There is a neat trick I learned from a hedge fund trader, and that is Swing Trading deep in the money call options.
Here is what this means: first off swing trading means: holding a stock or an option for a time period of one week to one month. Its not day trading but its not buy and hold either, its the holding period that every Billionaire Hedge Fund Manager uses.
How Much Money Can I Make Trading Options?
Secondly, deep in the money call options, are a great way to trade stocks because they give you super leverage up to 20 times for little or no cost, yet with less risk than trading options outright.
How, well there is a options term called Delta, its simply tells you at the current time how much the option will move in percentage terms versus the underlying stock, if the option has a Delta of.
For example an option that has a. Now a deep in the money option usually has a delta of.
Sometimes you can even find a deep in the money call option that has a. Also a real quick caveat, never buy a option whether its a call or put, unless you know that there is going to be an event i.
Is you want to find stocks that have not been volatile or have been trading flat or in a range for the last 2 or 3 months, just pull up a chart and if the stock has been dead or flat, than you know the volatility is low and the option will be cheap. Now thats what I call a Billionaires Trade.