As I am prepping for the next downside in Wall Street...

[glenn_herwig]

Okay so I am going to use PUT options to hedge some AAPL. Never used them before but I know a decent amount. My only question how many do I need to buy per share I own? 1 PUT for every share? Or do I need to buy 100? Or is each PUT representing 100 shares. If the hedge turns sideways I don't want to have to cough up 50k worth of apple Just kidding. But there is absolutely no info on how many PUT to shares info on google. Though someone here could help me out.

All the best,

Glenn

[towernick]

If you have to ask this question, you shouldn't be trading options.

[glenn_herwig]

Originally Posted by towernick

If you have to ask this question, you shouldn't be trading options.

I was asking for some constructive critisism. I read as much as I can everyday. For 19 years old I would say I am extremely advanced. I can go on and on about credit default swaps, subprime mortgages, currencies and so forth. I know I don't know everything but I strive to learn more and more. The only reason I was asking is because I understand the concept of options. I just can't seem to find any info on how many to purchase in relation to current shares one owns. That's all

[brandrea]

Originally Posted by towernick

If you have to ask this question, you shouldn't be trading options.

[towernick]

I totally get you and I didn't intend to come off negatively. However, you can lose a lot of money very quickly "learning" options. I suggest you sign up for one of the many sites that lets you trade options using play money. Then, once you get comfortable, you can dip your toes in with real money.

[glenn_herwig]

Originally Posted by towernick

I totally get you and I didn't intend to come off negatively. However, you can lose a lot of money very quickly "learning" options. I suggest you sign up for one of the many sites that lets you trade options using play money. Then, once you get comfortable, you can dip your toes in with real money.

Exactly what I was thinking. No reason to squabble a bunch of gains. And no worries. Again I'm young and still have lots to learn.

[RW16610]

I always find it interesting to read about the experiences of others in these situations. Here's an ongoing topic where some of the members here discuss trading:

http://www.rolexforums.com/showthrea...369434&page=17

For instances like that eTrade or one of the others should had the mobile app you can mess with until taking the plunge so to speak. I can never learn enough about trading and enjoy these discussions

[Etschell]

Options are a suckers game for most as is day trading. Dump into cash for a bit or physical gold.

[glenn_herwig]

Originally Posted by Etschell

Options are a suckers game for most as is day trading. Dump into cash for a bit or physical gold.

I wouldn't really call it day trading I've had apple for about a year now I would call it more as managing my risk. And as for the bullion couldn't agree more. Only thing I found it's kind of a rip off. You pay $2 over spot for silver and $50-$90 for gold so just to break even you need silver and gold to spike big time. With GLD etf your looking at $5.95 to $8.95 per 10 shares depending on the broker

[superdog]

Originally Posted by glenn_herwig

I wouldn't really call it day trading I've had apple for about a year now I would call it more as managing my risk. And as for the bullion couldn't agree more. Only thing I found it's kind of a rip off. You pay $2 over spot for silver and $50-$90 for gold so just to break even you need silver and gold to spike big time. With GLD etf your looking at $5.95 to $8.95 per 10 shares depending on the broker

Well, at 19 it sounds like you know everything.

I think you are good to go.

[SMD]

Originally Posted by superdog

Well, at 19 it sounds like you know everything.



I think you are good to go.

The one piece of the puzzle missing is to add leverage to all of this. If you want to do it right you need to juice those returns.

[Andy0331]

Originally Posted by glenn_herwig

And as for the bullion couldn't agree more. Only thing I found it's kind of a rip off. You pay $2 over spot for silver and $50-$90 for gold so just to break even you need silver and gold to spike big time.

Silver is tough on premiums over spot (10-20%), but you should be able to find reputable bullion dealers that sell gold at $15-$20 over spot. A $20 premium on a $1300~ purchase can be recovered pretty quickly. Of course, don't expect to get rich on PM; you should be looking for diversification with relative stability.

[locutus49]

I would avoid options unless you are very experienced. I've been investing in stocks for 40 years and never touched options.

[superdog]

I was always told, never ever touch options.

Can you win? Sure. Might be a big win too. But most likely you will get poor. Really really poor. Forever.

[FrankNYC]

Trading in options or margin is too risky for me. The most I'll do is do a triple leveraged s and p 500 etf like upro

[dbluevette]

Just buy real estate. That's about all of the advice I can give u.

