Hoping that this might be of some help to the stragglers out there. But before that, I agree with your insightful comments as well as with the good advice provided by the regulars on this excellent forum.
According to what I've read, over 75% of Call Options expire un-exercised meaning that the purchasers loose their money i.e. the Premium.
Trading Options like in Day Trading is difficult, you need a good account, which I don't have and you need a good strategy for that, which again I don't have.
However, after having lost a fair amount over the years, I am quite successful now with my Call Options trading and I'd like to share my simple approach:
- firstly I look at the charts and if I believe the share is in Accumulation mode e.g. FLT over the last few months, I will buy a Call Option. The TA that I use is based on what I learned from Jako64.
- the way I pitch them is to look at the Corporate Calendar, to ascertain when the next Reports are due but, in any case, I usually look at an Expiry date of 6 months away, preferably more.
- then if I find a strong area of Resistance that I believe the price will reach within the Expiry time frame, I will look for a Strike Price that gives me a Potentially good R:R i.e. the Potential Reward is at least =>5 time the Premium being asked;
- in the example above of FLT, I purchased FLTW19 in January for 43 cents at the Strike Price of $35- but I based my assumptions on the price getting to the next strong Resistance level of $37.50, thus giving me and almost 1:5 R:R. Fingers crossed.
-for small account holders like myself, if you are diligent and learn from the great posters in here, you can do quite well but don't rush. As you suggested, paper trade until you're comfortable with your approach.
Naturally whether you venture into Options or some other form of trading, it does pay to learn from those who are successful and know their craft.
Thanks everyone and allow me a special thanks to Master Jako64.
(20min delay)