subject: Successful Options Trading Lesson - Understanding Options and How They Trade [print this page] Understanding how to trade options is a very power skills that many Wall Street professionals lack the skills needed to successfully navigate the options market. Using the StockMarketFunding.com proprietary options trading formulas and options trading calculator, we can teach you how options are really priced. Many retail traders and retail investors do not understand how to trade options or how options are really priced. To successfully learn how to trade options a trader must act like and trade with the market maker. A great example of that is the Google January 590 Put that had closed at $6.93 on 1-13-10. Has Google gapped down and the Put Options shot up to $9.10 where a lot of retail traders paid put for the put protection. 12 minutes into the trading day they dropped those contracts to $5.50 a 39% drop for the people who bought on the highs. On the other side of the trade, the Google January 590 Calls closed at $4.00 and there was a very quick drop down bid that took the contracts to $2.00 before they bounced to $5.90 in a 25 minute period. That represents a 295% return if you had your options orders out prior to the market opening. Volatility To be a successful options trader, traders need to learn to think and act like a market maker. Day trading firms often teach techniques that don't provide the level of skill needed to successfully navigate the options market. Watch a free options trading video HERE to learn more about how to trade options visit our website and sign up for the free 5 day online trading seminar. Visit the SMF Pro Trading School to learn more about stock trading visit our website and sign up for the free 5 day online trading seminar.
Successful Options Trading Lesson - Understanding Options and How They Trade
By: Brian Plain
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