[Dcdfinance]

Definitely start with a demo account and until you are consistently profitable in demo utilizing proven strategies and techniques, only then should you go live. Also remember to never oversize any given position and manage your exits/stops very well. One good strategy to look into is using Fibonacci and fib extensions. Really learn the markets and get comfortable with your daily support and resistance levels and adapt to the market on a daily basis.

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[Star Ferry]

So you already own Apple stock, but you want to hedge your risk by buying put options on Apple? The simplest way to shed your Apple-related risk is to just sell some of your shares.

You have to be in a position to make money. Don't be like the guy who chooses every number in roulette (and therefore loses money in all states of the world)

Anyway, the point of hedging is to isolate the risks you do want to take. For example, when I spent a summer working at a top credit hedge fund, they were buying all sorts of interest rate hedging instruments. Why? Because their expertise was betting on creditworthiness, among other things. They didn't want to be betting on interest rates. My issue with the opening post is that hedging isn't magic -- it costs money and should have a purpose.

[SMD]

Originally Posted by Star Ferry

My issue with the opening post is that hedging isn't magic -- it costs money and should have a purpose.

Bingo.

[520Matt]

To answer your question 1 option contract = 100 shares

[jhilly8982]

I have been a professional option trader for the past 10 years. Professionally I trade Eurodollar and U.S. Treasury options. In my personal account I stay away from options on equities, too many variables. Strike inventory of market makers, most pros are premium sellers of appl so they will crush the price you paid. Though appl moves around it is not a volatile company.

Why are you worried about hedging? The election? CNBC and other talking heads will have you believe that one outcome could create a black swan event. Which is bs. Like my man Taleb says, a black swan event isn't possible in a near 50/50 probability of who wins. Also, the market is very good at pricing in events and we won't see total chaos in one outcome over the other. There might be some pain, but all normal on the distribution side of things. Save your money, if appl goes down, buy more.

[locutus49]

This contains much wisdom.

PS: Long apple.

Originally Posted by jhilly8982

I have been a professional option trader for the past 10 years. Professionally I trade Eurodollar and U.S. Treasury options. In my personal account I stay away from options on equities, too many variables. Strike inventory of market makers, most pros are premium sellers of appl so they will crush the price you paid. Though appl moves around it is not a volatile company.

Why are you worried about hedging? The election? CNBC and other talking heads will have you believe that one outcome could create a black swan event. Which is bs. Like my man Taleb says, a black swan event isn't possible in a near 50/50 probability of who wins. Also, the market is very good at pricing in events and we won't see total chaos in one outcome over the other. There might be some pain, but all normal on the distribution side of things. Save your money, if appl goes down, buy more.

[subtona]

Originally Posted by glenn_herwig

Okay so I am going to use PUT options to hedge some AAPL.
Never used them before but I know a decent amount. My only question how many do I need to buy per share I own? 1 PUT for every share? ...

...

It doesn't sound like you know basic knowledge

And it doesn't sound like a good idea

[GB-man]

You shouldn't do it but if you do. Seek the advice of a professional options trader before doing anything. Also, is your account approved for options trading? You have to prove a level of education and experience to trade options normally and for good reason.

[glenn_herwig]

Originally Posted by GB-man

You shouldn't do it but if you do. Seek the advice of a professional options trader before doing anything. Also, is your account approved for options trading? You have to prove a level of education and experience to trade options normally and for good reason.

I submitted it yesterday. Don't think I am going to do it in the end after talking with some friends. The risk reward is too great for what I am trying to accomplish. I did open a Td think or swim paper money account so I can familiarize myself with them for the future.

[Etschell]

Originally Posted by glenn_herwig

I submitted it yesterday. Don't think I am going to do it in the end after talking with some friends. The risk reward is too great for what I am trying to accomplish. I did open a Td think or swim paper money account so I can familiarize myself with them for the future.

i can tell you if you time it right put options on 3x leveraged etfs and etns give you huge bang. you get 6x leverage.

[GB-man]

Originally Posted by Etschell

i can tell you if you time it right put options on 3x leveraged etfs and etns give you huge bang. you get 6x leverage.

We might as well trade the vix while we're at it.



Smart move OP.

[Etschell]

Originally Posted by GB-man

We might as well trade the vix while we're at it.



Smart move OP.

Lol the vix. Like going long 3x fubds ...

[Passionata]

All i can say GL !


iPhone/Tapatalk

[77T]

I can help a bit...the options strategy for newcomers to make a small fortune (works like 98% of the time no matter what)...

Here it is:
Start with a large fortune!

But maybe you'll beat the odds as a 2%'er


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