many retailer traders are buying options at a level of volume that doesn't correlate/is proportionate with the actual volume of the asset (in this case a stock). Volatility of an option for a stock might be very high while the volatility on the stock itself is not high.
When you sell options, you are getting small amounts of monies say $50 or $100 per contract but, if your option goes in the money by a huge amount, your losses would be in the $1,000 or more so, penny wise pound foolish!
Keenan Yoseph so when u own an option u don’t actually own the stock in essence it’s basically the stock is being loaned to u at a certain price and u need to make sure that it goes up or down to a certain price so for each one additional one that u own their needs to b an incremental reward or else u risk losing a ton of money for each time u trade
Selling options with defined risks allows you to play at the deep end of the pool, without drowning.
What does Anton mean when he says retail traders buy the asset at a level of vol that doesn't exist in the market? 2:31
many retailer traders are buying options at a level of volume that doesn't correlate/is proportionate with the actual volume of the asset (in this case a stock). Volatility of an option for a stock might be very high while the volatility on the stock itself is not high.
First time I traded options, I felt like I could do no wrong using one week expirations... and then blew up. :)
what about option strategies which have defined max loss/profit? For example, spreads, condors, butterflies, etc.?
They work well. Naked selling is a nono
Is that captain America at 1:30?
Bahaha
Epic stuff
When you sell options, you are getting small amounts of monies say $50 or $100 per contract but, if your option goes in the money by a huge amount, your losses would be in the $1,000 or more so, penny wise pound foolish!
Not always true
Small position sizes and defined risk.
Anyone know how to avoid naked options trading, I understand options but not naked options
use a spread; credit for selling, debit for going long
What does he mean when he says, "There needs to be a marginal benefit" when trading options to make it a better choice than owning the asset outright?
Keenan Yoseph so when u own an option u don’t actually own the stock in essence it’s basically the stock is being loaned to u at a certain price and u need to make sure that it goes up or down to a certain price so for each one additional one that u own their needs to b an incremental reward or else u risk losing a ton of money for each time u trade
For me, Thev value I receive from these videos is don’t do it!