US stock options trading roller coaster: from 3 times profit to almost zero
This article was first published in the Tiger Securities community to share the investment experience of Ming Lanying, a user of Tiger Securities. For more information, please visit the Tiger Brokers community.
T: I was interviewed today by Bright Blue Shadow, a big V from the Tiger Community. Closer to home, how long have you been playing US stocks? Have you played A shares before?
I have been playing in A-shares for 7 years. I know my strengths and weaknesses. Coming to the US stock market is to expand my strengths and fully expose my weaknesses.
The U.S. stock market is for the purpose of experimenting, experimenting with all trades, the biggest losses and the biggest gains.
But this time it was too much. The two weeks suffered heavy losses and returned to the pre-liberation overnight.
T: Remember that you used Baidu's call to make your losses before? Is it because it kills options sideways?
Baidu is the beginning, and then it is not calm.
Didn't it fall sharply on the 25th, it all fell, so I cut the flesh on Baidu, and I lost 50% that day, and my full warehouse was called Baidu 250. . . He was nicknamed 250 by a tiger friend in the tiger community. . .
I cut the meat off Baidu at the opening, and then I got angry and bought the Facebook put, because Xiaozha reduced so much, and then I bought the doomsday, 160 and 162.5 put. I bought it at 300% that day, but I bought it right. You see, I woke up in the middle of the night and sent a FB share with a profit of 300%+.
I sold 160 put before going to bed at about 12 o’clock, and the profit was about 280%. At that time, Baidu’s losses were all recovered, and the remaining 162.5 was not sold, but the market rebounded the next day, so I sold my FB the PUT.
I still think I’m not good enough. Before the market, our group of small partners will have a big discussion. Plus, NVDA Lao Huang will not be on the Beijing platform for a day. What kind of meeting is there? Bought NVDA's call, doomsday. You know the trend on the 26th.
I chased NVDA's doomsday call at about 4%, as well as JD.com, and Ali. In the end, it was all the same result, opening high and moving low, losing all the way.
Then at 11 o'clock, I thought something was wrong, so I decided to cut meat again, cut meat NVDA and Alibaba, so on the 26th, I lost another 50%.
It ended up all the way down from my highest profit. . . Only 30% profit now.
Screenshot from Tiger Securities Trading app
This is the end, this is gambling. So although every time I firmly say, I can't doomsday, I can't stud. . . But it's been five times, and I can't control my hands.
T: This is a big death... Look at you, full position options, doomsday options, only playing unilaterally without controlling risks, frequent transactions, all of which are actions that the elderly in the community repeatedly reminded not to do.
T ：嗯，缩表看跌啊 …… 那您选好到时候做空标的了吗？
T ： …… 好吧，那说到高价股，特斯拉(TSLA)呢？领跌领涨的动能股啊，熊市要来它多半会跌很多。
I think options are very simple. It's not that some people understand that they can't buy options, and they will hang up when they buy them. It's not that some people think that options can make you rich overnight, become rich and handsome in seconds, and marry Bai Fumei. Options are stocks with a lot of leverage added. Many people play without even understanding the basic concepts of options, and that's the result. . .
A warning to everyone: I agree with Wu Tianhua, CEO of Tiger Securities, that 99% of people are not suitable for playing options, and 99% of the remaining 1% who play options are not suitable for playing doomsday options.
I think with a clear judgment of the general trend, it is best to buy options that expire in about a month. Some people buy one or two years ago, and it is better to add leverage to the underlying stock.
(T: Where do you think the pit of options is?)
The pit of options is time loss. . . For example, my Baidu, I am optimistic. Before the market fell, he was strong, but when it traded sideways, my 5-week option closed higher than when I bought it a week later, and the option lost 10%.
There are also market orders for transactions. I once placed a market order before the most pitiful market, but the transaction price was 60% lower than the actual price, and I lost 2,000 dollars in vain. This is a bloody lesson. These newbies should pay attention , the old driver needn't look at it.
And option liquidity. Many low-priced stocks or illiquid stocks (low turnover rate), such options have very poor liquidity, and the spread may be more than 50%. If the stock goes up by 3%, the option will not move, but if the stock goes up by 3%, it will fall by 0.5%, and the option will fall by 20%. Through the pricing formula of options, it can be seen that the better the liquidity, the higher the stock price is, and it is suitable to play options, and this kind of income is often the biggest.
These are all basic, because I am not competent enough and I am still at the junior level, but I think it is helpful for newbies and ignored by veteran drivers. . .
By the way, there is a more suitable one, short options.
The best target is UVXY, this dude, sell his call 95% profit.
You can open any one of the out-of-the-price ones, and they all go all the way down. . . His put is all the way down. This guy is an option harvester. Many people make money through him.
(T: The margin of empty UVXY is very high, and the risk of being liquidated at a high point is also very high.)
In the bear market, just sell Tesla and call. Anyway, the best income from options is to short, which must have better technology, just like doing futures.
Tiger Securities Tip: Securities investment is a risky investment behavior. Investors need to make investment decisions based on comprehensive analysis of multi-party information. This article only provides investors with investment knowledge and learning materials, and does not constitute any investment advice.