Greeks

[aiki14]

I may have posted this already but "The complete options player" by Ken Trester is pretty good but more of a textbook than an easy to read treatise.

[TinGull]

I agree with aiki14. The greeks aren't going to be as important to you if you're doing a 3-5 day swing. When I put on spreads that last for 30-50 days...then they're important to me. I'm still learning how to utilize the greeks for adjustment purposes rather than just using price alone, though...I don't know if that's really a necessary thing for how I trade. It might be later on down the line.

As for who to use...I use thinkorswim. OptionVue is cool, but pricey and you can get tons of the same stuff on ToS for free. ToS is a realllllly awesome company that constantly makes improvements to their software, so definitely check them out.

[james_gsx]

Thanks guys, I'm still learning about Greeks because I think they can be a very valuable tool for some of my investments. For example over the summer I had several oil stocks that were making great money, but days that oil fell those stocks fell hard. It would have been great if I had a protective put to add some insurance, but I would have had no idea what I was doing.

[jim2000]

Delta tells you how much the price of the option will move in relation to the underlying security. e.g. if delta is .98, and the stock moves up $1.00, then the option should move up Approx. $0.98.

If using options to buy stock cheaper with more leverage, stick with high delta strikes. i.e. above .90

Also, in general stick with in-the-money options. The out-of-the-money options are cheaper but they typically have lower deltas and less chance to appreciate.

As an example, for fun and pure speculation I bought some OTM MSFT NOV 40calls for cheap. MSFT went up today $1/share however my calls stayed the same, went nowhere. Now if microsoft were to rally big in the next couple weeks, that would be great, but it was a cheap gamble.

[TinGull]

Buying the NOV 40 calls is purely time premium at this point in the cycle and you've got no intrinsic value in those options. Even if MSFT were to move much higher but remain below 40, you're not going to see that option move. Remember, the last 20 days your time decay is impacting the option price the most dramatically.

[jim2000]

	Quote:	TinGull
	Buying the NOV 40 calls is purely time premium at this point in the cycle and you've got no intrinsic value in those options. Even if MSFT were to move much higher but remain below 40, you're not going to see that option move. Remember, the last 20 days your time decay is impacting the option price the most dramatically.

I did unload these today for 100%. However, with commission and fees I didn't net much cash. Bought at .04 sold at .08.

I might try TradeKing for their low rates.

[TinGull]

How much do you pay per side on an options contract now?

[jim2000]

	Quote:	TinGull
	How much do you pay per side on an options contract now?

Per side I pay 7.00 + 1.25 per contract.

[TinGull]

Wow...7 dollars then a per side? Who do you trade thru?

[jim2000]

	Quote:	TinGull
	Wow...7 dollars then a per side? Who do you trade thru?

Scottrade.