Unlimited Profit Risk-free Forex Options trading | Forex Factory

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Unlimited Profit Risk-free Forex Options trading

  • #1
  • First Post: Edited Dec 10, 2023 10:20am Jan 24, 2023 3:03am | Edited Dec 10, 2023 10:20am
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  • #2
  • Jan 24, 2023 11:58am Jan 24, 2023 11:58am
Sounds very good Only problem is I don't understand. How can you make money if you buy and sell at the same time.

How much costs such an insurance.
  • #3
  • Jan 24, 2023 12:51pm Jan 24, 2023 12:51pm
Quoting Eren10
Sounds very good Only problem is I don't understand. How can you make money if you buy and sell at the same time. How much costs such an insurance.
You should open a demo options trading account and play with it. Also read some basic definitions about options trading, read some basic introduction online.
  • #4
  • Jan 24, 2023 1:16pm Jan 24, 2023 1:16pm
Quoting costos
{quote} You should open a demo options trading account and play with it. Also read some basic definitions about options trading, read some basic introduction online.
Thanx, I will search a good video about how it works.

I need that unlimited profit
  • #5
  • Jan 25, 2023 12:38pm Jan 25, 2023 12:38pm
I have watched some option videos, I know now the very basics. Can you give an example of what you explained there.
  • #6
  • Jan 26, 2023 3:45am Jan 26, 2023 3:45am
What is not clear to you exactly?
  • #7
  • Jan 27, 2023 3:59am Jan 27, 2023 3:59am
Quoting costos
What is not clear to you exactly?
I’ve got a question— why’s the only strategy I’ve ever seen published on FF with positive expectancy sat in the rookie section
  • #8
  • Jan 27, 2023 6:42am Jan 27, 2023 6:42am
Quoting triphop
{quote} I’ve got a question— why’s the only strategy I’ve ever seen published on FF with positive expectancy sat in the rookie section
Hey, thanks. It was originally in the Trading Systems section but got miraculously moved. But hey, maybe this will save newcomers lots of time and money?
  • #9
  • Jan 27, 2023 11:55am Jan 27, 2023 11:55am
Quoting costos
{quote} Hey, thanks. It was originally in the Trading Systems section but got miraculously moved. But hey, maybe this will save newcomers lots of time and money?
It would do, and it should do ... but this place is completely topsy turvy, and there's a gravitational pull to all that's unprofitable which I can't for the life of me explain.
Still, excellent work squire.
  • #10
  • Jan 28, 2023 3:28pm Jan 28, 2023 3:28pm
Quoting costos
What is not clear to you exactly?
Now what I understand is: you buy a call and a put.

Once the price chooses one direction you close the opposite side. However, you paid premiums for buying. So how you generate money. Do you expect that one side goes more than the price you paid. Obviously I don’t understand itz can you explain it, maybe with hypothesis numbers.
  • #11
  • Jan 28, 2023 10:34pm Jan 28, 2023 10:34pm
Quoting Eren10
{quote} Now what I understand is: you buy a call and a put. Once the price chooses one direction you close the opposite side. However, you paid premiums for buying. So how you generate money. Do you expect that one side goes more than the price you paid. Obviously I don’t understand itz can you explain it, maybe with hypothesis numbers.
A lot of money is generated when you SELL a call or a put every day. In 23 business days you've sold 23 of those and they will likely all mature and profit on those will add up to a total amount that's 10-20 times more than what you spent on buy a call and a put. And if you price moves to any of the bought call/put levels then in addition you make anything from that.
  • #12
  • Jan 29, 2023 12:19pm Jan 29, 2023 12:19pm
Quoting costos
{quote} A lot of money is generated when you SELL a call or a put every day. In 23 business days you've sold 23 of those and they will likely all mature and profit on those will add up to a total amount that's 10-20 times more than what you spent on buy a call and a put. And if you price moves to any of the bought call/put levels then in addition you make anything from that.
Don’t you have then 23 open positions for selling. What if these go against your position
  • #13
  • Jan 29, 2023 2:58pm Jan 29, 2023 2:58pm
Quoting Eren10
{quote} Don’t you have then 23 open positions for selling. What if these go against your position
Why would you even consider his proposal...it looks like the work of a kindergarten kid..
  • #14
  • Jan 30, 2023 5:10am Jan 30, 2023 5:10am
Quoting Elknit
{quote} Why would you even consider his proposal...it looks like the work of a kindergarten kid..
Just trying to know more about options. Maybe it is usefull
  • #15
  • Jan 31, 2023 10:32pm Jan 31, 2023 10:32pm
Quoting Eren10
{quote} Now what I understand is: you buy a call and a put. Once the price chooses one direction you close the opposite side. However, you paid premiums for buying. So how you generate money. Do you expect that one side goes more than the price you paid. Obviously I don’t understand itz can you explain it, maybe with hypothesis numbers.
hi very compliments for this thread. It would be nice to post a numerical example with also graphical payoff
  • #16
  • Edited 10:52am Mar 5, 2023 10:34am | Edited 10:52am
Interesting idea to trade options.. on weekends did some initial research.

