Trading US options

[greekgeek]

anyone else here trade US stock options? I'm using moomoo atm to trade vanilla stocks but i noticed that they have a very detailed options quote page that seems to be dynamic live quotes, and its free. I called and asked about it and they said we will be able to trade US options in July. I've looked at a few other platforms and none seems to offer the amount of market data on options that moomoo is providing?

 

[rcw1]

Good evening @greekgeek

You can trade US Options through CommSec.

Contact particulars are as follows:

Options​

Call 1800 245 698
Overseas? Call +61 2 9115 2990
8am to 5.30pm, Sydney time, Monday to Friday

Have a great Sunday.

Kind regards
rcw1

 

[greekgeek]

yea i have traded options through commsec before, its not very user friendly though. To get decent quotes you have to call them and then price isn't cheap. right now platforms like moomoo and tt are providing options chains on screen with profit-loss analysis charts

 

[DaveTrade]

@greekgeek I'm using Saxo at the moment but I'm looking at changing to Tastyworks, both are now located in Australia.

 

[greekgeek]

oh ok let me try Tastyworks, did hear a friend mention them before. Saxo has had a bad name though iirc

 

[Gunnerguy]

I use IBKR. Contract pricing I believe is way cheaper than ComSec

 

[Seeking Truth]

How do Australian options traders manage the US market open times? Do you stay up late or get up early?

 

[DaveTrade]

How do Australian options traders manage the US market open times? Do you stay up late or get up early?

@Seeking Truth I do my entries and exits around the open of the market so I stay up late. I trade daily and weekly time frames.

 

[Seeking Truth]

Thanks Dave. How long have you been trading? I’ve been trading crypt for about 3 years but recently I’m been reading up on options and I really like the sounds what what can be done with them with regards to risk management. I have a reasonable size bank so I was thinking of starting with the wheel strategy and then maybe add in some credit spreads.

 

[wayneL]

How do Australian options traders manage the US market open times? Do you stay up late or get up early?

I beat the sparrows up in the morning.

Mainly because I am 3/4 comatose by market open at night, but at least approaching 75% cognizant in morning.

 

[DaveTrade]

Thanks Dave. How long have you been trading? I’ve been trading crypt for about 3 years but recently I’m been reading up on options and I really like the sounds what what can be done with them with regards to risk management. I have a reasonable size bank so I was thinking of starting with the wheel strategy and then maybe add in some credit spreads.

I've had some experience trading futures years ago and stopped trading when my broker went into liquidation. I've come back to trading but this time I decided to learn options for the same reason as you, the ability to safely manage risk, I've learnt enough to trade with options but still have more to learn. I'm not familiar with a strategy called 'wheel' but I am learning the many ways that options can be traded and I'm very glad that I decided to go down this path. With options there are so many ways to take money out of the markets with your risk fully controlled. One thing that I like about trading the open is that I have all day after the close in the morning to look at my positions and decide what I need to do. All the best mate on your options journey.

 

[wayneL]

.I'm not familiar with a strategy called 'wheel'

If any option trader wants a huge epiphany, study synthetics.

"The Wheel" is simply being in a short put position, or the synthetic version thereof, ie covered call.

The wheel invents a whole trade management protocol surrounding the selection of strikes etc, which may or may not optimise returns (mostly not, but subject to randomness). However, there is no getting away from the fact that you're trading short puts at all times.

IME if premium collection is the goal, there are better ways to go about this.

It should be compared to buying and holding stock. As mentioned above there is an element of randomness as to which will be more profitable in the final analysis, but the strategy will reduce volatility.

The elephant in the room is taxation as you will be creating many taxable events which may reduce your after tax profit in the final analysis.

 

[DaveTrade]

If any option trader wants a huge epiphany, study synthetics.

"The Wheel" is simply being in a short put position, or the synthetic version thereof, ie covered call.

The wheel invents a whole trade management protocol surrounding the selection of strikes etc, which may or may not optimise returns (mostly not, but subject to randomness). However, there is no getting away from the fact that you're trading short puts at all times.

IME if premium collection is the goal, there are better ways to go about this.

It should be compared to buying and holding stock. As mentioned above there is an element of randomness as to which will be more profitable in the final analysis, but the strategy will reduce volatility.

The elephant in the room is taxation as you will be creating many taxable events which may reduce your after tax profit in the final analysis.

I googled the wheel strategy to get the detailed description and I have heard about this method of trading but I didn't know it had a name. It looks like a good trading method if you get the key element right, that being stock selection. I'm not quite ready to go down this path, maybe something I will look at in the future.

