{"id":4357,"date":"2020-04-07T13:31:02","date_gmt":"2020-04-07T13:31:02","guid":{"rendered":"https:\/\/trade-malaysia-option.com\/pilihan\/"},"modified":"2023-02-12T10:25:04","modified_gmt":"2023-02-12T10:25:04","slug":"pilihan","status":"publish","type":"post","link":"https:\/\/trade-malaysia-option.com\/en\/pilihan\/","title":{"rendered":"Options"},"content":{"rendered":"<p><main id=\"main\" class=\"clearfix \"><\/p>\n<div class=\"fusion-row\">\n<section id=\"content\">\n<article id=\"post-2210\" class=\"post post-2210 type-post status-publish format-standard has-post-thumbnail hentry category-panduan\">\n<div class=\"post-content\">\n<p><span>On the past day trading options is not part of most traditional intraday strategies.\u00a0However, times are changing and today&#8217;s traders make a lot of money using options.\u00a0This page will highlight the benefits and drawbacks of options trading, as well as covering options types, how to get setup, and top tips.<\/span><\/p>\n<section>\n<div>\n<div>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><span>What&#8217;s the Choice?<\/span><\/h2>\n<p><span>Simple definition \u2013 options are simple financial derivatives.\u00a0This contract gives you the right to buy or sell an asset at or within a predetermined date (exercise date).\u00a0If you are a seller you have an obligation to fulfill the terms of the transaction.\u00a0This will either be to sell or buy if the buyer chooses to &#8216;execute&#8217; the option before the expiry date.<\/span><\/p>\n<p><span>Options for day trading cover a wide range of markets.\u00a0You can get stock options, ETF options, futures options and more.\u00a0This traditional option is also known as the &#8216;vanilla option&#8217;.<\/span><\/p>\n<p><img decoding=\"async\" src=\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/make-a-choice-vector-id516823322.jpg\" alt=\"\" width=\"1024\" height=\"512\" \/><\/p>\n<p><strong><span>What is an Option Contract?<\/span><\/strong><\/p>\n<p><span>You will be given several rights with an option contract.\u00a0Each contract must include the following details:<\/span><\/p>\n<ul>\n<li><span>Type of option (call option or option)<\/span><\/li>\n<li><span>Basic security<\/span><\/li>\n<li><span>Strike price (the price at which you can exercise the option)<\/span><\/li>\n<li><span>Trading unit (number of shares)<\/span><\/li>\n<li><span>Expiry date (last trading day to exercise your option)<\/span><\/li>\n<\/ul>\n<p><strong><span>Type<\/span><\/strong><\/p>\n<p><span>Options are often classified as a complicated, risky investment, and give rise to many ambitious day traders.\u00a0However, there are only two main class options.<\/span><\/p>\n<ul>\n<li><span>Put \u2013 This put option allows you to sell the stock at a certain price.<\/span><\/li>\n<li><span>Call \u2013 This purchase option allows you to buy a stock at a certain price.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/section>\n<section>\n<div>\n<div>\n<p><span>Leaving aside the two main classes, there is a long list of different markets and options.\u00a0While not all are suitable for day trading, the list includes:<\/span><\/p>\n<ul>\n<li><span>Stock options<\/span><\/li>\n<li><span>Index Options<\/span><\/li>\n<li><span>Mini options<\/span><\/li>\n<li><span>Mini Index Option<\/span><\/li>\n<li><span>Options in the future<\/span><\/li>\n<li><span>Weekly SPY Options<\/span><\/li>\n<li><span>OEX option<\/span><\/li>\n<li><span>ETF options<\/span><\/li>\n<li><span>S&amp;P 500 Options<\/span><\/li>\n<li><span>IRA account<\/span><\/li>\n<li><span>E-Mini option<\/span><\/li>\n<li><span>ES weekly selection<\/span><\/li>\n<li><span>QQQ options<\/span><\/li>\n<li><span>Deep in-currency (ITM) options<\/span><\/li>\n<li><span>Crude oil options<\/span><\/li>\n<\/ul>\n<p><strong><span>Underlying Assets<\/span><\/strong><\/p>\n<p><span>Typically, you&#8217;ll find that most options are based on shares in publicly listed companies, Twitter and Amazon, for example.\u00a0However, there are many options based on alternative investments.\u00a0These include day trading options on stock indexes, currencies, commodities, and real estate investment trusts (REITs).<\/span><\/p>\n<p><strong><span>Stock Options<\/span><\/strong><\/p>\n<p><span>If you are interested in day trading stock options for life, it is important to know that the contract is based on 100 shares of the underlying stock.\u00a0The exception to this rule is when adjustments occur as a result of stock splits and mergers.