Options trading tools?
- Thread starter deriv108
- Start date
what you plan on doing?
you might have a look here.. derivagem the option price calculator used in hull:
http://www.rotman.utoronto.ca/~hull/software/
you might have a look here.. derivagem the option price calculator used in hull:
http://www.rotman.utoronto.ca/~hull/software/
How serious are you about trading?
ThinkorSwim and Interactive Brokers are great options brokers and have some descent analysis software.
Trade Station has an options module that is also very good and free with their brokerage.
I personally use Option Vue 6. They have their own data feed which is a little cheaper than the e-signal offering but you need to be devoted to spending a good $2000 or so a year in data and maintenance releases.
A lot depends on how you are going to trade. The great thing about Option Vue and OptionStation (Trade Station) is that they have their own scanning and position finding modules. For example in Option Vue you can give it a predicted range or volatility level for a given date range and then choose what kind of strategies you like (covered calls, condors, straddles, etc) and the amount of capital you want to risk and give you an optimal strategy.
Another great site which is cheaper but very good is Ivolatility.com.
Just remember that trading options is about two things, 1) trading options - not trading the underlying and 2) position management. I also recommend Jeff Augen’s book “The Volatility Edge”, it’s a must read before you trade.
ThinkorSwim and Interactive Brokers are great options brokers and have some descent analysis software.
Trade Station has an options module that is also very good and free with their brokerage.
I personally use Option Vue 6. They have their own data feed which is a little cheaper than the e-signal offering but you need to be devoted to spending a good $2000 or so a year in data and maintenance releases.
A lot depends on how you are going to trade. The great thing about Option Vue and OptionStation (Trade Station) is that they have their own scanning and position finding modules. For example in Option Vue you can give it a predicted range or volatility level for a given date range and then choose what kind of strategies you like (covered calls, condors, straddles, etc) and the amount of capital you want to risk and give you an optimal strategy.
Another great site which is cheaper but very good is Ivolatility.com.
Just remember that trading options is about two things, 1) trading options - not trading the underlying and 2) position management. I also recommend Jeff Augen’s book “The Volatility Edge”, it’s a must read before you trade.
- Thread starter
- #4
Given the time constraints(FT jobs and CFA studying), active trading is impossible now. I would like to practice some options trading in my personal account as an investors, and have some reasonable basis when placing, tracking and exiting a position.
Thanks, guys. I’ll take a look at those sites and tools.
Thanks, guys. I’ll take a look at those sites and tools.
The best thing to do is educate yourself as much as possible. Read Augen’s book, read some basic intro to option books and then paper trade. Dont trade in real life until you can consecutively make money for a few months. I would open a paper account with IB or Thinkorswim.
sebrock,
I actually beg to differ in this context. Paper account is contra productive. You will make money, think it is easy to trade in the markets and then the market will teach you discipline, being humble and not too greedy.
chad,
If I were you, I’d start trading with oanda for forex. However, be extremely careful because forex is a damn hot place to be for a newbie. The good thing about oanda is that you can trade your own ‘units’ hence you can start out very small. Do not overestimate yourself. In the first year you need to be breakeven. That is your goal. It is NOT to make huge amounts of money. Cover the commission (oanda does not even charge you commission if i remember correctly for forex) and the spreads are pretty small.
The best teacher is the market itself. So get used to the basics (books, internet, blogs..), write down your plan and then start out small. The goal you should have is to not lose and be grateful for every day you are allowed to trade the markets.
I actually beg to differ in this context. Paper account is contra productive. You will make money, think it is easy to trade in the markets and then the market will teach you discipline, being humble and not too greedy.
chad,
If I were you, I’d start trading with oanda for forex. However, be extremely careful because forex is a damn hot place to be for a newbie. The good thing about oanda is that you can trade your own ‘units’ hence you can start out very small. Do not overestimate yourself. In the first year you need to be breakeven. That is your goal. It is NOT to make huge amounts of money. Cover the commission (oanda does not even charge you commission if i remember correctly for forex) and the spreads are pretty small.
