Posts Tagged automated options trading

Making a Killing Trading Options on Financial System Weakness

Posted by Options Trading in Day Trading Options on May 1st, 2009

This has to have been one of the most lucrative periods in history for individual options traders to make money day trading.  With the way banks and institutions have had their hands tied for several quarters since the Lehman Brothers collapse, those who did continue to have access to credit have been fortunate indeed.   If you don’t know much about options or don’t want to manage a portfolio you can still use something like an option advising service to do it for you (read more about automated options trading).  If you have excess capital to day-trade, there probably is no better time in history than now due to the ‘house’ – the banks – has it’s hands tied and is unable to enter the market freely to take on risk.

It remains to be seen whether the Dow will ever dip below 7,000 again (don’t hold your breath) but there have been NUMEROUS good option picks to trade on the dips.  I’m not sure how much longer banks will be un-winding their leveraged positions and sorting out the credit-default swap mess but every time they are forced to dump shares on the market to ‘raise capital’ that is the moment to strike again into the options market for calls (see a basic call option example).

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No Comments updated June 13, 2010

Automated Options Trading the Wall Street Rally Makes Big Bucks

Posted by Barry Livingstone in Day Trading Options on April 9th, 2009

I shouldn’t have to say it, but the present recovery on Wall Street is really amping up the returns on my portfolio.  Because I use an automated options trading program I make my picks long in advance, wait for the market to move and the trades automatically excute while I eat caviar (well, ok, it’s tuna but what the heck).  My trades are programmed in such a way that I’m forced to buy low and sell high.  I don’t necessarily always buy at the bottom (though I must say I’ve done quite well), and I don’t always sell at the top either.  On the other hand the disciplined approach that is born of automation takes the worst part of emotion out of the equation.  In other words…

When I hit a buy price, the automated options trading program buys the specific number of contracts.

When I hit a sell price, the automatic options trading program sells the specified number of contracts.

At the end of the day (or week, or month, or quarter, or however long it takes) I consistently have more than when I started.  Stock prices became so battered in Q1 09 I can’t imagine there will be too many people who bought in during Q1 who will ultimately end up in the red.

If you want to read a bit more about automated options trading my buddy Martin Sage has written a couple of pieces on it.

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No Comments updated April 9, 2009