<\/span><\/p>\n<p><strong><span>Regional Differences<\/span><\/strong><\/p>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><a href=\"https:\/\/iqoption.com\/lp\/mobile-partner\/ru\/?aff=12245&amp;afftrack=&amp;clickid=\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/iqoption.png\" alt=\"\" width=\"300\" height=\"72\" \/><\/a><\/h2>\n<p><span>The majority of exchange-traded stock options are American.\u00a0They can be exercised at any time from the date of purchase to expiration.\u00a0European options, however, you can only redeem on the expiration date.<\/span><\/p>\n<p><strong><span>Options vs Futures<\/span><\/strong><\/p>\n<p><span>Many people quickly realize that there are many similarities between day trading options and futures.\u00a0Both are usually based on the same underlying instrument.\u00a0Actual contract speech also shares many similarities.<\/span><\/p>\n<p><span>The difference is how they are traded.\u00a0With options, you will get various options available.\u00a0You will also find different trading rules.\u00a0Options can be traded alone, or you can buy them in conjunction with stock trades or futures contracts to create a form of insurance in the trade.<\/span><\/p>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><span>Why Trade Options?<\/span><\/h2>\n<p><span>There are several reasons you can make serious money trading choices.\u00a0Even putting the financial rewards aside, day trading with options appeals for a number of interesting reasons.<\/span><\/p>\n<ul>\n<li><span>Low cost strategy \u2013 Day trading in options gives you the opportunity to enter and exit positions faster and with less risk than other securities, such as stocks and mutual funds.\u00a0It is also much cheaper to buy options than to buy the underlying asset, shares of stock, for example.\u00a0Therefore, you can control the same number of shares with much lower capital.<\/span><\/li>\n<li><span>Diversification \u2013 Because options are cheaper than buying actual stocks, you can benefit from increased investment opportunities.\u00a0Your capital will continue to grow, increasing your profit potential.<\/span><\/li>\n<li><span>Greater profits \u2013 When stocks move you can profit more with options.\u00a0Let&#8217;s say the stock moves from $25 to $50. That will bring you 100% profit in the stock.\u00a0However, a call option moving from $1 per contract to a $5 contract will bring you a profit of 500%.\u00a0Therefore, you can get more profit and less time with options.<\/span><\/li>\n<li><span>Options can succeed where other sectors fail \u2013 Even when some market sectors fail, options can succeed.\u00a0This is partly because you don&#8217;t have to exercise your options to profit from them.\u00a0Furthermore, volatility itself can be profitable.<\/span><\/li>\n<li><span>Mutually beneficial \u2013 Although options are often built on stocks, combining the two and they can bring you greater benefits.\u00a0This is because you can sell your options to generate income on the stocks you own.<\/span><\/li>\n<\/ul>\n<p><span>Day trading options trading is varied and brings huge profit potential.\u00a0The best part though \u2013 the accessibility.\u00a0You can start day trading with options from anywhere in the world.\u00a0All you need is an internet connection.<\/span><\/p>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><span>Weakness<\/span><\/h2>\n<p><span>While there are many benefits, there are some challenges that come with trading in options.\u00a0Fortunately, all of the obstacles listed below can be overcome.<\/span><\/p>\n<ul>\n<li><span>Bid-ask spread \u2013 Compared to stocks, the bid-ask spread is often wider.\u00a0This is a result of the reduced liquidity available in the options market.\u00a0This can fluctuate by as much as half a point, which can reduce day trading profits.<\/span><\/li>\n<li><span>Reduced price movement \u2013 \u200b\u200bYou may find that price movement is limited by the premium time value element of your choice.\u00a0Although the value increases with the price of the underlying instrument, the profit can be underestimated to the extent of the loss of time value.\u00a0Fortunately, the time value for option day trading is quite limited.<\/span><\/li>\n<\/ul>\n<p><span>These two disadvantages should not stop you from day trading options in search of income.\u00a0If you consider both considerations, you can adjust your trading plan accordingly.<\/span><\/p>\n<p><img decoding=\"async\" src=\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/businesswoman-looking-at-data-in-front-of-electronic-display-vector-id967681518.jpg\" alt=\"\" width=\"1024\" height=\"512\" \/><\/p>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><span>How to Start Trading Options<\/span><\/h2>\n<p><span>Day trading options for beginners requires a few simple steps.