The best teacher is the market itself. So get used to the basics (books, internet, blogs..), write down your plan and then start out small. The goal you should have is to not lose and be grateful for every day you are allowed to trade the markets.
barthezz Wrote:
——————————————————-
> sebrock,
>
> I actually beg to differ in this context. Paper
> account is contra productive. You will make money,
> think it is easy to trade in the markets and then
> the market will teach you discipline, being humble
> and not too greedy.
>
> chad,
>
> If I were you, I’d start trading with oanda for
> forex. However, be extremely careful because forex
> is a damn hot place to be for a newbie. The good
> thing about oanda is that you can trade your own
> ‘units’ hence you can start out very small. Do not
> overestimate yourself. In the first year you need
> to be breakeven. That is your goal. It is NOT to
> make huge amounts of money. Cover the commission
> (oanda does not even charge you commission if i
> remember correctly for forex) and the spreads are
> pretty small.
>
> The best teacher is the market itself. So get used
> to the basics (books, internet, blogs..), write
> down your plan and then start out small. The goal
> you should have is to not lose and be grateful for
> every day you are allowed to trade the markets.
>
>
He’s talking about trading options. If you have never traded before and have not traded options, I give the average person about two months before their account is wiped out. Options trading is about trading options, not the underlying so unless you really get this you should not be trading real money. The other thing to do is to start real small, maybe 1 contract at a time.
For stocks, I would agree but with options you will most likely not make money easily paper trading.
——————————————————-
> sebrock,
>
> I actually beg to differ in this context. Paper
> account is contra productive. You will make money,
> think it is easy to trade in the markets and then
> the market will teach you discipline, being humble
> and not too greedy.
>
> chad,
>
> If I were you, I’d start trading with oanda for
> forex. However, be extremely careful because forex
> is a damn hot place to be for a newbie. The good
> thing about oanda is that you can trade your own
> ‘units’ hence you can start out very small. Do not
> overestimate yourself. In the first year you need
> to be breakeven. That is your goal. It is NOT to
> make huge amounts of money. Cover the commission
> (oanda does not even charge you commission if i
> remember correctly for forex) and the spreads are
> pretty small.
>
> The best teacher is the market itself. So get used
> to the basics (books, internet, blogs..), write
> down your plan and then start out small. The goal
> you should have is to not lose and be grateful for
> every day you are allowed to trade the markets.
>
>
He’s talking about trading options. If you have never traded before and have not traded options, I give the average person about two months before their account is wiped out. Options trading is about trading options, not the underlying so unless you really get this you should not be trading real money. The other thing to do is to start real small, maybe 1 contract at a time.
For stocks, I would agree but with options you will most likely not make money easily paper trading.
chad17 Wrote:
——————————————————-
> I checked out thinkorswim. Dude, that stuff is
> hardcore. I mean, by the looks of it, it’s a
> proper portfolio management tool where you can
> monitor a lot of things at the same time, and
> things get pretty complex. Is there anything
> simple to start off with?
It’s actually pretty easy to use and they have a ton of video tutorials and learning instruments.
——————————————————-
> I checked out thinkorswim. Dude, that stuff is
> hardcore. I mean, by the looks of it, it’s a
> proper portfolio management tool where you can
> monitor a lot of things at the same time, and
> things get pretty complex. Is there anything
> simple to start off with?
It’s actually pretty easy to use and they have a ton of video tutorials and learning instruments.
This could be useful (and it’s free):
http://www08.wolframalpha.com/input/?i=options
http://www08.wolframalpha.com/input/?i=options
> I give the average person about two months before
> their account is wiped out.
agree. but here i think that the trader has to go bankrupt at least once if not twice. after you wipe out your account you know what ‘freedom’ truly means and how to control your emotions (what psychological factors are important, etc..).
I know that options trading is different from daytrading, but I see a lot of parallels. You will never start out and always make money. The day will come when you wipe out your account no matter what, and I personally think it is better to wipe out a small account while learning than being successful and destroying a huge amount afterward. Or put differently: Do you know of any traders that did not wipe out their account at least once? It is part of the process and people who start trading need to understand that trading is
a) a business and
b) you compete with the best in the world.
