options investing? (fund, calls, commission, investment)

[millerJ]

Does anyone on here mess around with short/long call options? I am looking try a few covered calls and was wondering if you guys know any good books on options investing? Thanks.

[howard555]

Originally Posted by millerJ

Does anyone on here mess around with short/long call options? I am looking try a few covered calls and was wondering if you guys know any good books on options investing? Thanks.

Just get some investment capital ready and jump in.
Even if you only sell one contract.
My Father bought every book he could find about Windows Vista, how to use the internet, etc.
After reading and highlighting texts in the many books, he could not even do e-mail properly.
He had a computer for 6 years and gave up.
He refused to sit down at the computer and DO what he saw in the books.

My advice is jump in with 1 covered call, and the option traders on this forum can talk about, watch, monitor your trade, with educational comments along the way.

Then again, there will be people who tell you to avoid options. It'a a mixed bag.

[shmoov_groovzsd]

^^ This.

Options are just a different flavor to investing and some people love it or hate it. I think for folks that are long term investors, they typically like specific stocks that they prefer to option because they might not know a lot about it, or did hear about it, but dont know much about the industry.

Case in point. I told a friend of mine to go bullish on Nokia stock back when it was $3.75ish. I work in this industry and feel I have a really good beat on the swing of things in this business. He does not, so I told him to buy a bunch, lock the key away and dont lift the lid for another 5 years.
He is very cautious and placed a put on the stock.

Fast forward to now and the stock is under $2. Now, while I am still bullish over the long term on Nokia, his 'put' saved him a bunch of dough 'right now.' For him, he feels very comfortable he was able to place that option on the stock because he doesnt know much about this industry and was going by some putz's (me) advice. lol

Just like Howard said, you can read all day, but you are going to have to practice at some point to see it in action. For people that are savvy investors and have various strategies, it seems to be a nice dynamic to have in place.

[howard555]

Originally Posted by shmoov_groovzsd

Case in point. I told a friend of mine to go bullish on Nokia stock back when it was $3.75ish. I work in this industry and feel I have a really good beat on the swing of things in this business. He does not, so I told him to buy a bunch, lock the key away and dont lift the lid for another 5 years.
He is very cautious and placed a put on the stock.

Fast forward to now and the stock is under $2. Now, while I am still bullish over the long term on Nokia, his 'put' saved him a bunch of dough 'right now.'

Coincidence you bring up Nokia.
Last week, I paid 59 cents for 10 of the January 2014 $2.00 call options, or $590.00.
I sold the August $2.00 call option for 12 cents.
If the stock closes August 17th at $1.99 or less, then I've got $470.00 invested and I control 1000 shares of Nokia.
If a takeover, or a turn-a-round does not happen by January 18th, 2014, then there was no need to buy the stock any way. That gives me 18 months for $470.00 to turn into ??.

I think Nokia will be dead, or alive and very well, by 1-18-2014.

millerJ:
So, I did a variation of a covered call.
I sold a call option against my long call option.
It's a covered call, same as if I had bought 1000 shares, and sold the August $2.00 calls.

[NJBOSCH]

Howard, just curious do you trade for a living? Retired and trade as a hobby? I do enjoy your examples you put out there for us to learn from.

[howard555]

Originally Posted by NJBOSCH

Howard, just curious do you trade for a living? Retired and trade as a hobby? I do enjoy your examples you put out there for us to learn from.

some of all of it, semi retired, manage my own retirement account, most gains stay in the account, some used for expenses.

[johnbassfinance]

I read a few good books on options (The Volatility Edge-Jeffery Augen, Fundamentals of Options Market-Michael Williams, The Power Curve-Scott Kyle) but howard555 is right you'll never be successful if you don't practice enough. I suggest starting small/short-term until you master the basics and start to notice general trends in the market.

[mortimer]

Originally Posted by howard555

My advice is jump in with 1 covered call, and the option traders on this forum can
talk about, watch, monitor your trade, with educational comments along the way.

That is the exact advice I would give.

It's just like buying stocks. Going out and doing "paper trades" is silly. I have a friend
that wanted to learn, so I finally cajoled her into buying $200 worth of five different stocks.

It's irrelevant that the commission cost is 5% of the position.

It doesn't matter if you win or lose at first. Nothing trains like having skin in the game.

Actually, I have found that early winners think they are god and then jump in with too
much money ( ie. more than they can afford or stand to lose ) and then they lose. -- ouch!

Jump in the pool. The water is freezing.