Advertisement
If you have a new account but can't post, please email Niamh on [email protected] for help to verify your email address. Thanks :)
New AMA with a US police officer (he's back!). You can ask your questions here

Options trading

  • 10-11-2015 3:06pm
    #1
    Registered Users Posts: 1,546 ✭✭✭ bryangiggsy


    Been following the Where do i start program on tastytrade.com and am planning on spending the next few months immersing myself in information on options trading while i save some money to get started. Has anyone here any tips or advice for someone starting from Ireland that might not be covered on the platform? Cheers


«1

Comments

  • Registered Users Posts: 10,928 ✭✭✭✭ phantom_lord


    My main tip would be don't start. There's lots and lots of money to be made in options, just not for the average retail trader.


  • Moderators, Society & Culture Moderators Posts: 6,769 Mod ✭✭✭✭ nuac


    Good advice from Phantom Lord

    The value of an option can dwindle rapidly as it's time expires.

    Option trading is only for experienced professionals with time to monitor trades


  • Registered Users Posts: 10,928 ✭✭✭✭ phantom_lord


    Very easy to end up like this guy

    https://twitter.com/jwctrek/with_replies


  • Site Banned Posts: 14 ✭✭✭ beard_grower


    i do thee odd options trade , i do it with stocks which have strong fundamentals , if a stock is down big for a few days despite no major news , il buy a call , i usually sell it too soon but i make a little money

    by accident i made a nice sum on august 24th the day the markets crashed for a brief period , i have bought apple ( august 28 th ) puts about three weeks previous , on august 24th , they skyrocketed in value and i made $900 from an investment of less than $200

    not often you get lucky like that , lost money buying calls in exxon mobil as the energy market kept on falling and they expired worthless

    i would never spend more than a small sum trading options


  • Moderators, Society & Culture Moderators Posts: 6,769 Mod ✭✭✭✭ nuac


    I have made money also on both put and call options, but also lost money.

    You need to have a lot of time and energy to watch them. Not for the faint hearted.

    If you have other things to do, you are as well to buy some shares in solid companies.

    For generations may some families did just that, i.e. holding shares in banks from generation to generation. Worked well until about 2008


  • Advertisement
  • Registered Users Posts: 1 LennyDunman


    Hi BryanGiggsy, I've just started looking into this myself (Options trading - specifically free training on optionalpha.com which is a time investment that I'm happy to do if this is not a mirage in the desert!) and came across this thread - I'm wondering if you ever ended up going anywhere with it and if it's viable or run-a-mile territory or if any thoughts?
    And whether the platforms allow it to work ok from Ireland as if you were anywhere in the world?
    And the time commitment required if you have found success with it?


  • Moderators, Business & Finance Moderators Posts: 7,810 Mod ✭✭✭✭ Jim2007


    Hi BryanGiggsy, I've just started looking into this myself (Options trading - specifically free training on optionalpha.com which is a time investment that I'm happy to do if this is not a mirage in the desert!) and came across this thread - I'm wondering if you ever ended up going anywhere with it and if it's viable or run-a-mile territory or if any thoughts?
    And whether the platforms allow it to work ok from Ireland as if you were anywhere in the world?
    And the time commitment required if you have found success with it?

    That user was banned and has not been on the boards since 2015.

    - The most important advantage an investor has is time... time for a bad decision to work itself out... when you deal options, you give up that advantage.

    - If trading options is such good deal, why are these guys trying to sell you courses rather than trading themselves? Could it be that the best way to make money out of options, is to sell courses, reports, tools etc...

    - Have you ever heard of an issuer to loose money on the options?

    Yes you can make some money out of trading options, but to do so consistently over time you are going to have to be better than everyone else in the market and do it under time constraints.


  • Registered Users Posts: 194 ✭✭ outonawing


    I think BryanGiggsy is still active on Boards, beard_grower though is banned.

    I know very little about options.


  • Registered Users Posts: 369 ✭✭ codrulz


    Not sure there are many brokers offering options in Ireland, most of the focus is on CFDs/spread bets.
    Options are much more prevalent in the US (a la Wallstreetbets) as CFDs were banned several years ago. Theta decay alone will take most of your profitability and as a few institutional traders have said many times to me; why bother paying the premium when you can just buy spot? You then don't have to deal with the greeks or a breakeven price.


  • Registered Users Posts: 197 ✭✭ shakedown


    r/Wallstreetbets has given options trading a (self-proclaimed) notorious reputation, but there are also safe strategies that can be run. It does take a large time commitment though to learn how not to lose your pants.

    https://www.optionsplaybook.com/ is a good beginners resource.

    Tastyworks and Interactive Brokers can be used from Ireland.


  • Advertisement
  • Registered Users Posts: 212 ✭✭ Mach 3


    Options expiring june 19. US Equities deep in the money for most and the train keeps chugging along.

    No sign of profit taking yet, ambitious buying if anything.

    OP, watch the action in the lead up to expiry and afterwards in the underlying market.


