I have some guys I work with that have been options trading through Robinhood app with airline and cruise line stocks. Just wondering if anyone here does any, I am thinking of putting a little bit into it and jus playing with it. Nothing substantial but enough to learn with and not enough to care if I lose it.

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Originally posted by mrvmax:
I have some guys I work with that have been options trading through Robinhood app with airline and cruise line stocks. Just wondering if anyone here does any, I am thinking of putting a little bit into it and jus playing with it. Nothing substantial but enough to learn with and not enough to care if I lose it.

I only gamble when I go to Vegas.

I’ve done it in the past with good success. I subscribe to Motley Fool Options. They walk you through trades. For example, I bought 3 contracts on Facebook at $20 and the option expired when the stock hit $60. I ended up owning 300 shares at $60 for a cost of $20 a share. Sold out at $200 a share when KungFlu hit. Ten bagger.

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Originally posted by zipriderson:

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Originally posted by mrvmax:
I have some guys I work with that have been options trading through Robinhood app with airline and cruise line stocks. Just wondering if anyone here does any, I am thinking of putting a little bit into it and jus playing with it. Nothing substantial but enough to learn with and not enough to care if I lose it.

I only gamble when I go to Vegas.

So you do not own a 401K? You don’t buy any type of stocks? That is as much gambling as anything else. I know a couple of dummy’s that were close to retirement and had their 401K set up with aggressive funds, I just told one of them last year to put his money into fixed interest He did not listen and now has to delay retirement. Most investing is speculative and is a gamble, I realize some are in fixed interest but most people like to make a higher return than the inflation rate.

Leveraged gambling.
Good for people with insider information.
All others, beware.
If you're asking here, buy lottery tickets.

My father-in-law made a small fortune in options trading.

Unfortunately, he had a large fortune when he started.

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Originally posted by 220-9er:
Leveraged gambling.
Good for people with insider information.
All others, beware.
If you're asking here, buy lottery tickets.

Normally I would need that but they’ve been making money picking stocks that will most likely recover. The airlines are coming back, oil is coming back, chemical companies are coming back. There’s no insider trading needed to see that. In a normal market it’s a bad gamble but when the market drops as big as it did many stocks are going to recover. My company stock is up around $40 a share. The Marathon Oil stock I bought around $3 hit $8 yesterday. I’m trying to capitalize any way I can. In the last downturn I was afraid to get back in until it was too late to profit. I didn’t make that mistake this time. Options trading may be a bad gamble but I’m willing to throw $500 at it to find out.

Its a Zero sum game. No thanks. It is kind of like an amateur poker player going up against Doyle Brunson and his buddies..

I have traded on Margin however.

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Originally posted by mrvmax:

So you do not own a 401K? You don’t buy any type of stocks?

I disagree. To say that putting money in a 401k and trading options is pretty much the same thing is like saying a Ford Pinto and a Buggati Chiron are equivalent kinds of cars.

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Originally posted by mrvmax:

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Originally posted by zipriderson:

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Originally posted by mrvmax:
I have some guys I work with that have been options trading through Robinhood app with airline and cruise line stocks. Just wondering if anyone here does any, I am thinking of putting a little bit into it and jus playing with it. Nothing substantial but enough to learn with and not enough to care if I lose it.

I only gamble when I go to Vegas.

So you do not own a 401K? You don’t buy any type of stocks? That is as much gambling as anything else. I know a couple of dummy’s that were close to retirement and had their 401K set up with aggressive funds, I just told one of them last year to put his money into fixed interest He did not listen and now has to delay retirement. Most investing is speculative and is a gamble, I realize some are in fixed interest but most people like to make a higher return than the inflation rate.

Single stocks are way more risky than the typical 401k. There's really no comparison.

I agree with zipriderson.

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Originally posted by mrvmax:
Options trading may be a bad gamble but I’m willing to throw $500 at it to find out.

Why are you asking then? It sounds like you've already made up your mind.

