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Prashant, it sounds like you need to learn a lot more about
option pricing and how they are traded.
In general option prices roughly follow the underlying
security. The actual price of the option depends upon a number of factors
including ratio of options per share, time decay and what they called Greeks,
delta, gamma and a few others.
As far as risk/reward of 1:5 it all depends on how you
define the target and stop loss. There are no definitive answers to these and
you could get as many answers as there are traders.
Some basics are take signals from underlying security, find
the option with longest life (and thus less time decay up front). A lot more to
it, but I am no expert.
Cheers,
Graham
http://e-wire.net.au/~eb_kavan/
<span
>-----Original Message-----
From: Prashant Nayak
[mailto:pnayak@xxxxxxxxxxxxx]
Sent: Monday, June 21, 2004 8:07
PM
To: amibroker@xxxxxxxxxxxxxxx
Subject: Re: [SPAM] - [amibroker]
options -deravatives. - Email found in subject
<font size=2
face="Times New Roman">
<span
>can anybody help pl ?
<font size=2
face="Times New Roman">
<font size=2
face="Times New Roman">
<span
>----- Original Message -----
<font
size=2 face=Arial>From: <a
href="" title="pnayak@xxxxxxxxxxxxx">Prashant Nayak
<span
>To:<font
face=Arial> <a
href="" title="amibroker@xxxxxxxxxxxxxxx">amibroker@xxxxxxxxxxxxxxx
<span
>Sent:<font
face=Arial> Sunday, June 20, 2004 2:59 PM
<span
>Subject:<font
face=Arial> [SPAM] - [amibroker] options
-deravatives. - Email found in subject
<font size=2
face="Times New Roman">
<span
>HI,
<font size=2
face="Times New Roman">
<span
>I am learning stock option trading
and find it though highly profitable but also see it is equally risky in a
volatile market. This is the reason I avoid many times trading in a stock
option.
<font size=2
face="Times New Roman">
<span
>How does one find a stock option
which has a risk reward of 1:5 or higher ?
<font size=2
face="Times New Roman">
<span
>Are there any indicators,
though I may have the price/vol data of the underlying security
only ?
<font size=2
face="Times New Roman">
<span
>Prashant
<font size=2
face="Times New Roman">
Check AmiBroker web page at:<font
face="Courier New">
http://www.amibroker.com/
Check group FAQ at: <a
href="">http://groups.yahoo.com/group/amibroker/files/groupfaq.html
Check AmiBroker web page at:<font
face="Courier New">
http://www.amibroker.com/
Check group FAQ at: <a
href="">http://groups.yahoo.com/group/amibroker/files/groupfaq.html
Check AmiBroker web page at:
http://www.amibroker.com/
Check group FAQ at: http://groups.yahoo.com/group/amibroker/files/groupfaq.html
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