But there is enough of the pie for all of us..
> their account is wiped out.
agree. but here i think that the trader has to go bankrupt at least once if not twice. after you wipe out your account you know what ‘freedom’ truly means and how to control your emotions (what psychological factors are important, etc..).
I know that options trading is different from daytrading, but I see a lot of parallels. You will never start out and always make money. The day will come when you wipe out your account no matter what, and I personally think it is better to wipe out a small account while learning than being successful and destroying a huge amount afterward. Or put differently: Do you know of any traders that did not wipe out their account at least once? It is part of the process and people who start trading need to understand that trading is
a) a business and
b) you compete with the best in the world.
But there is enough of the pie for all of us..
barthezz Wrote:
——————————————————-
“but here i think that the trader has to go
> bankrupt at least once if not twice. after you
> wipe out your account you know what ‘freedom’
> truly means and how to control your emotions (what
> psychological factors are important, etc..)”
So so true. Unless you become a student of the market and yourself, you will never be a good trader and that takes years and a lot of losses. But I still think you can make the process less painfull by paper trading - especially options. It’s like car racing, maybe it takes a few crashes to really learn to control the car, but you should learn to drive the car before you get on the track. Paper trading options is learning to drive that car. The mechanics are much more different than the non-derivative.
As an aside, just because you make money trading for a bank, does not make you a good trader. Almost anyone can trade flow (ok not everyone, but you know what I mean). Personally, I have not traded myself in years, I let my computers do the trading and you know what, I have been profitable since then.
Before the computers, I put thousands of hours trading for a bank, a hedge fund, developing trading systems and reading hundreds of books on all different aspects. It took a lot of hard work and probably close to $100k of my own money before I finally got it. Now I do and the investment has been extremely rewarding.
——————————————————-
“but here i think that the trader has to go
> bankrupt at least once if not twice. after you
> wipe out your account you know what ‘freedom’
> truly means and how to control your emotions (what
> psychological factors are important, etc..)”
So so true. Unless you become a student of the market and yourself, you will never be a good trader and that takes years and a lot of losses. But I still think you can make the process less painfull by paper trading - especially options. It’s like car racing, maybe it takes a few crashes to really learn to control the car, but you should learn to drive the car before you get on the track. Paper trading options is learning to drive that car. The mechanics are much more different than the non-derivative.
As an aside, just because you make money trading for a bank, does not make you a good trader. Almost anyone can trade flow (ok not everyone, but you know what I mean). Personally, I have not traded myself in years, I let my computers do the trading and you know what, I have been profitable since then.
Before the computers, I put thousands of hours trading for a bank, a hedge fund, developing trading systems and reading hundreds of books on all different aspects. It took a lot of hard work and probably close to $100k of my own money before I finally got it. Now I do and the investment has been extremely rewarding.
seb mate, talking about losing $100k is not very encouraging stuff for a newbie, haha.. I’m getting the hang of TOS btw. There’s so many software’s out there and they all say they’re the best. How on earth is someone that’s new to this supposed to make a choice?
Out of curiousity, what’s a good amount to start off with real trading? The reason I ask is cuz I’ll use that same amount with a demo account and get the hang of it..
Out of curiousity, what’s a good amount to start off with real trading? The reason I ask is cuz I’ll use that same amount with a demo account and get the hang of it..
the $100k was over a long period of time so not as bad as it sounds and it includes software, data feeds, etc. Dont be discouraged, I have gotten a fantastic return on my investment. Let’s just say that I am doing the CFA more as a method of “deliberate practice” than for career purposes (I already have an MBA in Finance from NYU Stern).
I think it all depends on how much money you plan to make trading. If it’s just for messing around I would say $15,000 ought to do it. If you start trading option then you will most likely want to learn a good writing strategy and that is enough to get you started.
I think it all depends on how much money you plan to make trading. If it’s just for messing around I would say $15,000 ought to do it. If you start trading option then you will most likely want to learn a good writing strategy and that is enough to get you started.