Welcome Guest ( Log In | Register )

8 Pages < 1 2 3 4 5 > » Bottom

Outline · [ Standard ] · Linear+

 Option Trading in Malaysia

views
     
kelvinlym
post Apr 19 2013, 07:09 PM

Yes, that was my car.
******
Senior Member
1,119 posts

Joined: Jun 2007
From: Kuala Lumpur


QUOTE(jenova @ Apr 19 2013, 10:35 AM)
So for example:

Your buy price of AAPL: USD400 x 100 unit. So total investment is USD40,000
AAPL current price: USD400
AAPL call option July 2013 450: USD3.00
In the beginning of the month, you write (sell) 100 unit of 450 call option, so you receive USD300 of premium.

Case 1) if AAPL goes USD460, your profit will be 450 - 400 = USD50. Is this correct?

How about the option losses? since you bought at USD3, if the AAPL price reached 460, the value of 450's option should be USD10, do we have to minus USD10-USD3= USD7 x 100 = USD700. The USD700 count as losses as well?
thx bro
*
I don't buy the options. I write them. Meaning I sell them.

If the underlying stock goes up to USD460, and if the options are exercised, my total loss per option is USD7.

However, my strategy is that blue chips do not have such volatile swings, and even if it does, fine, I'm happy to sell my USD400 stock at USD450.

Meaning my total gain is USD450-USD400-USD7=USD43

In short, this strategy is when I want to derive some income from slow moving stocks, where I don't mine selling at the strike price. I give up potentially higher gains of just holding the stock. I can of course limit my losses by covering my positions or buying the options back.
jenova
post Apr 19 2013, 07:33 PM

Casual
***
Junior Member
347 posts

Joined: May 2006
Understood, thanks for sharing smile.gif
jenova
post Apr 19 2013, 07:34 PM

Casual
***
Junior Member
347 posts

Joined: May 2006
QUOTE(kelvinlym @ Apr 19 2013, 07:09 PM)
I don't buy the options.  I write them.  Meaning I sell them.

If the underlying stock goes up to USD460, and if the options are exercised, my total loss per option is USD7.

However, my strategy is that blue chips do not have such volatile swings, and even if it does, fine, I'm happy to sell my USD400 stock at USD450.

Meaning my total gain is USD450-USD400-USD7=USD43

In short, this strategy is when I want to derive some income from slow moving stocks, where I don't mine selling at the strike price.  I give up potentially higher gains of just holding the stock.  I can of course limit my losses by covering my positions or buying the options back.
*
Thanks for sharing smile.gif

Any stable blue chips recommend ?


Kienergy
post Apr 23 2013, 01:01 AM

Getting Started
**
Junior Member
56 posts

Joined: Mar 2013
From: Kota Kemuning


QUOTE(jenova @ Apr 19 2013, 05:35 PM)
So for example:

Your buy price of AAPL: USD400 x 100 unit. So total investment is USD40,000
AAPL current price: USD400
AAPL call option July 2013 450: USD3.00
In the beginning of the month, you write (sell) 100 unit of 450 call option, so you receive USD300 of premium.

Case 1) if AAPL goes USD460, your profit will be 450 - 400 = USD50. Is this correct?

How about the option losses? since you bought at USD3, if the AAPL price reached 460, the value of 450's option should be USD10, do we have to minus USD10-USD3= USD7 x 100 = USD700. The USD700 count as losses as well?
thx bro
*
To clarify your example.

You did a covered call for AAPL for a net debit of USD397 ($400-$3). That is also your breakeven (BE).

Scenario 1: If APPL goes up to $450. Your share get called away ie. you sell your share at $450. Max profit is $53 (450-400 plus 3 from selling the option).
Please take note that it doesnt matter what price AAPL goes up by. By selling the 450call, it means you cap your max profit. Yes the option price will
also move up in relation to the price like your example above. But its only paper loss. By expiry day, the option will become 0 value and your stock will
called away for 450. Hence, your max profit is always $53. This is the reward profile of a covered call strategy. Mildly bullish on the stock and at the
same time earn income on the option.

Scenario 2: If AAPL goes down to $350 on expiry day, your loss will be $47 ($397-$350).

Scenario 3: If AAPL stay at $400. Your profit is $3 from selling the option. Hence its call income strategy.