<\/span><\/p>\n<p><span>Open a Brokerage Account<\/span><\/p>\n<p><span>Your broker will help facilitate your trade.\u00a0Today there are many online brokers to choose from.\u00a0The challenge is finding someone who meets your individual needs.\u00a0You need to consider several factors when making your choice.<\/span><\/p>\n<ul>\n<li><span>Cost \u2013 Compare commissions between different brokers.\u00a0You will also find some brokerages that offer zero commission fees for trading options.\u00a0Also, check their payment structure is simple and there are no hidden costs.\u00a0You should make sure you get a competitive spread.<\/span><\/li>\n<li><span>Account type \u2013 Do you want to start day trading options in a cash account, or do you want a margin account?\u00a0With a cash account, you can only trade capital that you actually have.\u00a0However, a margin account will allow you to borrow money from your broker to leverage trades.\u00a0A margin call option will give you increased buying power.\u00a0Keep in mind cash accounts will only allow you to buy options to open positions.\u00a0You need a margin account to sell options without owning the underlying asset.<\/span><\/li>\n<li><span>Platform \u2013 This is where you will spend a large amount of time.\u00a0The best platform for trading options will offer all the charts and technical tools you need to trade effectively.\u00a0If you trade on the go, you may also want to investigate their mobile and tablet apps.<\/span><\/li>\n<\/ul>\n<p><span>For more guidance on making the right decision, see our list of brokers.<\/span><\/p>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><a href=\"https:\/\/iqoption.com\/lp\/mobile-partner\/ru\/?aff=12245&amp;afftrack=&amp;clickid=\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/iqoption.png\" alt=\"\" width=\"300\" height=\"72\" \/><\/a><\/h2>\n<p>&nbsp;<\/p>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><span>Strategy<\/span><\/h2>\n<p><span>Once you are set up with a broker and you have your own trading room ready to go, you need to use an effective strategy.\u00a0Strategies for day trading options come in all shapes and sizes, some simple and some complicated.\u00a0Before we look at examples, there are a few important components that most strategies require.<\/span><\/p>\n<p><strong><span>Charts &amp; Patterns<\/span><\/strong><\/p>\n<p><span>Unless you are trading using the news, you will probably use charts and patterns to predict future price movements.\u00a0They work on a simple hypothesis, that history repeats itself, and you will find many wealthy traders who wholeheartedly agree with that statement.<\/span><\/p>\n<p><span>Your charts will need the best indicators for trading options.\u00a0This varies from strategy to strategy, but it includes:<\/span><\/p>\n<ul>\n<li><span>Enter the Call Ratio Indicator<\/span><\/li>\n<li><span>Money Flow Index<\/span><\/li>\n<li><span>Open Interest<\/span><\/li>\n<li><span>Relative Strength Index<\/span><\/li>\n<li><span>Bollinger Bands<\/span><\/li>\n<\/ul>\n<p><span>You will find that trading patterns with options requires hard work and practice.\u00a0You need to tighten up any creases and try a few different charts until you can see one that paints a clear picture with the numbers.<\/span><\/p>\n<p><strong><span>Time<\/span><\/strong><\/p>\n<p><span>Timing is everything.\u00a0Not only when you enter and exit trades, but also when you set for the trading day ahead.\u00a0Options strategies that work usually have traders behind them bright and early.<\/span><\/p>\n<p><span>For example, you might want to be as early as 06:00 ET if you want to get a feel for the markets heading into Europe and into the US.\u00a0You can start setting your trading strategy based on what your market has done overnight.<\/span><\/p>\n<p><span>Take E-mini for example, up to 70% of stocks will move in the same direction as E-mini.\u00a0If you know this, you can also tell if most stocks will be up or down when US markets open at 9:30am ET.<\/span><\/p>\n<p><span>Keep in mind that the US often sets the direction of world markets.\u00a0Therefore, it makes sense to wait an hour for the market to settle a bit before entering your first trade.<\/span><\/p>\n<p><span>Day trading on options requires careful analysis and significant time.\u00a0Make sure you are ready to put in the hours if you want to make big profits.