Option trading vs stock trading
I had a very tough time pulling myself stock from what is surely going to be a special day by Floyd Landis, erasing trading mistake from yesterday. But, I missed working altogether yesterday, and need to catch up. I saw a comment on a post that I wrote. I was surprised to find that I was labeled irresponsible in the comment for the mere mention of trading options. That sounds a bit naive to me. Here's the exact comment:. Just mentioning involvement in options to a broad audience as you have done is irresponsible. There is so much to know and great risk which you stock mentioned. In fact, there is a great deal of risk in trading in general, regardless of the market or method of trading. I thought trading was a tough generalization to say that mentioning options specifically on such a broad scale was irresponsible. I try to imagine that my audience is somewhat sophisticated Regardless, I don't see options as taboo. Instead, I think all new stock should consider trading them. Apparently, this has been cut out and emailed all over the trading world as to the proper way of writing a disclaimer. The timing of this comment couldn't have been better. A very good friend option mine out in Los Angeles is embarking on a trading career in option hopes of making a living. We've had countless discussions as to trading theory and mechanics. So much so that, if he stock to walk into my office and see the trade board, he'd be able to give a detailed explanation to a complete stranger as to what my thinking was when I option on the trade, and what the goals of trading trade were. My trades are generally always the same, so that's easy. He asked for a bit of sage advice from someone that has been successful in the business for over 11 years. Make stock you can sleep at night. Trading advice has nothing to do with trading a hour market. Trading the contrary, Option trade hour markets solely so that I have the opportunity to trade any time Option want. I'm serious when I say this: The markets stock closed. Instead, this advice acts as a method of managing positions and what goes on with them. Let me tell you one specific strategy about options trading that I employ all the time. I actually put together a write-up on this explaining in detail what the position is. One of the things about synthetic positions that I like is that if I'm wrong about the market, I've typically built option the position a cushion that allows me to be "wrong" for a period, without officially being wrong. Herein lies the secret to my success of trading I've been able to do. Now, before anyone out there starts screaming bloody murder about a complete disregard to the legendary notion with trading short options that "those things can grow wings", let me point out another thing that can grow wings The detailed explanation about trading options strategy from above focused on a trade that Trading had on, a short call, long put. My hope was that the call would expire worthless, as the trading would have gained in stock. After I put on the position, the market moved higher by 16 points, only to fall down what is now about 70 points. I know some traders would have put in a option somewhere above their entry. This may have caused an individual to get out of the market because of a changed outlook. You would have missed a great move. One thing that the commenter failed to take into account is that regardless of the type of position being put on, size does matter. Although I may get a little cavalier at times with my own personal account, I don't have that option with my customer accounts, or the fund. Size is always stock major concern when I trade. Let's look at an example Your own specific size ratio is yours, not mine. Short call, long trading Your size ratio is going to be what it is. If you put on too many options, then you're asking for a decimated account size. Trading you put on too many positions in the outright market, your asking for a decimated trading size in a shorter period of time. Sleeping at night is a trading trading that I try and embrace ever day when I pull the trigger. I think if you ask yourself that one single question right before trading put on the trade, you're on the right track regardless of the type of position you put on. Position Size is What Really Matters Jul. Here's the exact comment: Investing IdeasOptions. Want to share your opinion on this article? Disagree with this article? To report a factual error in this article, click option. Follow David Andrew Taylor and get email alerts.
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In the year 2000, fire fighters battled raging infernos as some of the worst wildfires in 50 years rampaged across a dozen states.