Some tips if your getting into the options market

Let me start off by saying I am by no means a financial expert. I have

gotten a lot better over time dealing with options but I also made stupid

mistakes that could have been easily avoided. Some of these I am sure you

will know and some you might not. I hope though everyone at least gets

something good from reading this.

First lets start off with what should be the most obvious don’t put in more

than you can afford to lose it’s simple but easy to mess up if you believe

your for sure going to win. Second is when you do attempt the options

market I would set at the least a stop loss because if you don’t you could be

like me and lose thousands because “your sure it will turn around”.

This leads me to my third tip if you are going to play the short game I

wouldn’t leave an option out more than an hour or two if that. When the

options strike date becomes closer and closer the chance of what your

hoping to hit will get smaller and smaller. I will do my best to explain this

but I don’t completely understand the ins and outs of thetas and betas that

have effect on options, but a simple rule is the farther out a strike date the

higher that option will cost. Let’s say your options strike date ends that day

an out-of-the-money option might only cost like 5 or 10 cents (you have to

buy times 100 so those would be $5 or $10) but an hour later even though

the stock price might not move at all that 5 or 10 cents might only be worth

3 to 7 cents ($3 to $7) you just lost $2 and the stock didn’t move at all. That

is why options with strike dates close are more of a gamble imo at least.

Now in that same instance if that strike date say was 2 months away that

option at the same out-of-money point might instead be 20 or 30 cents ($20

to $30) but won’t move as much in that same hour since 1 hour won’t have

much effect on an option 2 months away unless the stock price shifts

obviously. Both those examples are just random numbers to give you a bit

of an idea of how it works

This is less of a tip and a hopefully you already know this if getting into

options but just in case. In-the-money options are when the stock is

already at the strike price. For example, say the stock is currently at $50

and you wanted to do a call (you believe the stock will go above this price

so it’s good if it’s over $50) any strike price below $50 is in the money, and

will cost more to buy into; while the further out-of-money you go the

cheaper the option will cost you but the riskier it is. Out of the money is

the opposite so in that example if the strike price is $50 anything above $50

is considered out of the money.

This will be very quick but the exact opposite goes for puts(believe a stock

price will fall), so out-of-the-money for a stock currently at $50 anything

under $50 would be considered out-out-of-the-money and anything above

$50 would be in-the-money.

Lastly and this is probably common since, but the more leg work you put

into research before you start attempting options the more likely you will

do better. This is mostly just hopefully helpful advice; dig in and do your

research. The more knowledge you have the better off you will be. Also,

remember that no matter how smart you are and no matter how much

research you do the market can be very fickle so expect to lose some times.

I also want to restate you should set up stop losses that can be a big help.

Sometimes those stop losses might hit you in the face. I once set a stop loss

at about a $10 loss it hit and sold and not an hour later that stock would

have made me over $100 but I have had many more times I wish I had put

a stop loss and lost a ton, so once you set that stop loss don’t regret it later.

Options are risky I have lost more than I have won at this point cause I

made all the wrong moves but I have been slowly (because I have less I can

risk) making it back. I don’t know what app you use or if you use desktop

stock market apps but I have been happy using webull there are many

other apps so, can’t say for sure it’s the best but out of the 3 I tried I like it

best. I wish you all the best and again remember DONT RISK WHAT YOU

CANT AFFORD TO LOSE.