Income from investing in Stock Options?

Question:

Are there any investors who invest in stock options that have created an extra income for themselves? There is a difference between INVESTING and Working for a Living (paycheck). I have been investing in LONG CALL optrions recently. Opened an account with a deep discount brokerage-only $5.00 per trade.. I found one stock-an ETF INDEX option that seems to be working in my favor. Since most foreig market INDEXES seem to move in an upward trend i feel comfortalbe with it. It is the iShares MSCDI CANADA ETF. I have bought and sold it 2 times at a profit each time. It returned more than 50% each trade in 2 months. The discounted broker commission helps me keep more profit to. But again, is it possible to create a second income by trading LONG CALL stock options? Thanks

Answer:
I sure I knew a couple of guys that tried it, in 1999. By 2001, both were broke and out of a job. If your trying to get out of working by day trading your probably in for a rude awaking.

Also what your describing is TRADING, attempting to profit on short term moves in a security. That is a whole different creasture from INVESTING, which is participating in the long term success of a company.

Also, your comment about foreign markets is exactly the reason I lightened up on my International investments. Because its been going up rapidly is a reason to be CAUTIOUS not comfortable. Especially with the dollar in decline, it makes US exports cheaper in foreign markets and foreign imports more expensive in the US.

There is an income strategy with options, covered call writing. When you hold a stock position you write a call against it. You give up the possiblity some amount of capital gains on the stock, in exchange for the certainty of a option premium payment.

When you are bullish on the market, there are much more SAFER and more VERSATILE ways to profit than to use simply a long call option. Please visit http://www.optiontradingpedia.com/free_o... for more option trading ideas and strategies.

I know that same group of traders are using option as their tool and make a lot of money.

However their strategy are short trading. Making 20 - 50% of return in few days. So, you want to make a living from option you need to do some study.

So far, some good answers. You need to do a LOT of self education before depending on a second income from options.

More options expire worthless than are exercised. Personally, I do well selling options. However, there is unlimited risk (on short calls) and almost unlimited risk (on short puts).

As one person said, there are a lot more versatile ways of making money than long calls.

Good luck!

It really is based on how much capital you have to invest. You can make a second income by using a covered call strategy.

Income from investing in Stock Options?

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