Found here an interesting calculator for options - and calculated some examples - you can see here one calculation.

As I understand the riskiest (and most rewarding) is Writing (Sell) Puts/Calls.

In the example which I provided above, I see this:

Attached Image (click to enlarge)
Click to Enlarge Name: hut_option1.png Size: 13 KB

As I understand - 1 deal looks like this:

I enter Write of PUT with 84$. If all goes wery bad then I lose additional 32$ (which must be on my account - I am required in the worst scenario buy 400 HUT shares for a price of 0.50$ even if 1 HUT cost is 0$). Total max loss is 116$ (+ transaction fees). Right?

But.. if I stay in the green area... like here:

Attached Image (click to enlarge)
Click to Enlarge Name: hut_green.png Size: 64 KB

Then I can exit at any time with profits? No matter that the expiry of my PUT is 2 years? For example on March 23 I can exit deal with profits if HUT price is for example 1.30$ then I exit with profit 24$. All green area is ok for me..

So, risk/reward here is 116/24 (+ transaction fees).

If I can repeat this 5x in a row (with 84% success probability for each try).. Then with ~116 usd capital I get 120 usd profits (in 5 months).

Question regarding red zone.. in case I am in the red zone I automatically lose because I am required to purchase stocks as Write PUT deal it means.. or I can wait till expirity date and hope for retrace..? hmm.. If I can wait for a retrace then if I understand all this right - then it sounds for me interesting to learn more and maybe try with some demo money..
  • #17
  • Mar 5, 2023 12:08pm Mar 5, 2023 12:08pm
There is almost no risk to sell puts/calls in forex option futures if you sell them far away in the green zone, almost as far as you can from the current price (but not quite). There may be a little draw-down but pretty short-lived and balanced out by the strategy of selling options only in the direction of the price.

In this strategy, you never leave any sold puts or sold calls open if the price reaches the sold call or sold put level because that would be unlimited loss potential that you cannot control - but this is by design a very rare occurrence that you don't even care about.

I only looked at forex option futures so I cannot attest this will work in other markets. There may be different behaviors there but since selling options is an insurance business by nature it should be the same hypothetically.

Not all options brokers offer a nice interface for options trading that's conducive to getting comfortable truly understanding and trading options. There may be one or two only that really stand out.
  • #18
  • Apr 1, 2023 12:01pm Apr 1, 2023 12:01pm
Quoting costos
In this strategy, you never leave any sold puts or sold calls open if the price reaches the sold call or sold put level because that would be unlimited loss potential that you cannot control - but this is by design a very rare occurrence that you don't even care about.
There's a decay curve in play on the sell option side so you can modify this strategy to limit drawdown risk further.
  • #19
  • Apr 14, 2023 1:24pm Apr 14, 2023 1:24pm
Quoting costos
a) BUY 1 CALL and 1 PUT at the very, very cheapest price level of a call ABOVE the current price b) BUY 1 CALL and 1 PUT at the very, very cheapest price level of a put BELOW the current price
If you buy 1 CALL far OTM (very cheaply), then your 1 PUT at that price will be very expensive (far ITM ~ 1 delta). Same for the other side. What am I missing? Also how do you decide whether to do a) or b) ?
1.02^200
  • #20
  • Apr 14, 2023 8:07pm Apr 14, 2023 8:07pm
I have wondered how options in the fx market could play a role in at least minimizing some risks. I’ll have to look into this more but interesting thread nonetheless imo. I have never traded options although I have an ok rather novice knowledge about them.
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