Put Options

25th Apr '19 by kfmb67

5 comments 1245 reads

I am interested in learning more about Put Options, does anyone know a good resource to learn more and can recommend a trading platform for these?

Thanks

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Kfmb67

Premium Member

5 comments

dmjram

25th Apr '19

What are you wanting to do with options?
eg hedge existing holdings? hedge the market? trade in their own right?

They are not as popular as they were, with platforms such as IG providing much the same functionality with CFD's and spread bets without the complications/restrictions that exist with traded options such as the decaying time premium.

As with all leveraged products (options, CFD's and spread bets), be very sure you know what you're getting into.

Lloyd Garvey

26th Apr '19

Do be careful....

I will just quote the login screen for IG

"Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money."

dmjram

26th Apr '19

Very true, hence the need to be clear about what you want from leveraged products.

As the question was on put options, it may suggest for hedging rather than for trading in its own right which are two totally different propositions risk wise. Use of puts/CFD's/spreads can give effective hedges but you still really need to understand what you want to achieve and the costs of doing so.

jonesj

26th Apr '19

I think KFMB67 was asking:
"does anyone know a good resource to learn more and can recommend a trading platform for these?"

Therefore he/she is interested in learning and it is not helpful to make posts merely warning people off options.

1 Regarding learning, the theory is easily accessible. Google will soon bring up option pricing formulae & accompanying explanations. Also, numerous books can be found on Amazon. Foyles has a few, if you visit London occasionally and prefer to browse before buying.

2 What is not so easy is finding independent advice on how to purchase options & where best to do so. Hopefully some other contributors can offer some advice on this ?

Note: I also recognize there are large risks with leveraged products & don't need a lecture on this. There were just over 30 years between my first long position to my first very modest short position.

dmjram

26th Apr '19

Until KFMB67 states what it is he/she wishes to use put options for, it isn't really possible to give advice on what/where to learn.

Are put options of interest for hedging current positions? Or to hedge an overall index which he/she hopes will be representative or his/her holdings? Or is it for trading the underlying instrument on the short side?

Totally different learning suggestions flow from knowing this. A hedger really doesn't care much about straddle/butterfly strategies. A trader isn't interested in pointers on deciding what % of his/her portfolio to hedge.

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Kfmb67

5 comments

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