LEAPS TRADING: tell me more (tell me more)

[DcifrThs]

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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

[mal_noles]

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".

[Bubble Bully]

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.

[DcifrThs]

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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

[Bubble Bully]

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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.

[/ QUOTE ]

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.

[mrbaseball]

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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.

[pig4bill]

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.