Commentary on The Journey from the Basement

[Splitlink]

the only thing SOCRATES done..was..speak the truth

as for the black swan..i can assure you SOCRATES did not lose any money..he is way too smart for that..in fact..the truth is he used his option winnings to purchase a yacht..he sent me a picture of it..might even have it on an old laptop

as for me..the thick paddy..i lost money alright..but it was all my own fault..no one else..i overtraded..got greedy after making a good bit of money with The Bull..thought i knew it all..but i got caught..and gave a good bit of the winnings back..but not it all

since then i have traded with a few others..seen some things that opened my eyes further..but..of all the trading i have seen..the only way that was guaranteed to make you money was The Bull's option trading method on the FTSE 100 index..and..it is still the same..of course..in order to not lose..you must have sufficient capital..as hh is saying..most do not understand drawdowns..which are an integral part of trading for large gains

another old saying..money makes money..how true

The last thing I want is a discussion about him! It was a long time ago and I have moved on.

If you find him, I'm sure that you deserve each other.

 

[tar]

Say what now, european options are locked in until the expiry. At least now we can put that to bed.

No , you can close and offset European style options - example SPX options - at anytime you want , but you cant exercise ITM options b4 expiry time .

 

[hhiusa]

No , you can close and offset European style options - example SPX options - at anytime you want , but you cant exercise ITM options b4 expiry time .

Again. Not being able to back up your former statements. Well? Go on! Explain!

What you fail to understand that not everyone will keep averaging down without a stop like you do . You assume that if my trade exposure is 20K then i am risking 20K as well and i will wait and watch it going to zero without doing anything !

Using leverage doesn't mean i cant afford to lose the money and not using leverage doesn't mean you can afford to lose the money , if you put 100K in your stocks account that doesn't necessarily mean you can afford to lose it .

 

[tar]

Again. Not being able to back up your former statements. Well? Go on! Explain!

There's a difference between offsetting and exercising , do some research .

Offsetting : You take the other side of your trade , for example if you are long a call then you sell it .

Exercising : You exercise your right to buy or sell the security if your option is ITM - . With American style options you can do that at anytime if your option is ITM ofcourse , with European style options you only can at the expiry time - cash settled - .

 

[hhiusa]

There's a difference between offsetting and exercising , do some research .

Offsetting : You take the other side of your trade , for example if you are long a call then you sell it .

Exercising : You exercise your right to buy or sell the security if your option is ITM - . With American style options you can do that at anytime if your option is ITM ofcourse , with European style options you only can at the expiry time - cash settled - .

That is obviously not what I was asking about. Do not be so thick. If you are leveraging yourself and you do not double down and/or wait. How long and how much loss (in percentages) will you endure before closing if it moves against you?

Secondly, why would you open a trade that is essentially betting against yourself. That is like placing a bet that Mike Tyson will win and another that he will lose. If you lack that much resolve about your trade, why place it?

 

[tar]

That is obviously not what I was asking about. Do not be so thick. If you are leveraging yourself and you do not double down and/or wait. How long and how much loss (in percentages) will you endure before closing if it moves against you?

Secondly, why would you open a trade that is essentially betting against yourself. That is like placing a bet that Mike Tyson will win and another that he will lose. If you lack that much resolve about your trade, why place it?

Forget about what i do it doesn't concern you i have a thread for that , there are much more important things that apparently you dont know hh like : that futures positions can be closed b4 expiry time and European style options can be closed b4 expiry time as well , and that there's a difference between exercising and offsetting options .

When you offset an option you are not betting against yourself , maybe you changed your mind and want out for a small loss - buy an option at 0.70 few days later out at 0.40 - , or even maybe you want out to take a profit for example : I buy a call at 0.20 and after few days it became 0.30 i may close and offset here i dont have to wait till expiry especially if it was an OTM option which may expire worthless .

OTM : Out Of the Money .

 

[hhiusa]

Forget about what i do it doesn't concern you i have a thread for that , there are much more important things that apparently you dont know hh like : that futures positions can be closed b4 expiry time and European style options can be closed b4 expiry time as well , and that there's a difference between exercising and offsetting options .

When you offset an option you are not betting against yourself , maybe you changed your mind and want out for a small loss - buy an option at 0.70 few days later out at 0.40 - , or even maybe you want out to take a profit for example : I buy a call at 0.20 and after few days it became 0.30 i may close and offset here i dont have to wait till expiry especially if it was an OTM option which may expire worthless .

OTM : Out Of the Money .

No, I understand it well. You trade like you are gambling in a casino.

