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Posted: Wed 20:51, 28 Aug 2013 Post subject: hollister Options Selling - 5 Simple Success Tips |
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If you buy an option, there's a 90% chance it will [link widoczny dla zalogowanych] expire worthless - therefore, the person who sold the option to you has a 90% chance of success.
Most traders don't consider selling options, as they see it as too risky - but the odds of success are high, and if you do [link widoczny dla zalogowanych] it correctly, you can reduce risk, and make huge profits over time, with the odds firmly on your side.
How to Sell Options
Selling options offers unlimited risk, with limited profit - and that's [link widoczny dla zalogowanych] why many people don't like selling options. There's a high amount of risk for a low [link widoczny dla zalogowanych] reward - but to balance this, the odds of success are high - very high!
Options buyers think they have a great deal - with unlimited profits, and limited risk - but the odds are simply not in their favor. This is very similar to the losing gambler, who backs the outsider - sure, the rewards are fantastic [link widoczny dla zalogowanych] - but the chances of winning are slim.
The key to option selling, is that you're trading with the odds [link widoczny dla zalogowanych] firmly on your side - and you can improve your chances of success, by following these five tips:
1. Let time decay work in your favor - the less time an option has to expiry, the more time decay will hit value - increasing your odds of success.
2. Sell into price spikes, when markets move quickly, sell premium. Great markets are those that have had unsustainable price moves that are due a pullback.
Great markets to sell options in are ones driven by greed and fear.
Watch the papers and newswires for markets that have heavy public participation - and there are "sure fire" reasons the move will go on forever. You know the move won't go on forever, and a pullback will occur - and you can collect sizeable premiums from the inexperienced traders, who believe the hype.
3. Diversify your selling across a number of uncorrelated markets - keep in mind that you have unlimited risk, so don't have all your eggs in one basket.
Not every trade will go in your favor, and there will [link widoczny dla zalogowanych] be moves that see prices spike, to trade in the money against you - make sure you have a wide enough spread to cover losses.
4. If in doubt get out - if the option you have trades in the money, get [link widoczny dla zalogowanych] out and cover - to succeed in options selling requires great discipline in these situations.
5. Ensure you have [link widoczny dla zalogowanych] adequate capitalization - to hold [link widoczny dla zalogowanych] your positions to expiry.
In the short term the value of your portfolio will fluctuate so have enough reserves.
90% Odds of [link widoczny dla zalogowanych] Success - but a Warning!
Option selling is for experienced traders only - [link widoczny dla zalogowanych] those who have discipline, a sound method, and have the capital to diversify.
While the odds of success are high, before you start, make sure you approach option selling with the right mindset.
Take Advantage of the Buyers, and Collect their Premiums!
A long-term strategy, can and will make you huge profits over time. The odds of success are great - and there are plenty of inexperienced traders, buying options on broker recommendations, greed, and fear - which can, and will provide you with fantastic long-term gains.
Option selling is more lucrative than option buying - and this is not just a view - it's a fact.
To make money in options, learn how to sell correctly - and you're on the way to huge consistent profits.
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