Hope it clarifies your queries.
Kienergy
post Apr 23 2013, 01:03 AM

Getting Started
**
Junior Member
56 posts

Joined: Mar 2013
From: Kota Kemuning


QUOTE(Kienergy @ Apr 23 2013, 01:01 AM)
To clarify your example.

You did a covered call for AAPL for a net debit of USD397 ($400-$3). That is also your breakeven (BE).

Scenario 1: If APPL goes up to $450. Your share get called away ie. you sell your share at $450. Max profit is $53 (450-400 plus 3 from selling the option).
                Please take note that it doesnt matter what price AAPL goes up by. By selling the 450call, it means you cap your max profit. Yes the option price will
                also move up in relation to the price like your example above. But its only paper loss. By expiry day, the option will become 0 value and your stock will
                called away for 450. Hence, your max profit is always $53. This is the reward profile of a covered call strategy. Mildly bullish on the stock and at the   
                same time earn income on the option.

Scenario 2: If AAPL goes down to $350 on expiry day, your loss will be $47 ($397-$350).

Scenario 3: If AAPL stay at $400. Your profit is $3 from selling the option. Hence its call income strategy.

Hope it clarifies your queries.
*
Btw, don't play stocks that are triple digit in price if your account is small. You cannot weather the losses.
kelvinlym
post Apr 23 2013, 02:14 AM

Yes, that was my car.
******
Senior Member
1,119 posts

Joined: Jun 2007
From: Kuala Lumpur


QUOTE(Kienergy @ Apr 22 2013, 06:03 PM)
Btw, don't play stocks that are triple digit in price if your account is small. You cannot weather the losses.
*
Well, if I already owned the covered stock in question, I don't really lose anything except the value of the stock that I'm owning. I don't trade on margins except covered calls.

This strategy will cap my max possible gains from just holding the stock though, like you said. But in the meantime, I gain the premium + any dividends.

Thanks for elaborating it further. thumbup.gif
jenova
post Apr 24 2013, 09:28 PM

Casual
***
Junior Member
347 posts

Joined: May 2006
thanks for Sifu sharing ~ smile.gif
fttrader
post Jul 4 2013, 03:18 PM

New Member
*
Junior Member
35 posts

Joined: Jul 2012
QUOTE(Kienergy @ Apr 23 2013, 01:01 AM)
To clarify your example.

You did a covered call for AAPL for a net debit of USD397 ($400-$3). That is also your breakeven (BE).

Scenario 1: If APPL goes up to $450. Your share get called away ie. you sell your share at $450. Max profit is $53 (450-400 plus 3 from selling the option).
                Please take note that it doesnt matter what price AAPL goes up by. By selling the 450call, it means you cap your max profit. Yes the option price will
                also move up in relation to the price like your example above. But its only paper loss. By expiry day, the option will become 0 value and your stock will
                called away for 450. Hence, your max profit is always $53. This is the reward profile of a covered call strategy. Mildly bullish on the stock and at the   
                same time earn income on the option.

Scenario 2: If AAPL goes down to $350 on expiry day, your loss will be $47 ($397-$350).

Scenario 3: If AAPL stay at $400. Your profit is $3 from selling the option. Hence its call income strategy.

Hope it clarifies your queries.
*
Very well explained. Do you trade everyday and daytrade?
A-Noob-For-U
post Jul 6 2013, 11:12 AM

New Member
*
Junior Member
9 posts

Joined: Apr 2008


try out forex, good return biggrin.gif
fttrader
post Jul 8 2013, 11:23 AM

New Member
*
Junior Member
35 posts

Joined: Jul 2012
QUOTE(A-Noob-For-U @ Jul 6 2013, 11:12 AM)
try out forex, good return biggrin.gif
*
Forex uses margin to trade. Losses can run higher than the amount originally invested if no proper stop loss strategy is employed. But, high risk high gain.
adyze
post Jul 8 2013, 12:46 PM

New Member
*
Newbie
3 posts

Joined: Jul 2013
From: Ipoh, Malaysia


hi all everyone..............

im new here.......at this forum. i have only experience with trading forex online cool2.gif cool2.gif cool2.gif cool2.gif

so i can only tell u about forex trading and how easy make money with this. If u have a lof of money budget and also saving why not put your some money to trade forex???

