Option Trader Vs Trader Using Option

Hi everybody … I have been missing for a Month … Wao !!! Recently i’m having a break and also quite busy with my work. Well busy till cant blog … haha it is just my excuses … Actually i have a lot of article i want to share with you guys, just that i’m quite lazy =P.

This topic has been bothering me for quite some time as many people still mix them together due to the popularity of options.

Is there a Different between Pure Option Trader and Trader just using option?

Many people does not see the different. The Truth is they are totally different as they traded differently.

Option Trader

Option Trader are people who know how to use options expertly. They know all the stuff about options like implied volatility, option greeks, bell curve and the construction of options. They seldom construct a single long call or put. The way they trade usually involve the calculation of Greeks and thus they constructs spreads or multiple combination of spreads. Spreads are like vertical, horizontal and diagonal spreads.

Usually they will need to wait for the construction of option to expire to make money.

Trader using options

These are the people who actually can use stock to trade. They are day trader, swing trader, momentum trader or long term trader. These are the people who buy option in only 1 direction. These also mean that they will no hedge their position. The main purpose for them to use option is for leverage.

You see, a lot of the people only know about stock. Thus they think that options trading is just using option to trade like how they trade for the stock. This is wrong as option trading actually is a hedging game or a calculative game which involve the construction of multiple calls and puts. Therefore many people are losing money thinking that options is a cheap way to substitute stock.

Come On … No free lunch in the world … Thus how can an option being a leverage tools without having its disadvantageous.

What you think might not be what you think …
Learn from the Professional …
Ask them what kind of traders are they?
Learn the art of the game correctly before you jump into the ocean.

All the best in your trading … Do not be fool by the so call Gurus …