<\/span><\/p>\n<p><strong><span>Example<\/span><\/strong><\/p>\n<p><span>This is one of the basic options strategy that works.\u00a0If the market is rising, you will buy a call or a put.\u00a0If the market is going down, you will sell the call or buy it.\u00a0Many choose to sell options rather than buy them.\u00a0However, some equities move so well that buying an option can produce a bigger profit than selling an option and waiting for it to go downhill.\u00a0Apple is one such example.<\/span><\/p>\n<p><span>Let&#8217;s go back to the E-mini.\u00a0You will be patient in the first hour and then you will look to see where the E-mini is trading based on its opening, and whether Apple is trading in the same direction based on its opening.<\/span><\/p>\n<p><span>If so, you would buy at-the-money, or call the first exit call if heading higher, or put if heading lower.\u00a0Now you sit and wait for half an hour to see if you trade in the right direction.\u00a0If so, you will stop at half the value of the option you bought.\u00a0So if you buy it at $10.00, you would place a stop at $5.00.<\/span><\/p>\n<p><span>If the market moves then exit.\u00a0There are more opportunities out there.\u00a0However, if the trade looks promising then you will wait a few hours and reassess at 2:00pm ET.\u00a0If the market continues in your direction, you can stay with it and place your stop on the other side of the open around 8-12 cents.<\/span><\/p>\n<p><span>If it continues to look promising, you can reassess around 3:30pm ET before the market closes.\u00a0You can then make a final decision and hopefully calculate your profit.<\/span><\/p>\n<p><span>For more guidance, see our strategy page.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><a href=\"https:\/\/iqoption.com\/lp\/mobile-partner\/ru\/?aff=12245&amp;afftrack=&amp;clickid=\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/iqoption.png\" alt=\"\" width=\"300\" height=\"72\" \/><\/a><\/h2>\n<p>&nbsp;<\/p>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><span>Tips For Trading Options<\/span><\/h2>\n<p><span>Even with good options day trading techniques, you can benefit from invaluable tips.\u00a0From risk management and preferred stock options to education and regulations around taxes, below you&#8217;ll find top tips that can keep you firmly in the black.<\/span><\/p>\n<p><strong><span>Education<\/span><\/strong><\/p>\n<p><span>One of the top tips is to immerse yourself in the educational resources around you.\u00a0The best traders are constantly digesting information.\u00a0You don&#8217;t want to be left behind because of market changes.\u00a0Jeff Augen&#8217;s trading options is available for free download and is considered one of the most useful resources out there.\u00a0However, you should also consider the following:<\/span><\/p>\n<ul>\n<li><span>Books &amp; Ebooks<\/span><\/li>\n<li><span>Course<\/span><\/li>\n<li><span>Chat room<\/span><\/li>\n<li><span>Video tutorial<\/span><\/li>\n<li><span>PDF (eg Tom Demark day trading example pdf)<\/span><\/li>\n<li><span>Forum<\/span><\/li>\n<li><span>Blogs<\/span><\/li>\n<li><span>Podcasts<\/span><\/li>\n<\/ul>\n<p><strong><span>Demo Account<\/span><\/strong><\/p>\n<p><span>It&#8217;s hard to resist the urge to throw your hat in the ring early on.\u00a0However, getting to grips with stock options strategies with a demo account for the first time is often a wise decision.\u00a0Not only can you reduce the weaknesses in your trading plan, but you can also try out your broker&#8217;s platform before you buy.<\/span><\/p>\n<p><span>They are funded with simulated money so you don&#8217;t have to worry about risking the capital earned.\u00a0A Demo Account is an ideal place for trial and error.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><a href=\"https:\/\/iqoption.com\/lp\/mobile-partner\/ru\/?aff=12245&amp;afftrack=&amp;clickid=\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/iqoption.png\" alt=\"\" width=\"300\" height=\"72\" \/><\/a><\/h2>\n<p>&nbsp;<\/p>\n<p><strong><span>Rules &amp; Restrictions<\/span><\/strong><\/p>\n<p><span>It is important that you know the rules for day trading options in your country and market.\u00a0For example, in the US, there are FINRA trading regulations on options.\u00a0This rule stipulates that if you meet the criteria of a &#8216;pattern day trader&#8217; (trade more than four times in five working days), you must hold an account with at least $25,000.\u00a0Therefore, if you do not have significant capital to start with, then the trade may not be off, right now.<\/span><\/p>\n<p><span>However, while pattern day trading does not apply to options in the US, many other countries do not have such restrictions.