Hi,

I want to learn how to trade options (just buying puts and calls - not selling them!). I have read a book on it (Options Demystified) but didn't get much out of it - its very vague.

What books / websites are the best place to learn about trading options?

I have read Dr Van Tharp's Trade Your Way to Financial Freedom and John Murphy's Technical Analysis of Financial Markets book so I know a bit about TA and Position Sizing / Trading Psychology and Expectancy.

I have been paper trading for the last 3 months and have been shorting a lot of stocks but I think that buying Puts would be more efficient - i.e. more leverage.

Every book I have looked at seems to go into huge depth about spreads and writing options but I do not want to do that - just want to buy calls and puts.

Any advice / opinions would be great!

Thanks,

Mike

I have taken Investools and Optionetics classes awhile ago. They are pretty good. I think the 3 green arrow method by Investools is an easy way to trade the market but doesn't do well during sideways trending markets. Market cycles go up, down and sideways. Optionetics spread strategies work well for cashflowing monthly income but don't teach it as clear and simple as Investools. I think both are expensive. I enjoy teaching stocks and options and maybe can be of service to you. Visit my profile and maybe I can help.

I completely disagree with the last post. The difference between Vegas and the markets CAN be big if you play the game the right way.
1. Gambling, with the exception of a few games like Poker and Black Jack are games of chance and the odds are usually slightly in favor of the house.
2. In the markets like in Poker or Black Jack you can wait until you have a statistically significant edge then and only then do you place your bets. Unfortunately in cards you have to pay an ante and you have to wait until you get good cards or in the case of Black Jack be a card counter. In the Markets you can do research until you find stocks that have an edge.
3. For example the trend- If you purchase a call option when the Stock is in an uptrend, the S&P is in an uptrend and the industry the stock is in an uptrend and you do a bit of fundamental analysis you've already stacked the odds enormously in your favor.

My question to Mike is why he only wants to learn how to buy calls and puts. If you do only that it's like being a boxer that can only jab. In this game you need to know several trades to be successful. Knowing how to use a strangle, a credit spread, or Iron condor, can be of tremendous help.

Anyway just my 2 cents.

Try going to www.888options.com. This is a great website from the OIC with extensive information about how to trade options. This site has classes, audio teaching sessions, podcasts, Calculators, quizes, and a virtual trade system. The best thing about this virtual trade system is that you do not have to set up a broker account. It has about a 20 minute delay on quotes, but it is a good and free resource to learn from. This is where I have learned most about options trading. I bought a $30.00 book about options, but it really does no justice compared to the extensive free information you can get from this site.

- I have been day trading options for about 6 months now and i have had some good profits just buying calls and buying puts. I don't sell any options and i don't like spreads because if you don't have 25K in capital, then you have to keep that money in your account or hold the stock in case you get called. In order to get good at buying and selling puts you will need to cut your losers very quickly and i mean very quickly. This will ensure that your profits will be greater than your loses. With options express it is $30 for a complete trade. Think or swim is only $6 if you are just doing one contract at a time. The great thing about this is that the stock does not have to move as much...

Playing poker and trading are both -/Sum games, at least day trading. I recommend reading Dr. Alexander Elders Book "Trading for a living". It showed me how complex and dangerous trading can be on many levels. I am trying to learn some covered call strategies at the moment, and having read the book "Trading for a living" will surelly help keep my head cold and not go crazy. Most traders, and Poker players are actually just gamblers. Professional poker players aren't gamblers. Trying to avoid the rush you get from vinning is very important, thats how every gambling problem starts.

You are right, I completely agree. My point was that allmost anything can be done either professionally or unprofessionally. I just felt it was good to point out how easy it can be to turn into gambling by trading, and how similar it is to Poker. The funny thing is that Poker is allmost allways considered gambling, even though it might even be less so than trading, if you don't play against a casino. There are very few who trade for fun, but there are many who play poker for fun, or are drunk etc. So when you are competing against others, you want as many inferior opponents as possible.

And I'm not advocating poker. I am learning to trade myself, I fully understand that it isn't gambling if you do it right. I will not gamble, I will be happy with 1-3 % per month. I'm going to make a plan test it on a simulator, and stick to the plan. Record my errors and develop.

I have a question. If you inherit $15,000 what would you invest in? The stock market that you are talking about or a real estate investment property that you will receive. $200.00 a month cashflow plus appreciation.

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Envision Real Estate