Option trading questions

Wilko121

Hi guys and girls, I have many question so a huge thanks in advance to anyone who has the time to read or can help.

Quick story is, Ive spent a few months on Technical Analysis of stocks, particularly with a view at options.

1. I read somewhere that there is many programs that completely trade by themselves, just servers running with parameters buying and selling that barely make profit.
If true what advantage do we have in studying graphs and patterns?

2. I understand that costs of entering a trade will vary from broker to broker.
e.g. $50 min fee for a contract or .03% of value, whichever is higher.
Is the broker fee the only cost or is there a fee to market also?

3. Is there a fee for both entering a trade and exiting?

4. If for example there is a strong long term sideways trend in the market. $100 is placed on an option contract with an expiry of 6months. After one week the trend has broken the opposite way beyond support/resistance, would it not be logical to risk investment and stay in assuming the long term trend will continue as before?

Again thanks for any feedback here, as you can prob tell im still a little confused about some of the basic points.

RobertKK

No one answered your questions.

I am in the process of learning about options.

For question 1, I don't know. Personally I would rather be the computer controlling it...

2. The fees are much cheaper than $50.
http://www.stockbrokers.com/reviews/beststockbrokers

You pay the basic broker fee and a broker fee price per contract, lets say $7 plus 75 cents per contract, and you buy 10 contracts costing $2 for example, each contract is 100 shares so total cost would be $2014.50.

3. Yes. Same as buying and selling shares.

4. Yes, you can only lose the $100 so getting out would be a bad choice at that point.

I'm still learning, myself.