Hoggums
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jimbo45 is so wrong and will no doubt find out the "price" of his advice soon enough.
Options are priced so that ignoring buy/sell spreads the sum of probabilities of it being a winner x the amount won = sum of the probabilities of it losing x the amount lost.
If you were to trade an infinite number of options at different strikes with no spread then you would end up with the same money as you started with whether buying or selling.
But you are paying spread so, you will lose money. Unless you are using some sort of trading edge. Of course options are based on assumptions of volatility, price movement distribution etc but by chance they will favour the buyer/seller in equal amounts.
Telling newbies just to sell options is stupid and irresponsible. Just wait until we get a market crash and see how negative your positions go. That 15% chance of failure will be very expensive.
Options are priced so that ignoring buy/sell spreads the sum of probabilities of it being a winner x the amount won = sum of the probabilities of it losing x the amount lost.
If you were to trade an infinite number of options at different strikes with no spread then you would end up with the same money as you started with whether buying or selling.
But you are paying spread so, you will lose money. Unless you are using some sort of trading edge. Of course options are based on assumptions of volatility, price movement distribution etc but by chance they will favour the buyer/seller in equal amounts.
Telling newbies just to sell options is stupid and irresponsible. Just wait until we get a market crash and see how negative your positions go. That 15% chance of failure will be very expensive.
