options (finance)

[Kirkrrr]

Ja,

I'm currently in the process from transition to playing poker to a full time stock trader. I wanted to trade options/futures in the beginning but then went with stocks since imo there's a lot more info on it and it's easier to learn in the beginning than options, although options-trading does have advantages in that the spreads are narrower (and thus it's easier to profit) and depending on who you go with are your broker, commissions won't be very high. Here's the bad part about options trading, however: they expire. Since a chunk of the options price is time-value, the less time remains until expiration, the less it's worth thus it's always a race - not only do you have to "guess" correctly, you have to guess correctly in the alotted timeframe. That makes options trading FAR more difficult than everyone thinks in the beginning. Far as your questions, I will try to answer some, hopefully others will elaborate:

[ QUOTE ]
-are the parallels with poker really that strong?

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HUGE, and they can't be overstated. Both poker and trading are probabilistic fields, both require you to focus on the process rather than the results, good money management and discipline, and understand the role of time in that if your decisions are good results will take care of themselves. You will have major headstart on most beginning traders coming from a poker background.

[ QUOTE ]
-how feasible is his suggestion?

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I'd start with stocks or even forex before jumping into options. What you have to really and truly understand is that the market is a zero-sum game, so every dollar you make is a dollar another trader/investor just lost. When you hear how much money options traders make, well, lets just say they would roll out the red carpet for you and welcome you to the trading arena with open arms.

[ QUOTE ]
-how should I go about learning? I know nothing.

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There's lots of literature available on the subject. I went to www.tradingacademy.com. They aren't cheap but the stuff they teach you won't learn anywhere else. There's also www.elitetrader.com, a forum like 2p2 but dedicated to trading and all the aspects thereof.

Someone said about wrong decisions in the market resulting in greater losses. Umm, lol, no they don't. I daily take positions worth over 250k, the worst loss I've had has been about 1k. It's called stop-loss, and it's totally sweet. So you will have time to learn without fear of going broke in a week. In fact, that would take some really major effort on your part. But it does require a lot of study and patience. PM me if you have any other questions, I will try to answer best I can.

Kirk