I'm looking at getting started in options trading (or investing if the concept is possible with something as volatile), I have a read a few books on it and I believe I understand the pricing, volatility, risks and benefits of options.
I've been into shares (mostly investing, but a little bit of trading on the side too) for around a year, which may sound like a short amount of time and thus inexperience but I believe I have the right mindset. I'm not the sort of person who buys a stock when the newspaper has an article about how good the company is and the price has already leapt to a high.
My trading account is ready and I have bought a cheap telstra call (5.19 Sep 05) because I believe the price might go up a bit more before time decay sets in too badly.
But I'm not sure what to do next. The main thing I am worried about is how to predict the movement of a share price during the period of the option contract. So can you guys recommend any good books/websites, I assume charting and other trading books would also apply to options?
My idea is to start with a long dated (1 year or so) at-the-money call for one of the big banks which I plan to buy at the best possible price. One of these, I assume, would keep the volatility down and give plenty of time to sell to stop a loss or realise a gain without a sudden movement in the stock reducing the value of the option to nothing as it might with a shorter term.