  • Registered Users Posts: 163 ✭✭ GalwayMagpie


    How are options taxed, in-particular how are the premiums taxed?

    I've looked on the revenue, but I cannot find anything in relation to taxation on options. If you are chasing theta, really it is the premium you end with and not the proceeds of share sales. Is that still taxed at CTG rates?


    P.S. r/Wallstreetbets has been very educational/entertaining. Mostly in how not to do things, however that community has the odd person that does know what they are doing.


  • Registered Users Posts: 2 tax_moron


    How are options taxed, in-particular how are the premiums taxed?

    I've looked on the revenue, but I cannot find anything in relation to taxation on options. If you are chasing theta, really it is the premium you end with and not the proceeds of share sales. Is that still taxed at CTG rates?

    I asked this very question on askaboutmoney (I cannot post links so search for: "askaboutmoney What is the tax on selling of Cash Secured Puts (and with assignment Covered Calls)")

    I'm presuming it will all fall under income tax but it's not entirely clear. If I'm bullish on a stock for example, starting off, I'd agree that premiums would fall under income tax (e.g. if I plan on selling weeklies), but if I am continuously selling CSPs and CCs on a specific stock as I believe it to go up in value, this in my mind is an investment, not a trade (in terms of the difference in strike prices that is, not the premiums). For example:

    So if I sell cash secured puts, the premium is income tax, which I can agree with.

    If the puts get assigned, and I begin to sell covered calls at a higher strike than what they were bought at (because I'm bullish on the stock as a whole); and they are also assigned, I feel as though the gain from the difference in strike prices should be CGT, while the premium from selling the covered calls will be under income tax.

    I'm not sure though if this is the case, this is just my interpretation of it.

    Also I have an unrelated question regarding tastyworks. I have a tastyworks account set up with <€1k to test the product, but has anyone here dealt with using tastyworks funded via currencyfair for large (to me) sums of money like €60k+?

    Thanks in advance!


  • Registered Users Posts: 163 ✭✭ GalwayMagpie


    tax_moron wrote: »
    I asked this very question on askaboutmoney (I cannot post links so search for: "askaboutmoney What is the tax on selling of Cash Secured Puts (and with assignment Covered Calls)")

    I'm presuming it will all fall under income tax but it's not entirely clear. If I'm bullish on a stock for example, starting off, I'd agree that premiums would fall under income tax (e.g. if I plan on selling weeklies), but if I am continuously selling CSPs and CCs on a specific stock as I believe it to go up in value, this in my mind is an investment, not a trade (in terms of the difference in strike prices that is, not the premiums). For example:

    So if I sell cash secured puts, the premium is income tax, which I can agree with.

    If the puts get assigned, and I begin to sell covered calls at a higher strike than what they were bought at (because I'm bullish on the stock as a whole); and they are also assigned, I feel as though the gain from the difference in strike prices should be CGT, while the premium from selling the covered calls will be under income tax.

    I'm not sure though if this is the case, this is just my interpretation of it.

    Also I have an unrelated question regarding tastyworks. I have a tastyworks account set up with <€1k to test the product, but has anyone here dealt with using tastyworks funded via currencyfair for large (to me) sums of money like €60k+?

    Thanks in advance!

    I had read somewhere that depending on the circumstances in which you were trading, premium from options could be classed as income tax or cgt, I cannot remember the exact terms that were used but it was something on the lines of frequency and method.

    I asked Revenue how this was taxed, I specifically told them I was buying and selling options contracts, not taking assignment of the underlying and this was not my primary source of income. They responded with :
    In the event that you make a gain from option contracts cgt will be due on the chargable gain. Please refer to our website for Capital gains tax on the sale, gift or exchange of an asset.

    So I'm putting it under CGT.


  • Registered Users Posts: 10 ✭✭✭ Bawa


    How are options taxed, in-particular how are the premiums taxed?

    I've looked on the revenue, but I cannot find anything in relation to taxation on options. If you are chasing theta, really it is the premium you end with and not the proceeds of share sales. Is that still taxed at CTG rates?


    P.S. r/Wallstreetbets has been very educational/entertaining. Mostly in how not to do things, however that community has the odd person that does know what they are doing.




    usually ordinary income rates unless assigned and then taxed based on your holding period.


  • Registered Users Posts: 163 ✭✭ GalwayMagpie


    Bawa wrote: »
    usually ordinary income rates unless assigned and then taxed based on your holding period.

    Check out the end of this thread on how something is classed as a trade or investment.

    https://touch.boards.ie/thread/2057726807


  • Registered Users Posts: 2 tax_moron


    Check out the end of this thread on how something is classed as a trade or investment.

    Thank you! OK so premiums are also GCT if that is the case, for me at least.


