Stocks & Commodities V. 31:5 (61): Explore Your Options by Tom Gentile
Product Description
Explore Your Options by Tom Gentile
PUT OR CALL: WHICH HAS THE MOST LIQUIDITY OF ALL?
Recently, a question came out of left field: What are the best options to buy or sell for a daytrader? In the world of option trading, there are the few who wish to daytrade options. Trading options is a skill, but daytrading them requires a different skill set. My first inclination was to answer “Don’t do it,” but in this industry, “don’t” and “can’t” are not in the trading vocabulary.
There are roughly 4,000 indexes, exchange traded funds (ETFs), and stocks that are optionable. Not all options are created equal. To answer the question, the first thing I did was head over to the CBOE (www.cboe.com) to look for an answer. There are options on familiar products such as index options and equity options, but that’s only the beginning. There are options on exchange traded products, and credit swaps, binary products, and even options on volatility. Chances are that if you’re an option trader and you don’t know what it is, you shouldn’t be trading it, let alone daytrading it.
Then there are index and equity options. I didn’t have to look far for index options. The information at the CBOE showed me that of the top 10 index options traded in 2007, the Standard & Poor’s 500 (SPX) traded more volume than the others combined. When I looked at the Standard & Poor’s SPDR ETF, it trades very high volume as well.
PUT OR CALL: WHICH HAS THE MOST LIQUIDITY OF ALL?
Recently, a question came out of left field: What are the best options to buy or sell for a daytrader? In the world of option trading, there are the few who wish to daytrade options. Trading options is a skill, but daytrading them requires a different skill set. My first inclination was to answer “Don’t do it,” but in this industry, “don’t” and “can’t” are not in the trading vocabulary.
There are roughly 4,000 indexes, exchange traded funds (ETFs), and stocks that are optionable. Not all options are created equal. To answer the question, the first thing I did was head over to the CBOE (www.cboe.com) to look for an answer. There are options on familiar products such as index options and equity options, but that’s only the beginning. There are options on exchange traded products, and credit swaps, binary products, and even options on volatility. Chances are that if you’re an option trader and you don’t know what it is, you shouldn’t be trading it, let alone daytrading it.
Then there are index and equity options. I didn’t have to look far for index options. The information at the CBOE showed me that of the top 10 index options traded in 2007, the Standard & Poor’s 500 (SPX) traded more volume than the others combined. When I looked at the Standard & Poor’s SPDR ETF, it trades very high volume as well.
FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.
| Take Control of Your Trading. |
| Professional Traders' Starter Kit |
| All these items shown below only $299.99! |
| Click Here to Order |