleep. That sounds like a tough schedule.