  • Registered Users Posts: 11 ✭✭✭ Ogmaestro


    tax_moron wrote: »
    I asked this very question on askaboutmoney (I cannot post links so search for: "askaboutmoney What is the tax on selling of Cash Secured Puts (and with assignment Covered Calls)")

    I'm presuming it will all fall under income tax but it's not entirely clear. If I'm bullish on a stock for example, starting off, I'd agree that premiums would fall under income tax (e.g. if I plan on selling weeklies), but if I am continuously selling CSPs and CCs on a specific stock as I believe it to go up in value, this in my mind is an investment, not a trade (in terms of the difference in strike prices that is, not the premiums). For example:

    So if I sell cash secured puts, the premium is income tax, which I can agree with.

    If the puts get assigned, and I begin to sell covered calls at a higher strike than what they were bought at (because I'm bullish on the stock as a whole); and they are also assigned, I feel as though the gain from the difference in strike prices should be CGT, while the premium from selling the covered calls will be under income tax.

    I'm not sure though if this is the case, this is just my interpretation of it.

    Also I have an unrelated question regarding tastyworks. I have a tastyworks account set up with <€1k to test the product, but has anyone here dealt with using tastyworks funded via currencyfair for large (to me) sums of money like €60k+?

    Thanks in advance!

    How has your experience been with tastyworks?


  • Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    bought an out of the money January 22nd ( today ) $255 Facebook call a little over a week ago @ $320 when the stock was around $245

    currently worth $2100

    not often you get a gain like that


  • Registered Users Posts: 163 ✭✭ GalwayMagpie


    Mad_maxx wrote: »
    bought an out of the money January 22nd ( today ) $255 Facebook call a little over a week ago @ $320 when the stock was around $245

    currently worth $2100

    not often you get a gain like that

    Nice.

    Sell it back or take assignment?


  • Advertisement
  • Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    Nice.

    Sell it back or take assignment?

    closed at 7 pm yesterday , would have been worth about $200 more had i closed at the open yesterday but was worth less at close of trading yesterday so a nice $ 1700 gain from an initial $320 spend


  • Registered Users Posts: 949 ✭✭✭ Prezatch


    Mad_maxx wrote: »
    closed at 7 pm yesterday , would have been worth about $200 more had i closed at the open yesterday but was worth less at close of trading yesterday so a nice $ 1700 gain from an initial $320 spend

    Broker?


  • Registered Users Posts: 1,225 ✭✭✭ Kilboor


    Mad_maxx wrote: »
    bought an out of the money January 22nd ( today ) $255 Facebook call a little over a week ago @ $320 when the stock was around $245

    currently worth $2100

    not often you get a gain like that


    I'm tempted to start a little options trading. I was looking at some call options for Baozun last night on Yahoo finance. Premium was .10 for 45 dollar calls for February 19th. I sent a mate of mine a message saying that's worth a cheeky punt if we could only easily trade options in Ireland.



    Anyway today that option is up 5000% :rolleyes: First time I've ever looked at them :D Even the 40 dollar call options are up 1600%.

    Share price was 35 yesterday, 48 today.


  • Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    Prezatch wrote: »
    Broker?

    i use Saxo uk


  • Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    had someone invested as little as $50 a week ago ( when stock was at $35 ) in a single $ 45 GME call which expires this coming Friday

    they would today be sitting on $10000 today


    thats a once in a century trade


  • Registered Users Posts: 197 ✭✭ shakedown


    Mad_maxx wrote: »
    had someone invested as little as $50 a week ago ( when stock was at $35 ) in a single $ 45 GME call which expires this coming Friday

    they would today be sitting on $10000 today


    thats a once in a century trade

    (Not that im against it), but that's not investing. Trading at best, gambling more likely. It's easy to cherry pick winner/loser examples in hindsight.


  • Registered Users Posts: 10 ✭✭✭ Bawa


    Read the book Options as a Strategic Investment by McMillan. If you don't know what you are doing, you will lose all your money.


  • Registered Users Posts: 72 ✭✭ gvgdhar


    Hi,
    Which trading platforms do you use for options trading? I am looking to do simple Sell call and puts. Can someone suggest where can I do this?

    I am using Degiro for my regular stock investments. I couldn't find Sell Call/put options for US equities. Can someone guide please?
    Thank you
    Girihdar


  • Registered Users Posts: 369 ✭✭ codrulz


    gvgdhar wrote: »
    Hi,
    Which trading platforms do you use for options trading? I am looking to do simple Sell call and puts. Can someone suggest where can I do this?

    I am using Degiro for my regular stock investments. I couldn't find Sell Call/put options for US equities. Can someone guide please?
    Thank you
    Girihdar

    IBKR does options


  • Advertisement
  • Registered Users Posts: 12,289 ✭✭✭✭ Mad_maxx


    shakedown wrote: »
    (Not that im against it), but that's not investing. Trading at best, gambling more likely. It's easy to cherry pick winner/loser examples in hindsight.

    who said it was " investing " ?

    options trading isnt investing in anyway shape or form , its at best a hedge if you buy far out Puts

    Gamestop is very much in the news right now so the " hindsight " point is kind of pointless , everything about Gamestop is gambling , those in it ( on this site ) are well aware of that


Advertisement