I do own a 401k, and let the professional finance people manage it. If I managed it, I'd educate myself and do it conservatively, but as said above, this is not the same as picking stocks and guessing whether they'll rise of fall in value in some short term. . all the while paying transaction fees as you buy more, or sell to cut your losses. No thanks.

I have bought stock to sell options in blocks of 100. I have never bought options. I do my research and it worked well for me. I have made modest gains, but never invested heavily, so I never made a killing at it.

Within reason, one can dabble in options safely. You may or may not make money but you can pick strategies for which your potential loss is known upfront.

The problem tends to arise when one packages options together (example - selling a call option in tandem with a purchased call) for the purpose of minimizing the initial net premium. Though you can structure a combination that still limits your loss to a specified amount, it’s tempting to tweak that arrangement for the purpose of increasing the potential gain but at the cost of increased exposure.

You should spend some time understanding the valuation of options, slang terminology and common strategies.

The CBOT (now part of CME Group) has traditionally had good tutorials, an option calculator, etc.

Last point, do you plan to be a technical trader or will you instead focus on fundamental values. The use of options vs stocks is really just a function of picking a tool (one more levered than the other). But you still must decide how you will make selections. To me, that’s a greater challenge.

Of course, everyone knows that you should sell puts on tech stocks on the last Tuesday of the fifth month for which the average monthly rainfall in Gordo, Alabama exceeds 2”.

Yep.
Head over to wallstreetbets on reddit and be prepared to either make a lot of money or lose it all very quickly.

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Originally posted by mrvmax:
So you do not own a 401K? You don’t buy any type of stocks? That is as much gambling as anything else.

That statement's about as incorrect as it's possible to be. I'll just leave it at that.

The fact that prices fluctuate on both stocks and options does not make them 'both gambling' and thus, somehow equivalent.

TD Ameritrade has lots of educational webinars you can participate in if you want to learn about it.

I have a stock dividend portfolio that pays about 7.5% dividend. I would like to increase the number of shares I have in a few of the positions. I sell puts on positions I want more shares of at a strike price of 15-20% down from where they currently trade.

If I get the shares I am ok with the extra dividend, if the options expire, I keep the option premium and I am happy.

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Originally posted by 1s1k:

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Originally posted by mrvmax:

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Originally posted by zipriderson:

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Originally posted by mrvmax:
I have some guys I work with that have been options trading through Robinhood app with airline and cruise line stocks. Just wondering if anyone here does any, I am thinking of putting a little bit into it and jus playing with it. Nothing substantial but enough to learn with and not enough to care if I lose it.

I only gamble when I go to Vegas.

So you do not own a 401K? You don’t buy any type of stocks? That is as much gambling as anything else. I know a couple of dummy’s that were close to retirement and had their 401K set up with aggressive funds, I just told one of them last year to put his money into fixed interest He did not listen and now has to delay retirement. Most investing is speculative and is a gamble, I realize some are in fixed interest but most people like to make a higher return than the inflation rate.

Single stocks are way more risky than the typical 401k. There's really no comparison.

I agree with zipriderson.

Maybe I said it’s all the same but I meant it’s all gambling. I know multiple people who lost enough in their 401’s that they will never recover due to age. It’s all gambling but the risk is not the same.It doesn’t matter who’s managing your account, nobody I know of but con artists will guarantee returns (if you know someone that does please post their info and I’ll look into it).

My very first firearms customer lost most of his retirement around 2008 and someone was managing his account. I’m sure he thought it wasn’t a gamble, stocks always recover, right? They will but since he was in late 70’s he didn’t have time to make it up.

I’m not debating anymore whether it’s gambling or not, we all believe what we want. If anyone has done it please share your experience. If I end up doing it I’ll share my results, good or bad, down the line.

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Originally posted by CoolRich59:

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Originally posted by mrvmax:
Options trading may be a bad gamble but I’m willing to throw $500 at it to find out.

Why are you asking then? It sounds like you've already made up your mind.

I’m not asking someone to convince me to do it. I’m asking people that have for their experience doing it.