 

[Seeking Truth]

If any option trader wants a huge epiphany, study synthetics.

"The Wheel" is simply being in a short put position, or the synthetic version thereof, ie covered call.

The wheel invents a whole trade management protocol surrounding the selection of strikes etc, which may or may not optimise returns (mostly not, but subject to randomness). However, there is no getting away from the fact that you're trading short puts at all times.

IME if premium collection is the goal, there are better ways to go about this.

It should be compared to buying and holding stock. As mentioned above there is an element of randomness as to which will be more profitable in the final analysis, but the strategy will reduce volatility.

The elephant in the room is taxation as you will be creating many taxable events which may reduce your after tax profit in the final analysis.

By synthetics do you mean synthetic cover calls?

 

[Seeking Truth]

I googled the wheel strategy to get the detailed description and I have heard about this method of trading but I didn't know it had a name. It looks like a good trading method if you get the key element right, that being stock selection. I'm not quite ready to go down this path, maybe something I will look at in the future.

As will any strategy picking the right stocks is critical. The wheel strategy is great for those with larger accounts that are happy to take ownership of the stock that is being optioned. It will likely cap your upside in strong markets as calls do, but would give a much better return on flat or falling markets.

 

[wayneL]

By synthetics do you mean synthetic cover calls?

The covered call is the synthetic, the short put being the natural.

 

[wayneL]

As will any strategy picking the right stocks is critical. The wheel strategy is great for those with larger accounts that are happy to take ownership of the stock that is being optioned. It will likely cap your upside in strong markets as calls do, but would give a much better return on flat or falling markets.

Unpopular opinion in the optionosphere... If picking the right stock is critical and you are good at picking the right stock you will get better results by just buying and holding, or trend trading.

Option pricing at its basis is akin to insurance; it assumes (correctly) that we actually don't know what the fark is going to happen next, so reshapes risks in a nonlinear fashion which is not apparent to novices.

The answer here resides in understanding the Greeks. Trading stocks or futures will deliver you a Delta 1 or -1.

Options introduces different aspects of risk, the first order of which includes Delta, but also Gamma, Vega, Theta and (increasingly) Rho.

Canned strategies such as offered by so-called option education operations, such as systematic covered calls, credit spreads etc will never work in the long-term... Not over and above simple buy-and-hold.

What options do do, is to afford us the opportunity to reshape our risk according to how we see that risk unfolding in the term that we are looking at, or at least insuring against those fat tails that appear annoyingly often.

The best book that I can recommend if you can still get hold of it is Charles Cottle's "Options - Perceptions and Deceptions".

 

[StockyGuy]

Unpopular opinion in the optionosphere... If picking the right stock is critical and you are good at picking the right stock you will get better results by just buying and holding, or trend trading.

Option pricing at its basis is akin to insurance; it assumes (correctly) that we actually don't know what the fark is going to happen next, so reshapes risks in a nonlinear fashion which is not apparent to novices.

The answer here resides in understanding the Greeks. Trading stocks or futures will deliver you a Delta 1 or -1.

Options introduces different aspects of risk, the first order of which includes Delta, but also Gamma, Vega, Theta and (increasingly) Rho.

Canned strategies such as offered by so-called option education operations, such as systematic covered calls, credit spreads etc will never work in the long-term... Not over and above simple buy-and-hold.

What options do do, is to afford us the opportunity to reshape our risk according to how we see that risk unfolding in the term that we are looking at, or at least insuring against those fat tails that appear annoyingly often.

The best book that I can recommend if you can still get hold of it is Charles Cottle's "Options - Perceptions and Deceptions".

Oh, I thought options also allows you to use leverage in a particular way. I also thought a very knowledgeable options trader can have a reliable edge cos the topic is rather hard to understand WELL (too hard for me, I concede ).

 

[DaveTrade]

If picking the right stock is critical and you are good at picking the right stock you will get better results by just buying and holding, or trend trading.

Wayne I think that I can clarify what I meant and @Seeking Truth meant by 'picking the right stock', I meant the right stock for that particular strategy.

The rest of your post comes across as someone trying to sound like an expert on a subject without actually saying anything about it's application and finishing by recommending a book.

 

[wayneL]

Wayne I think that I can clarify what I meant and @Seeking Truth meant by 'picking the right stock', I meant the right stock for that particular strategy.

The rest of your post comes across as someone trying to sound like an expert on a subject without actually saying anything about it's application and finishing by recommending a book.

Cool, won't bother casting pearls before swine then.