ShortSlaver
Member
Obviously 'newbie' and 'options trading' will send a chill down some spines, but I believe responsibly used it's great investors take this kind of control in their financial future.
I use them as a tool for leverage as it makes sense when you have money to take a responsible, educated change with but want more leverage to realize larger gains to make your bankroll larger.
For me personally, I don't like selling covered calls as I lose all the upside and maintain (forced into even) all the downside. If your brokerage account allows it, selling puts can be nice if you meant to buy the stock anyways. You might take a crap on it, but if you would have bought the stock anyways, you would have likely crapped anyhow. Especially if you planned on taking a long-term position - as in I would have held no matter what and waited for capital gains before selling. Either way, I don't personally sell either or - at least not now.
Options are especially nice to hedge a position but if you're already playing with a small bank roll you're hedging a relatively small stake and might be better 'going for it' anyhow.
If you have a margin account sometimes it makes some sense to short a stock and buy a short term out of the money call, as its cheap and you might plan on the particular stock dropping quite a but. But that's not always possible and about the only hedge like that I've played.
I think the main thing you want to avoid is a big short-term of of the money option. Either way, really, put or call. They lose. Almost always.
I think starting out you might want to play LEAP's as they at least give you time to get out if it gets too hot for you. But you pay a premium for time obviously.
Options can give you a lot of control of shares in a company you believe in and can be quite profitable. But do be careful and do a bit of math to see how unlikely a chance you have of gaining anything. TSLA is a weird company right now and just can't lose steam. Usually it isn't like this. It's at a rare point where it could just blow up and see explosive (more than it already has) growth or deflate by missing by just a bit.
Have fun, learn something and good on you taking control of your financial future.
Remember, options is a net-zero game. For every winner, there is a loser. Full-time players with sufficient bankroll have a better chance at winning.
I use them as a tool for leverage as it makes sense when you have money to take a responsible, educated change with but want more leverage to realize larger gains to make your bankroll larger.
For me personally, I don't like selling covered calls as I lose all the upside and maintain (forced into even) all the downside. If your brokerage account allows it, selling puts can be nice if you meant to buy the stock anyways. You might take a crap on it, but if you would have bought the stock anyways, you would have likely crapped anyhow. Especially if you planned on taking a long-term position - as in I would have held no matter what and waited for capital gains before selling. Either way, I don't personally sell either or - at least not now.
Options are especially nice to hedge a position but if you're already playing with a small bank roll you're hedging a relatively small stake and might be better 'going for it' anyhow.
If you have a margin account sometimes it makes some sense to short a stock and buy a short term out of the money call, as its cheap and you might plan on the particular stock dropping quite a but. But that's not always possible and about the only hedge like that I've played.
I think the main thing you want to avoid is a big short-term of of the money option. Either way, really, put or call. They lose. Almost always.
I think starting out you might want to play LEAP's as they at least give you time to get out if it gets too hot for you. But you pay a premium for time obviously.
Options can give you a lot of control of shares in a company you believe in and can be quite profitable. But do be careful and do a bit of math to see how unlikely a chance you have of gaining anything. TSLA is a weird company right now and just can't lose steam. Usually it isn't like this. It's at a rare point where it could just blow up and see explosive (more than it already has) growth or deflate by missing by just a bit.
Have fun, learn something and good on you taking control of your financial future.
Remember, options is a net-zero game. For every winner, there is a loser. Full-time players with sufficient bankroll have a better chance at winning.