DeMark on Day Trading Options is the first book to combine two of today’s hottest trading phenomena – day trading and options trading – into one exciting blueprint for making money in volatile markets. He provides insights on selecting the best options to trade for specific markets, details how traders can accurately predict market movements, and introduces the ingenious option trading variable he developed.
Although some option-writing techniques may be profitable, the degree of success traders enjoy is limited to the value of the option at the time the trade is initiated which is a function of market volatility, the underlying security price, and the time remaining before an option’s expiration, among other considerations as well. In actuality, trading defensively and adhering to option models and complicated option-writing strategies contradicts the goal of most option traders, which is to leverage their investments and make a significant amount of money within a short period of time. They perceive, we believe incorrectly, that this selling methodology is a safer and a more profitable means of trading than the outright purchase of options. Similarly, we could present theoretical price valuation models that describe option price behavior given various levels of price activity of the underlying security along a specified time spectrum. After all, models are helpful since they are designed to provide a trader with an option-pricing road map. On the other hand, how often has real-time trading conformed to a market model? Not often and especially not in those instances in which traders have relied heavily upon a specific game plan to trade their own accounts aggressively.
We’re certain there are a number of excellent books that discuss how to write or sell options and lock in respectable returns. Unfortunately, the option-investing public is often precluded from participating in these trading strategies because the implementation of these techniques requires either a large capital commitment or the possession of the underlying security. As a result, an undercapitalized trading novice is forced to either buy options outright or forego participation in this potentially rewarding trading opportunity. Fortunately, we believe that what may be perceived by some as an inferior and riskier approach to option trading is in reality a preferable form of trading, provided proper guidelines are followed. In other words, we feel that buying options outright without the requirement of, or concern for, complex formula-ridden and capital-intensive methods of writing or selling options can be more rewarding, both financially and emotionally. If you are like we are, you prefer limited risk and unlimited gains and that is precisely the focus of our book.
Despite the multitude of formidable barriers to successful trading, there exist numerous strategies which enable traders to buy and to sell options, even intraday, profitably. These methods are a reasonable and a practical alternative to the sophisticated, hypothetical trading techniques which require large account balances and complex computer-driven market models. We believe all that is required is a basic understanding of the operation of the options markets and a measure of trading discipline and money management skills. This book concentrates upon the presentation of simple, easily understood methods to identify option-trading opportunity zones. Our methodology deemphasizes the commonly accepted practice of selling an option in anticipation of the premium value’s decline to zero as time lapses into option expiration. Rather we attempt to provide a disciplined option trader with an open-ended profit potential, since our basic approach merely requires buying and
then liquidating an option position at the appropriate time.
Although this book may occasionally describe or refer to various option-writing strategies or trading models, they are incidental to the thrust of our discussion which is to present a number of approaches to successfully buy and day trade options. Certainly, there is nothing to prevent a trader from employing the daytrading techniques presented in this book and then electing to extend the holding period longer than the conclusion of the entry day’s trading. The important consideration is to adhere to the application of a mechanical and disciplined approach to both the selection of option-trading candidates and the timing of their purchase.
- Option Basics
- Option Mechanics and Trading
- Tools and Techniques
- Option Indicators TD % F and TD Dollar-Weighted Options
- Anticipating the Trend: TD Sequential, TD Combo, and TD Setup Trend
- Disqualified Breakouts: TD Lines and TD Retracements
- Perfecting an Oscillator: TD REI and TD POQ
- Moving Forward in Reverse: TD Fib Range, TD Exit One, TD REBO Reverse, TD Camouflage, and TD Range Projection
- Pulling ItAII Together
DeMark On Day Trading Options: Using Options to Cash In on the Day Trading Phenomenon By Thomas R. DeMark pdf