LEAPS TRADING: tell me more (tell me more)
 

I've been reading the turtle trading site, some guy named terry that is selling his services and investipedia. But I'm interested in learning more. Do you guys know of any quality books on trading LEAPS? I'm looking for something that I can actively manage, trade, and wrap my head around.

I'm interested in buying/selling call options and executing in short order- days and weeks.

Someone please lead me up the mountain; I can roll back down on my own.

Re: LEAPS TRADING: tell me more (tell me more)
 

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I'm interested in buying/selling call options and executing in short order- days and weeks.


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executing the options early after just buying them?

Re: LEAPS TRADING: tell me more (tell me more)
 

No not executing the option, but selling in a short amount of time vs holding long-term. Buying low and getting rid of it soon after it starts to trend up.

Re: LEAPS TRADING: tell me more (tell me more)
 

LEAPS are just longer term options, usually expiring in a year or longer.

What you want to do is learn option theory as all LEAPS are just options. Since they are longer out they hold more time premium which decreases at a slower rate due to the length of the contract. They are also more vulnerable to moves in volatility.

I use LEAPS as both hedges and parts of speculative spread trades. But for these contracts you should have a good grasp of option volatility or "vega" because you can get a move supposedly in your direction while volatily drops and your option loses value due to the volatility changes. Visa versa is also very possible. In actuality volatility has more of a force on prices of these things than price movement in many instances. The closer you get to expiration price moves and time decay start to overshadow volatility.

Get a good options book and read up!

Re: LEAPS TRADING: tell me more (tell me more)
 

Thanks Mr. Baseball I got some books last night and I have began studying options. Where do most ppl learn how to trade options (college or on-the-job training?)

I should have been a finance major- time machine here I come...

Re: LEAPS TRADING: tell me more (tell me more)
 

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Thanks Mr. Baseball I got some books last night and I have began studying options. Where do most ppl learn how to trade options (college or on-the-job training?)

I should have been a finance major- time machine here I come...

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on-the-job + training is probably the best.

but there are great books out there. the (i think it was hull's) "derivative securities" book is great and breaks down options pretty well.

Barron

Re: LEAPS TRADING: tell me more (tell me more)
 

Gotta agree with Dcfir, on the job training crushes anything you can really learn from a book.

But if thats not an option the Hull book is excellent and I would also recommend Option Volatility and Pricing by Natenberg. My old firm used that instead of Hull as its primary "textbook".

Re: LEAPS TRADING: tell me more (tell me more)
 

thanks for the suggestions. I don't have any on the job training to support me (poli sci major:(.) I'm going at it solo.

Re: LEAPS TRADING: tell me more (tell me more)
 

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thanks for the suggestions. I don't have any on the job training to support me (poli sci major:(.) I'm going at it solo.

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i just reread your initial post.

you are DOA if you're trying to get from polisci to options trading in weeks. not even a chance.

your portfolio will likely be losing money since you don't have a) experience, b) a grasp on finance in general, and c) deep knowledge of options.

LEAP options in particular are VERY sensitive to changes in implied probabilities & interest rates given their time horizon.

if you want to learn...full steam ahead.

if you want to try and trade...i'd give you an emphatic, HELL NO.

Barron

Re: LEAPS TRADING: tell me more (tell me more)
 

Bubble, if you want to read up on options, read the books by McMillan.

Do not jump in with money you can't afford to lose.

Re: LEAPS TRADING: tell me more (tell me more)
 

nassim taleb's options book is probably better than hull for someone with no support structure.

Re: LEAPS TRADING: tell me more (tell me more)
 

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I would also recommend Option Volatility and Pricing by Natenberg

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I've never read the book but this is probably good advice. My initial options training was a series of video lectures by Natenburg. From what I know of him I'm sure his book is on the money. Understanding your greeks (delta, vega, theta and gamma) are very important for anyone who seriously wants to trade options.

But like others have mentioned experience is of key importance. If you stay small while learning with a safeish spread strategy you can learn without a great deal of risk. Be aware that options "juice" is generally prohibitive at most places for small options players and good spread execution can be trying at times.

Re: LEAPS TRADING: tell me more (tell me more)
 

These days most brokerages that can do spreads will post your bid/offer on the exchanges(ISE, PCX, etc) but that doesn't mean you'll get filled. And yes, comparatively dspeaking, option spreads are brutal for anything that is not very high volume. You can easily pay 20 cents or more on an eighty cent option.

Re: LEAPS TRADING: tell me more (tell me more)
 

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thanks for the suggestions. I don't have any on the job training to support me (poli sci major:(.) I'm going at it solo.

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i just reread your initial post.

you are DOA if you're trying to get from polisci to options trading in weeks. not even a chance.

your portfolio will likely be losing money since you don't have a) experience, b) a grasp on finance in general, and c) deep knowledge of options.

LEAP options in particular are VERY sensitive to changes in implied probabilities & interest rates given their time horizon.

if you want to learn...full steam ahead.

if you want to try and trade...i'd give you an emphatic, HELL NO.

Barron

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I do not have any illusions grandeur. I expect this to all be yet another series of wasted information that enters my brain, such is my course.