I started playing with options this summer picking blue chip mega cap tickers two weeks or more out calls. I made some quick money but then lost on my next two rounds of picks.
I did some reading and decided to stick with qqq next day calls. Starting the most recent significant dip last week, I’ve made 40k in my ira and 4k in my taxable account. I know we have have been in an upswing but I’m pretty thrilled. I’m almost at even from my painful summer options lesson.
Part of this is knowing we are in an election year and market makers are working hard to keep it propped up to help Kamala and rate cut being priced in.
Thoughts? Warnings?
Posted by hambonejonny
4 Comments
Some questions for you OP
1. Are these trades based on a strategy or edge that you have developed, or clearly defined setups that you take week in week out?
2. Are you using proper risk management or are you a sizing in big to make up for your loses?
3. Are you journaling after every trade to pinpoint what works and what doesn’t?
After you answer this, I’ll provide a proper response
Keep these plays small. They work well…until they don’t. The old saying applies here ”In a bull market everyone looks like a genius”. When things inevitably become really volatile….pain. If you aren’t careful one or two trades will wipe out months of gains.
I know these super short term expirations are appealing and there are some benefits to really short term trades. You can miss some bad moves because you aren’t in when they happen. But people like to forget about Gamma. It giveth, but it taketh away just as quickly. It’s easy to forget about gamma but once you are a few days away from expiration it can become a beast.
yes you figured out the secret code.
Go and become a billionaire my friend!
Market makers “working” to help a candidate? Say more.