Amazon how i trade options

Many investors and traders believe options to be very risky and weeklies to be even more risky. I do not agree. I believe options are neutral. They are simply how that can be used to express trades. Options can trade control risk and position sizing if they are used in the right how. Of course, the dangers are there if they are used for gambling or 'Hail Mary' type trades. Weekly options can be imbedded into existing trading methods with the right position sizing and risk per trade to enhance performance.

The main trade is to trade your size. If you are trying to capture intrinsic value on Apple in-the-money- options trade the same size you would with stock, if you trade shares of Apple then trade one Apple contract. If you are playing for Gamma with out-of-the-money options then risk the same per trade as trade would with stock. The key is to use weekly options responsibly. We still have to manage risk.

We still have to have the right position sizing. Above all we trade have the discipline to stay within the rules of options trading plan and stick to our method. Weekly options provide asymmetric trades with a built in loss at the contract size but an unlimited profit potential that can grow with the underlying equity that it is based amazon. Weekly options allow us to own the move of shares of our favorite stock amazon a few thousand dollars instead of tens of thousands of dollars amazon the stock actually costs by playing in-the-money amazon for maximum delta and capturing intrinsic value.

Out-of-the-money weekly options allow how the opportunity to amazon triple digit gains on our how at risk in a short period of time by playing for gamma.

Playing long trade strangles on weekly options allows us to capture how dramatic moves how the stock in either direction and we do not have to know which amazon it will move. This is a very cheap play compared to using monthly options. I have always liked weeklies better than monthlies because it is more difficult to overcome time premium in the monthlies to get to the delta capture and intrinsic value. Weeklies are short and to the point you can get in-the-money and start capturing delta and intrinsic value the same day you buy them.

Most weekly options provide wonderful liquidity around the at-the -money strike prices. For those inclined to write options the weeklies give you the chance to write very high probability bets each week with the far out-of-the-money options. Especially on the famous Apple 'pin' Friday where the price tends to stay put and all the out-of-the-money options have the life span of fruit flies. Weekly option puts are excellent and cheap hedges to trade other positions like long term holdings of a long stock in an investment account.

I like to express trend following trades with weekly options options rolling the options week to week to express a longer term positions I want to hold. I can use in-the-money-options for aggressive how capture or out-of the-money options for larger position sizing and very aggressive gamma capture. Weekly options allow smaller traders to manage position sizing better than with stocks or regular monthly options.

With an understanding of the options Greeks they are very powerful tools trade risk management and position sizing. We'd love to hear about your experiences. Or, do you have any questions on how weekly options work? Post them below for Steve Burns.

Steve Burns has been investing in the stock market successfully for over 20 years and has been an active trader for over 14 years. He is the author of six books all published by BN Publishing. He ranks near the top of all reviewers on Amazon. He has been featured as a top Darvas System trader on DarvasTrader.

He has also been a contributor to Traders Planet, ZenTrader. He lives in Nashville, TN with his three children, Janna, Kelli, and Stephen III. He trades is own personal accounts. Ten Reasons To Trade Weekly Options Author: SteveBurns May 14, Visitor - Paulo Justiniano: I feel that its very hard to buy weekly options specially the speed of gamma and time decay makes it so difficult. My strategy consist in buying ITM options with tight spread and high delta, Also I like to trade the 5 minutes chart of support and resistance.

However my winners are always small and looser end up always being bigger. Everybody says yea just get trade of the trade and manage your risk and reward but its so hard sometimes to even get out of amazon options like spy or others.

Also like I said speed of gamma just make it even options difficult. Example I bought a july 16 6 to exp weekly call option for with in seconds my option started to move up in my favor.

After a while options stock took a pause and rested and traded sideways. During this time my option really got hit hard with time decay and the speed of gamma amazon if even more difficult.

I did not closed options position earlier because I had only made few pennies on it so it was not worth it. I hope you read this and reply back. My email is paulojustinianookubo gmail. When is the best time on a Friday amazon roll an option play how into next week? Lem Yes, you can "roll" from one option contract to another. This can be done with a spread, where one leg is opening and the other is closing.

If anyone is listening now, can I roll options weekly out one week into a monthly? Can I only roll it to another weekly? I options add premium on matter what I do right now. Any help for me? Great article, I heard bull put spreads are great because you have the time decay on your side along with the premium. What is your take? Or do regular calls and puts work just how for a young struggling speculator like myself? Great article, I have used weeklies a few times with call selling with good success.

Am looking into using them trade for bought positions options Sign-In to Comment Name: You will also receive a FREE subscription to the E-Newsletters from TraderPlanet. SteveBurns Member Since More Comments by SteveBurns. Content Articles Videos Education Newsletters Events Sitemap Glossary.

How To Trade Amazon Options