which broker the best trade? how to trade? u can contact me for more info

TQ for your attention thumbup.gif thumbup.gif thumbup.gif thumbup.gif thumbup.gif
A-Noob-For-U
post Jul 9 2013, 09:11 AM

New Member
*
Junior Member
9 posts

Joined: Apr 2008


QUOTE(fttrader @ Jul 8 2013, 11:23 AM)
Forex uses margin to trade. Losses can run higher than the amount originally invested if no proper stop loss strategy is employed. But, high risk high gain.
*
If you're doing investment, everything uses margin , and forex you can't lose more than the amount u invested smile.gif
kentquah90
post Jul 9 2013, 10:13 AM

New Member
*
Junior Member
8 posts

Joined: Aug 2012
Hi everyone, I am interested in option trading but which platform do you guys trade in Malaysia? which platform is the best?

Thx in advance smile.gif
Kienergy
post Jul 12 2013, 04:10 PM

Getting Started
**
Junior Member
56 posts

Joined: Mar 2013
From: Kota Kemuning


QUOTE(kentquah90 @ Jul 9 2013, 10:13 AM)
Hi everyone, I am interested in option trading but which platform do you guys trade in Malaysia? which platform is the best?

Thx in advance  smile.gif
*
Firstly, have you had the proper education about stock options?


Kienergy
post Jul 12 2013, 04:15 PM

Getting Started
**
Junior Member
56 posts

Joined: Mar 2013
From: Kota Kemuning


QUOTE(fttrader @ Jul 4 2013, 03:18 PM)
Very well explained. Do you trade everyday and daytrade?
*
I trade only when I see good trades. I don't trade for the sake of trading.

My usual strategy is to trade at the beginning of the option month and wait for expiry. So you see, if my trade is correct, I don't need to trade everyday.
I only monitor the stock im trading and I only trade again if the price is not in my favour.

Anyway, there's alot more to it than just a few simple words. Trading decisions are very complicated sometimes.

Do you trade options too?
kentquah90
post Jul 12 2013, 05:34 PM

New Member
*
Junior Member
8 posts

Joined: Aug 2012
QUOTE(Kienergy @ Jul 12 2013, 04:10 PM)
Firstly, have you had the proper education about stock options?
*
Theoretically i know option but never experience practically.
Kienergy
post Jul 12 2013, 10:32 PM

Getting Started
**
Junior Member
56 posts

Joined: Mar 2013
From: Kota Kemuning


QUOTE(kentquah90 @ Jul 12 2013, 05:34 PM)
Theoretically i know option but never experience practically.
*
Have you attended any proper educational course for trading options or you learn it on some books and website?

If you are self learned then I don't suggest you start trading because it will be a very expensive tuition fee later. If you have attended proper training then your guru should have taught you how to trade and which broker to open account with.


kentquah90
post Jul 13 2013, 11:33 AM

New Member
*
Junior Member
8 posts

Joined: Aug 2012
QUOTE(Kienergy @ Jul 12 2013, 10:32 PM)
Have you attended any proper educational course for trading options or you learn it on some books and website?

If you are self learned then I don't suggest you start trading because it will be a very expensive tuition fee later. If you have attended proper training then your guru should have taught you how to trade and which broker to open account with.
*
Thanks for your response, any proper training suggestions? or any demo account that I can play with?

Thanks a lot smile.gif
Kienergy
post Jul 13 2013, 01:24 PM

Getting Started
**
Junior Member
56 posts

Joined: Mar 2013
From: Kota Kemuning


QUOTE(kentquah90 @ Jul 13 2013, 11:33 AM)
Thanks for your response, any proper training suggestions? or any demo account that I can play with?

Thanks a lot  smile.gif
*
If you are really keen to learn then search for some gurus. You can find their ads on Star paper frequently. But they are quite expensive the last time I heard.

You can try OptionsXpress.com. I'm using them. But it really no point for you since you will not know how to use it.
djack
post Jul 18 2013, 09:05 PM

Getting Started
**
Junior Member
165 posts

Joined: Feb 2011


hi . i just joined miriam's class for next seminar.

somehow i was swayed by her words in the semminar and joined it.

but honestly i have no experience in options.



8 Pages < 1 2 3 4 5 > » Top
 

Change to:
| Lo-Fi Version
0.0231sec    0.25    5 queries    GZIP Disabled
Time is now: 29th March 2024 - 10:39 AM