How to use options for intraday speculation

It's safe to say that options speculators are easy to use. In particular, in the short term, by going long and short by buying and putting, you can perfectly control risk and maximize profit.

Many people say why options are bad, and participation is very risky. This is true, because options come with their own leverage, and it is normal for them to fluctuate a lot.

Today, let's take a closer look at why intraday speculation on options is appropriate.

First, let's take a simple example, such as Apple's collapse to the bottom last night.

Last night, Apple plummeted to -3.5% in the market. At its lowest point, it was already very close to the 20-day line, with a difference of 1 yuan. However, as can be seen from the intraday market, after the trend pulls back to the intraday moving average, it is basically impossible to break down. If you want to get to the bottom of the market at this time, let's say buy apples. Since the market has been very weak recently and is all supported by apples, it is likely that apples are still the backbone of the recent market. So, if I start to cut the bottom when I find out I can't keep up, if I want to buy 100 shares of Apple, it would cost almost 16,000 US dollars without leverage. This is already difficult for many people to operate. They probably don't have that much money at all, but they still want to speculate. At this point, you can find that options are easy to use.

Let's take a look at Apple's options. I chose the one that expires on December 17, because the date is so exciting that I can't stand it.

This is an option that expires on December 17. You can see that the price difference between neighboring options was 2.5. Last night when Apple first started to raise the price, the price was about 160. At the time, I chose 165. The reason I didn't choose 162.5 was that the 165 option spread would be a little smaller. At the same time, the premium was only about 3 points, so it's not impossible to go up to the option within the price.

Let's take a look at 165call's trend last night. If the bottom rebounds again, it could probably earn double last night.

This place is not for show operations. We can look at a few points, why do we use options, and how to choose options

1. Choosing options can control risk very well. As an option buyer, the biggest loss is the principal amount. US stocks have fluctuated greatly in recent days. Many stocks have suddenly taken a dive, and accounts will fluctuate greatly. For example, if you wanted to buy 100 shares of Apple last night, you would get at least 1.6 watts of US dollars without leverage. If the underlying stock fluctuates by 1%, the account will fluctuate around 160 US dollars. Take Apple's fluctuation last night. The fluctuation of 2,300 US dollars is not a problem. It's acceptable to have an increase, but it's very uncomfortable to lose money. In particular, it has already dropped 3 points. The market has already dived all the way, and it's very uneconomical to spend so much money to get to the bottom. However, using options is not the same. At Apple -3%, an option was 220 dollars at the time (165 calls due 2021217). If you buy this option, your account will lose up to $220, and your profit isn't capped. Especially when Apple fell to support yesterday, it's still great to play with some money.

2. How to choose options for short-term games. It depends on a person's risk tolerance. The closer the expiration date and the closer the exercise price is to the current price, the greater the fluctuation, and the more intense the game. You can usually consider choosing an off-price option with an expiration date slightly farther away. It is usually best if the expiration date is within a week. If the expiration date is within a week, the game will be very serious (the advantage is that the time value is relatively small; the downside is that if you choose the wrong option, the remaining time value will be lost very quickly)

This one expires on December 3. The price of the Apple Call is 165. The fluctuation last night was even more intense, and at one point the intraday market came close to zero. Anyway, I usually choose shallow off-price options with about 2 weeks left to play. How to measure the previous stage mainly depends on the exercise price. For example, Apple's options, the premium of 3 points is already quite a bit, which can be considered a shallow price. If it's Tesla, 10 points is fine. It mainly depends on the size of the fluctuations of individual stocks themselves.

Alternatively, we can look at an indicator, delta. Try to choose a delta between 0.4-0.5. This option can improve stock price changes anyway. At the same time, it is best to make the delta value larger than the theta value, so that the time value does not decrease too quickly to offset the growth of delta.

For example, the price of this option. If the underlying stock rises by 1 US dollar, the option will increase by 0.35 US dollars. However, after a day, theta will cause options to be reduced by 0.7 US dollars. This option does not respond well to changes in the price of the underlying stock.

Of course, these indicators all change dynamically, and they all dynamically reflect the correlation between this option stock.

3. Never stud. An option usually represents 100 shares. For example, yesterday this option was bought for 200 US dollars. This represents a fluctuation in 100 Apple shares. The only benefit is that as long as you buy an option, the maximum risk is directly controlled within a certain range (this is an advantage of options over futures). You can calculate how high this leverage is. If you calculate an Apple share of 160 US dollars, 100 shares would be 16,000 US dollars. In other words, we leveraged 16,000 US dollars through 200 US dollars, and this leverage is almost 80 times. If you have a $2,000 account, you want to get into Stud, it's really similar to gambling.

4. The appeal of options is leverage, that is, they are small and large. More chips have been leveraged through very small positions. This is also why many people use small accounts to play options; they really only need a very small sum of money. The most important thing about playing options is to survive, not to earn money every time. As long as you can survive and keep improving yourself, you will experience explosive gains one day, but until this day arrives, you can't fall down. Be deterministic and don't always gamble.

5. An option is just a tool. Normally, many people will say how easy it is to lose money with options. Take yesterday's Apple underwriting, which is also buying 100 shares of Apple. If the stock exchange fails, you may lose even more. The recent market has fluctuated so much. Controlling losses is the key; controlling losses is the key; controlling retracement is the key to growth. Of course, many people may not be able to buy 100 shares of Apple at all if they don't participate in options (I am, for example). It's better to understand options correctly. Options are just an amplifier, so that the strengths and weaknesses of individual abilities can be shown very quickly. Therefore, when you don't have enough ability, just try to simulate the game, and do your basic skills. $Apple(AAPL.US)$ $Tesla(TSLA.US)$ $Microsoft(MSFT.US)$ $NVIDIA(NVDA.US)$

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