My experience with trading options has been FAR more profitable (nice multi-X gains on small at-risk $ amounts)
So, here is a question for YOU: why do you think my typical net profit is 50% to say 90%, while you’re claimed profit is multiple X initial investment?
ANSWER: either you have inside information (making certain profit on illegal trades) OR you are playing SUCKER BETS, which is the sign of someone quite new to strategic investing with options and who is choosing poorly in terms of RISK/REWARD ratios.
Seasoned pro’s use options analysis spreadsheets to run RISK/REWARDS simulations to predict options response to a inputed (hypothetical) anticipated market move, so they can identify optimal choices to reduce risk while maintaining a reasonable reward.
You see, back in Oct ’07 at the peak of the market, I could have easily purchased puts at strike prices that would have now returned me 5X or 10X…so WHY didn’t I?
If you really don’t know the answer to that question, then may I suggest you read this book and other similar books:
Options as a Strategic Investment by Lawrence G. McMillan
As for your original question, just look at the typical daily VOLUME of the options you are buying. Don’t buy options that are too thinly traded, and don’t worry about such questions when you do buy options that have sufficient daily trading volume (to ensure an efficient market for unloading them when needed)