Offsetting or whatever you want to call it, is betting against yourself. If you have opened a long and then open a short position, then that is exactly what it is. It can only move in one direction. With you or away from you. Making contradictory trades is pretty counterproductive. Again, changing your mind sounds like you lack resolve. All this speculative risky behavior with money that is not even yours. It will not surprise me if you blow up your account several times over. Addtionally, your statements about leverage are elucidating with regards to your account size.

You can twist anything all that you like. Offsetting is not closing. Whatever semantics you want to use to say that you have closed it before the expiry is moot. I was speaking in strict terms about European versus American style.

 

[tar]

No, I understand it well. You trade like you are gambling in a casino.

Offsetting or whatever you want to call it, is betting against yourself. If you have opened a long and then open a short position, then that is exactly what it is. It can only move in direction. With you or away from you. Making contradictory trades is pretty counterproductive. Again, changing your mind sounds like you lack resolve. All this speculative risky behavior with money that is not even yours. It will not surprise me if you blow up account several times over. Addtionally, your statements about leverage are elucidating with regards to your account size.

You can twist anything all that you like. Offsetting is not closing. Whatever semantics you want to use to say that you have closed it before the expiry is moot. I was speaking in strict terms about European versus American style.

Its not semantics ! If you offset your option trade it is closed thats a fact ask your broker there will be no open positions in your account same goes for futures positions . Ofcourse you shouldn't long a call and offset it simultaneously otherwise you will lose in commissions and bid-ask spread .

 

[hhiusa]

Its not semantics ! If you offset your option trade it is closed thats a fact ask your broker there will be no open positions in your account same goes for futures positions . Ofcourse you shouldn't long a call and offset it simultaneously otherwise you will lose in commissions and bid-ask spread .

I still understand the definition of offset. You essentially use two trades cancel each other. Again, counterproductive. Two trades to do what one could do nicely and with less commission since you seem to be worried about that.

 

[hhiusa]

Instead of doubling down, you would prefer to place two trades in opposite directions.

 

[tar]

I still understand the definition of offset. You essentially use two trades cancel each other. Again, counterproductive. Two trades to do what one could do nicely and with less commission since you seem to be worried about that.

Not counterproductive unless you do it simultaneously , however during the holding time you may decide to close/offset your option trade for a profit or a loss you dont have to wait till expiry time . Options prices fluctuate and it can be traded in and out .

 

[tar]

Instead of doubling down, you would prefer to place two trades in opposite directions.

No , read my posts .

 

[hhiusa]

Not counterproductive unless you do it simultaneously , however during the holding time you may decide to close/offset your option trade for a profit or a loss you dont have to wait till expiry time . Options prices fluctuate and it can be traded in and out .

Not quite. Doing it any time during which you hold the contract for the opposite position is counterproductive. You have now paid two premiums to hold two contracts in conflict with one another.

I am still waiting to here what your stops are. They must be pretty tight to avoid overtrading with your thinly capitalized account.

 

[tar]

You dont understand the concept of closing a trade ...

 

[tar]

Not quite. Doing it any time during which you hold the contract for the opposite position is counterproductive. You have now paid two premiums to hold two contracts in conflict with one another.

I am still waiting to here what your stops are. They must be pretty tight to avoid overtrading with your thinly capitalized account.

You dont pay - options - premium twice ! One trade is a buy the other - later on - would be a sell to close the buy , i sold/collected premium the second time i didnt pay it

 

[hhiusa]

You dont understand the concept of closing a trade ...

Yes I do. While you have explained how you have closed the trade. You are not recognizing how you have two contracts in direct conflict with one another. As I said, it is still counterintuitive and counterproductive to hold conflicting positions. It might come close to making sense if you are closing one before opening another in the other direction. From what you have written, that does not seem to be the case. You are leveraging in two directions with thin capitalization.

 

[tar]

Yes I do. While you have explained how you have closed the trade. You are not recognizing how you have two contracts in direct conflict with one another. As I said, it is still counterintuitive and counterproductive to hold conflicting positions. It might come close to making sense if you are closing one before opening another in the other direction. From what you have written, that does not seem to be the case. You are leveraging in two directions with thin capitalization.

Your trade is closed no margin is required from you and there will be no open positions in your account anymore so you are not holding two positions , do you trade ?

 

[hhiusa]

Your trade is closed no margin is required from you and there will be no open positions in your account anymore , do you trade ?

Obviously the position is closed. Are you saying that you close your long before you open a short so to speak? Why use two trades when one will do? I know that margin is not required. However, you have indicated that you leverage your account.

 

[hhiusa]

I am still waiting to here what your stops are. They must be pretty tight to avoid overtrading with your thinly capitalized account.

 

[tar]

When you open a trade in the another direction it automatically closes your existing position . You cant hold two positions in opposite directions , you cant hold long stock and short same stock positions in the same account , same goes for options and futures .