I recently started investing in options and have modest returns of about 10%, give or take. I’d describe my method for identifying prospects for investment as amateurish and I generally look for bad/good news on particular securities coupled with additional information from news clippings, Form 4 filings and WSB, etc.
I think this may be laughable. I am looking for a list of considerations to be more methodical with my investments. I realize there are known knowns, known unknowns and also unknown unknowns; things we don’t know that we don’t know. (Say, ‘What?’ again!) I mean we can ask all the questions and check all the boxes and still invest and lose money, right?
However, I feel better about losing money having asked all the right questions than otherwise. I feel better about looking for trends in my mistakes knowing that I considered all (or most of) the variables. I don’t expect any list to be all-encompassing. There will be outliers and anomalies. Otherwise, people would be able to invest and double their money (or more) consistently, right? So, what are some of the questions you ask yourself when about to invest in options? Should there be a separate list for ‘calls’ and ‘puts’?
I’ll start:
* How much am I willing to lose?
* How much am I willing to win? Losing money while waiting for wins to go higher is worse than getting out with your expected wins before it tops out.
* Is the security under/over valued for the industry?
* Is the industry synchronous or inverse to other industries/markets?
^(I hope to update this list as I receive your suggestions. thanks.)
View Reddit by wisle-n-out – View Source
LEARN ABOUT: Investing During Inflation
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
What industry is the ticket involved with and are they good at risk management.
I’m in the same boat as you. However, it seems you do FAR more research on a play than I, and I would refer you to r/options or r/RealDayTrading. I don’t read public balance sheets or anything like that, you could say I’m trying to get lucky on swing trades lol
Personally, I’ve learned to stick with etf’s (SPY, QQQ and their leveraged homies) in order to reduce the risk of black swan and increase liquidity (better bid/ask spread for less entry loss).
In an attempt to answer your question, this is the list I would ask myself before entering a highly speculative, highly *specific* options trade (in addition to what you have listed!):
* what am I betting on?
* have I (you ) gone over all public information available?
* what public events are coming up? (of course fed meetings, cpi, ppi)
* how much time do I need?
* how much time can I *afford*? (I’ve been adding 30 days for short term, helps avoid theta)
Most important, I think, is entry and exit planning, then time allowance. Identify a trend, setup your purchases and limits in advance, and forget about it (avoids FOMO). If the market trends that way, then you’re 50% there, just need the trend to continue in your favor! If it doesn’t hit, cancel everything and re-evaluate.
Once again I’m new to this, like you. Let me tell you a story…
I saw some fire ass DD on TSCO here, so my ass bought puts…. Days go by… I’m in the money hard… BREAKING NEWS!!! TSCO BUYS SOME BULLSHIT!!!! Stock moons…. DOUBLE DOWN MF’ER!!!!… days go by…… my ass redddd afffffff…… down $30 now…… IF I CAN EXIT THIS BITCH +10% IM HAPPY!!!! (but i’ll settle for a small loss too lol)……..
​
That being said, I think SPY gonna bounce to 385. Got 1500 in puts lined up on the ride (hopefully) up, fuckin cash out on the way down cuz JPOW (I’ll suck that man’s dick if I can pull a 10 bagger)
GL hombre, don’t drown
PS I’m high so ya know
For Real, here’s one I wrote yesterday and it was an expensive lesson -> free for you:
Don’t press buttons like a moron, switching sides, just increasing wrong 0DTE bets randomly with no plan because you’re in no shape to trade even though you did well all week and think the shit just got easy for you. Don’t think you are so smart that you would never do this because you already did it once and it sucked really really bad.