Options: Strategy or Gambling?
Firstly, showing my recent option trade as its always important to walk the talk than the opposite. ![]()
Bought some $Apple (AAPL.US)$ options recently and made a small profit. (Details as shown) forgot whats my actual profit as i sold it on 2nd not 1st. ![]()
I feel like mostly everyone else, I’m a casual investor. Joined moomoo as the 1st platform I’ve used to self manage my portfolio.
Started my journey by trading normally (buying / selling stocks), I’ve always felt options was too risky as i didn’t understand whats puts or calls, what it means to buy or sell puts or calls.
Through MooMoo learn, i got more knowledge on option trading and my initial thought was never to sell calls or puts period. It was too scary to have unlimited loss if you short sell a call or put. Too scary for me as a casual investor.
To start off, Chains are the 1st thing you learn for trading options. Find the option expiry date that you are comfortable with as the further away the expiry the more expensive is the option for the same strike price. (Note, options with less than a week to expiry is almost worthless already. Previous noob mistake. ![]()
Some tools that I reference (Volume & Open interest by Strike price) to check which option is more popular and at which strike price. (You can toggle put/call/total)
Unusual Activity: helps to let you know what some wealthy dude/company is positioning. Especially recent positions taken, price and expiry of the option.
P/L Analysis: helps you understand your position if you attempt and probability of it occuring.
(If your holding stocks the graph changes as shown. you can toggle and try it.)
Made some errors when I 1st started buying options $Tesla (TSLA.US)$ and chalked it up to learning journey such as making multiple options trades in a day which resulted in lots of transactional/platform fees for option. (My fault for not reading the fees for options ![]()
, I assumed its the same for stocks.) Why did i even transacted more than 30times in a day you might ask, its due to buying too high so i tried to sell and buy to cover that initial position.
This happens when you buy just before the stock reaches 1week to expiry. It falls alot… ![]()
You may win some and lose some in your journey. Don’t be discouraged and most importantly don’t gamble your lifesavings away. I always believe to diversify my portfolio to have a little options to boost my investments but I mostly buy stocks and keep them in funds when I sell my positions.
Showing the Long Collar strategy to guard against downside risks, which could hedge risks like a Long Protective Put and generate extra income like a Covered Call simultaneously. For this trade I’ve 1️⃣ bought $NIO Inc (NIO.US)$ at $7.50/share a few days ago, today shows a paper gain of 7.9%. 2️⃣Bought Put option 0.34 with a strike price at 7 (I have the right to sell the stock at $7). 3️⃣Sold Call option to earn some premium 0.62, strike price 8.50 thats paying for the Put 0.34 that I bought earlier. Both options Put/Call expires on June 23.
Hopefully what I’ve shared especially from my casual investment/ learning journey will help you on yours. ![]()
Leave a comment on your learning journey. We can all benefit from it. ![]()
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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2024H1 Moomoo Alchemist
Investing casually and learning as I go.
My journey to double my 💰at the min.
While sharing journey w kindred souls.
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Ravi_Sharma : useless in moonno because need to pay 50% as various fee
CasualInvestor OP Ravi_Sharma : Do check your cost (fees and commission). I don’t think it’s 50%, as it depends on your position and strategy.
Ravi_Sharma CasualInvestor OP : I have paid 50% of my profit for BBBY option for 100 qty. My profit was 300 and I paid 161.xxx for fee. i have already shared and reported it. Other users also advise that here option cost is dam high and I will be moving to Webull for option, which is totally free. pls see snapshot below. Moomoo team is aware about it though feedback..email and post.
Ravi_Sharma CasualInvestor OP : see below make 300 profit and fee paid 161.xx + 141.xx so what I got ? is it 50% plus of profit or no ?
CasualInvestor OP :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
That’s why I don’t deal with a few cents options. Not profitable it seems.
CasualInvestor OP : Same when trading penny stocks. If you add the costs it may eat a huge chunk from profits.
101873692yes Ravi_Sharma : Agreed. The option fees charges is really exp as compared to other platform. Thinking of changing as well.
Ravi_Sharma 101873692yes : sorry I posted here only one..and later posted buy and sell both..when add up fee then I paid more then 100% of my profit...which was 300+ so my profit was -2...
now tell me....it's redicolus or no ?
Ixy The Cat : Maybe that's why moomoo aggressively getting people to try options trading
Ganesh P : This is outright robbery.....
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