MQGLOY, page-9

Hi Sa1588. Happy to discuss this, it's an interesting question but I'm just on my phone and I really need to write a book to give that question justice. A few points

The options market 25 years ago was terrible. I swore off ever trading them for about 20years, although I also didn't have much skill in those days. ASX has improved the product greatly in recent years. Ill let you research new charateristics yourself. Australia is still a provincial, poorly serviced market though so if you can trade options successfully here you can do so anywhere.

There is enough liquidity these days that with up to 3mth positions in the biggest stocks you can get in and out near the midpoint of the spread. Longer dated or less liquid stocks you still need to cross the spread.

ASX margin estimator website is an excellent free pricing tool to guide value.

But the main point is the way I trade it doesn't matter. Market makers want you to cross the spread and make their money mainly in sideways markets. But option pricing doesn't account for trend momentum which you can exploit

I'm a quite capable technical analyst. So when I have a view on a stock i set up with firstly the premium about 66% in the money. So sideways markets don't worry me too much. It will just be a binary bet on the outcome largely and a small spread is not material.

I also moved hack to trading with options specifically to avoid using stops. I don't use them at all. It took me 200 trades and 2 to 3 years to figure out that stops have a negative edge.

So simplistically I trade on monthly and weekly chart setups never daily, buy In the Money options, don't use stops and target 1 to 5 Mth durations.

Performance this FY is 35 trades, 60% win rate, 1.5:1 profit loss ratio and making barrows full.

Hope that helps