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  1. Hi Cuttshot


    May I ask you, what money management you use when trading atm and itm options ? Did you ever set your stop loss with the share or do you prefer to define a stop loss in that situation through a fixed amount of money in conjunction with the volatility ? Higher volatility = bigger stop loss and lower volatility means smaller stop loss.


    If you trade itm options, would it not be easier to trade the share directly ?


    I hope, I did not ask to much. Your post's in the forum are always very nice and very helpful. It would be nice, if you would have the time, to write some notes to my questions.


    With all my respect



  2. cuttshot

    Trade Monster?

    Dan, Thanks for the response. The trading I have done with TM has been with basic directional strategies (calls/puts and verticals). I will keep your experience in mind. For the time being I am sticking with TOS. The commissions might be higher but I think they make up for it with the free platform and all the tools they make available. Not to mention their support has always been really good for me. Cuttshot
  3. cuttshot

    Binary Options

    I know there was a little discussion of binary options a while back but that thread seems to have died out. I keep getting more and more info on these products every week. Is anyone trading binary options at this point? I have looked into them in the past but never done anything with them. There are so many products out there today that it's difficult to keep up with everything. At the same time I'm always open to new ideas. If anyone has had good success with these products let me know. Brokers, products, times of day to trade, etc.
  4. Save_trader, Couple of comments on your post. First, the strikes and expiration really depends on my outlook. As much as I would love to say I have a defined rule set for picking expiration cylce and strike price it really does depend on the type of trade I am taking. If I anticipate being in a trade for a short amount of time (less than a week) I will consider ATM options. In all other cases I prefer ITM options. I have started to use weekly options with some of my strategies so that also comes into play when selecting my options. I would say I am using front month options most of the time with my directional strategies. If I'm putting on some of the more comples spreads then I will go out further in time (calendar spread). One of the main reasons traders get frustrated with options is the fact that there are so many different strategies to use. It isn't as black and white as some other ways of trading. You really have to have a clear outlook for the trade and then create the position to reflect that outlook. You will also want to be careful when legging into/out of a position. If you aren't filled on part of the trade you can be left with a position that has a completely different risk profile than you were going for. I know I got a little off topic there but hope that helps.
  5. cuttshot

    Best Time

    Arthur, It really depends on the market that you are trading. It is true that most markets pick up during normal equity session hours (9:30-4:00). However, if you are daytrading futures or forex then keep in mind you are trading products that are available 24 hours. In most cases you will find 8:00-12:00 the best hours to day trade the popular futures and forex markets. If you are trading the U.S. index futures you can push back that starting time to 9:30. Let me know what markets you are looking at and I will do my best to give you a good window of time to consider. cuttshot
  6. cuttshot

    Trade Monster?

    Thanks Mark. I didn't have any issues with them when opening my account. I guess you hear these types of stories about every broker out there. It's hard to find the perfect broker. So far I prefer the TOS platform. It's not that Trademonster is bad but probably more what I comfortable with. Hopefully you get things worked out with them.
  7. Save_trader, Sideways markets can be difficult to deal with at times. I like to trade products that move consistently over time. I have my watch list of 10-20 names that I track all the time. These are names that all show a 65-70% win rate going back a few years. I don't change my watch list all that often. This way I don't have to be a great stock picker all the time. I focus in on the volatile names and trade them knowing that I will have losing trades or even losing streaks from time to time. By looking at the same names I get to know how they move and also get to know their options. Once you get more advanced with options there are certain strategies that you can use in sideways moving markets. Putting on a calendar spread or an iron condor are strategies that you can use when the names on your list aren't moving much. If you setup your watch list correctly then you shouldn't have too much time where you are stuck in sideways markets with nothing to do. The bottom line is you need to decide what type of trader you are. If you are a directional trade then make sure you are trading names that have good volatility. If you like to use premium collection strategies then use names that are less volatile and stay in predictable trading ranges. Hopefully this makes sense.
  8. I really enjoyed working through this thread on options. Trading options has been very profitable over the years. I have traded many different strategies but have really found my sweet spot with simple strategies such as straight calls and puts as well as vertical spreads. Options can become very complicated quickly. There were a few posts in here about how different premium collection strategies can work very well in many different conditions but then when the market changes you can just get pounded. This is the problem with some of the advanced strategies. You might win 4 out of 5 times but on that one time it doesn't work you wipe out all your profit from the winning trades. The reason so many people get intimidated by directional trading is that they don't have a system that gives them a consistent edge. Let's face it there aren't too many people that know how to pick direction over time. If you have a system that gives you an edge you can make some impressive returns by using very basic strategies. If you are struggling to profit with options I would encourage you to keep things very basic. Don't over analyze things. Trade what you know and understand and the profits will come.
  9. I agree with the earlier comments. Trading around news can be very difficult. I also like to sit out a couple minutes before the release and thet get back in a few minutes after. Often times you will see an action-reaction-action move. You will get an initial move right at the release followed by a reaction in the opposite direction then finally a third move back in the direction of the original move. Even if you find a way to get an edge around news you need to keep in mind the possible slippage. You can really get some nasty fills trading around news.
  10. BlowFish, I have not done a whole lot with volume charts. Most of my active trading is done with range charts at the moment. I really like how many nice clean quick moves these charts have because they react so fast. I have recently started to look at volume charts again. You're right it would be an interesting comparison to look at volume vs tick charts. I agree with MMS that it does take some work to get the right setting correct going from tick to volume charts. At the moment I'm confident in my trade plan using range charts so it's difficult to motivate myself to mess with something that"s not broke.
  11. I agree MMS that support/resistance are just as easy to see on tick charts. On a daytrading basis I have yet to see a time based chart outperform a tick or range chart in the long run. I have better consistency with these charts than I ever did on time based.
  12. A few things come into play here. Keep in mind the ATM option will have the highest theta which means time decay will be greatest. I typically will only go with and ATM option if I'm only planning on being in the position for a few days to a few weeks. If you go with the OTM option all you are dealing with is time premium. OTM options also have a low delta which means it's going to take a larger move in the stock for you to start seeing profits. With this in mind, if you want to mimic a stocks move with options you will want to go with ITM options. Often times a deep ITM option is referred to as a stock replacement strategy. Look for an option with a delta of .70-.80. You will pay more for this option but you will also experience profits much sooner than if you were to go with the OTM. Also keep in mind you are still controlling the stock for much less than buying the stock outright.
  13. good stuff suri. i'll have to bookmark it.
  14. What other internals are you following? I like watching the advance/decline line on both the NYSE and and NASDAQ as well as the uvol/dvol on both as well. I also look at the trin on both of these. Finally, I like to look at the 5 and 15 min charts on the SPY and at times the SPX. On these charts I look at the 20, 50, and 200 moving averages. Using all this does help give me a feel for current market conditions. How does this compare to what you are doing?
  15. Nick, Which markets are you looking to trade? Stocks? Futures? This will help in getting you info on the broker fees. You might want to check around to some different brokers to get a better feel for the fees. Here's a few that you might want to look into if you are looking into stocks and futures: -Interactive Brokers -Tradestation -thinkorswim -tdameritrade Not saying these are the best or only options. Just a few of the popular names out there. They will all have the fees laid out on their websites.
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