Options Trading Success Stories
You can read about successful options traders by reading their stories and reviews. Moreover, you can find out more about how to trade binary options. Whether you are new to this field or have been trading for years, there are some things that you need to know. Here are some Success stories in Option Trading. Remember that Option Trading is not easy.
Please note that any options strategies are NOT for beginners.
Assuming, however, you are orange belt or above in terms of trading skills. Here is the summary:
(A) Options as Leverage Strategy: Here, you are using options merely as a leverage mechanism to enhance your normal delivery-based investing. Essentially, you are trading the underlying. Hence, the standard RSI settings would apply (Wilders 30–70 OBOS Overbought-Oversold with ADX, or Larry Connors RSI2, RSI3, or RSI4 strategies). It is advisable to see RSI charts on the underlying and the most liquid derivatives, including futures and options, to arrive at a correct conclusion.
(B) Options Greeks Strategies: Here, you are trying to extract profit from the options’ properties. Mostly these are based on some form of theta decay or the fall in time value. Since you are essentially trading THETA or some other Greek, it is most important that you see the chart of that GREEK as well. These methods are even more involved and require far greater knowledge than the simple directional techniques described above. In this case, you would also need to look at:
Chart of Theta, including RSI of Theta: This is what you would be mostly trading and becomes more important than the underlying chart itself.
Charts of Other Greeks, including their RSI Values: Since the Greeks are mostly interdependent, you need to see these charts too.
Charts of Open Interest, Put-Call Ratio, and Other Standard FnO Parameters.
Suppose you can see these charts. Then again, most would use the standard RSI strategies and settings summarised above. If you cannot see such charts, please do not dream about trading such a strategy, as you will have a very high risk of failure.
The best options traders were also known as position traders. They took massive directional bets. That is because it is tough to make $100M+ year just scalping volatility and volatility only.
You have to learn when not to waffle your deltas and use the edge you create in trading volatility to finance your larger bets on the delta.
The top 3 Option Traders to know about are
- Gary Cohn
- Greg Coffey (Equity Options)
- Guy Saidenberg (Exotics, GS, Global Head of FX)
Option Trading Success Story of Gary Cohn
Here is the story of Gary Cohn. Gary rose in the suburbs of Cleveland. During his basic schooling, he was held back a year because he couldn’t read and admitted he didn’t do well during the dual time. He had dyslexia, but the problem wasn’t well understood in the early 1970s. He was humbled and eventually expelled himself for being disobedient. After leaping over many schools, he eventually graduated and was an aluminum sliding window frame seller.
He took a day off from work and headed to Wall Street. Having interned in a brokerage company before, he was curious about trading. However, no one inside spoke to him, regarding his shabby dressing and without prior meeting. After a few hours, he saw one guy yelling, “I’m late! I’m running to LaGuardia” to the elevator. Gary bounces at the opportunity, enters the elevator with him, and asks if he could share the ride to LaGuardia airport.
The outsider was a senior businessman in purchasing and selling options. Gary had no clue what options trading was. Still, he held lying through the 45-minute journey. Before exiting the cab, the businessman asked Gary, “Do you even know the options?” Gary answered, “Of course, I know what options are. I understand everything required to work under you.” Then Gary got an interview call for the following Monday.
In a few days, Gary read McMillan’s “Options as a Strategic Investment,” which was thought to be the bible of options trading. It wasn’t comfortable since he had dyslexia, and reading was a major problem. He used to read sentences to himself ten times to ensure he understood fully what they meant. Eventually, he managed to get the job having to lie in the interview as well. But this job prospect as an options trader on Wallstreet ultimately made him today the President of Goldman Sachs.