<\/span><\/p>\n<p><strong><span>Tax<\/span><\/strong><\/p>\n<p><span>In other countries, you may have to consider taxes.\u00a0How are your profits taxed?\u00a0Will they be considered personal income, business income, speculative or non-speculative?\u00a0Your tax obligations can affect your bottom line.\u00a0So, know what kind of tax you have to pay and how much?<\/span><\/p>\n<p><strong><span>Software<\/span><\/strong><\/p>\n<p><span>One of the best day trading options tips if you have an effective strategy is to consider using automated software.\u00a0Once you have programmed in your criteria, the algorithm will execute the trades on your behalf.\u00a0This can speed up trading time, and it allows you to make more trades than you could manually.\u00a0However, it is important to note that this is the most effective tool when you have a consistent strategy in place.<\/span><\/p>\n<p><strong><span>risk management<\/span><\/strong><\/p>\n<p><span>Whether you day trade using weekly options, or you trade daily AAPL options, a risk management strategy is essential.\u00a0This will help you minimize your losses and ensure you always get another crack at the market.<\/span><\/p>\n<p><span>Many experienced traders advise using the 1% rule.\u00a0This rule states that you cannot risk more than 1% of your account balance in a single trade.\u00a0Therefore, if you have $40,000 in your account, the maximum position size you take is $400. Once your strategy turns consistent results then you can consider increasing your risk between 2-5%.<\/span><\/p>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><span>Take Points Away<\/span><\/h2>\n<p><span>As a day trader, you have two objectives.\u00a0First, make money.\u00a0Second, do so with minimal risk.\u00a0Options are the ideal instrument for day traders looking for both.\u00a0When day trading options are good, you have the ability to set clear limits on risk, and the ability to buy and sell options multiple times to profit again from stock price movements.\u00a0They offer advantages that other financial instruments do not necessarily.<\/span><\/p>\n<p><span>In addition, whether you day trade S&amp;P 500 options, or delta options and spies, there are always interesting options.\u00a0As the popularity for traditional options grows though, it&#8217;s important that you use all the resources around you to assert a competitive advantage.\u00a0This means diving into books and online tools, and honing your strategy.<\/span><\/p>\n<p><span>Finally, as Robert Arnott said, &#8221;\u00a0\u00a0<\/span><em><span>In investing, what is comfortable is rarely profitable<\/span><\/em><span>\u00a0\u00a0.&#8221;\u00a0So enjoy the road ahead, it may be bumpy, but it could also be filled with gold.<\/span><\/p>\n<h2 data-fontsize=\"39\" data-lineheight=\"39\"><a href=\"https:\/\/iqoption.com\/lp\/mobile-partner\/ru\/?aff=12245&amp;afftrack=&amp;clickid=\" target=\"_blank\" rel=\"noopener noreferrer\"><img decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/trade-malaysia-option.com\/wp-content\/uploads\/2020\/04\/iqoption.png\" alt=\"\" width=\"300\" height=\"72\" \/><\/a><\/h2>\n<p>&nbsp;<\/p>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<\/article>\n<\/section>\n<\/div>\n<p><\/main><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On the past day trading options is not part of most traditional intraday strategies.\u00a0However, times are changing and today&#8217;s traders make a lot of money using options.\u00a0This page will highlight the benefits and drawbacks of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":3566,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[103],"tags":[],"class_list":["post-4357","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-panduan-en"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts\/4357"}],"collection":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/comments?post=4357"}],"version-history":[{"count":2,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts\/4357\/revisions"}],"predecessor-version":[{"id":4359,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/posts\/4357\/revisions\/4359"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/media\/3566"}],"wp:attachment":[{"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/media?parent=4357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/categories?post=4357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trade-malaysia-option.com\/en\/wp-json\/wp\/v2\/tags?post=4357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}