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SOCRATES said:There is a lull in the proceedings so I have a few seconds...
From now on I am going to abbreviate it ever further to:~ 2 bizzi...just to please you.....Spitlink.
The "2", I accept. "Bizzi" shows ignorance and a reluctance to be taught by your betters.
Jack o'Clubs
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SOCRATES said:
I'm retired but work in the afternoons, unofficially. At the moment, as nothing is happening this morning, I have time to meditate on your peculiar means of expression. So, you busy b, as it's my lunchtime, have fun and don't sell anything that I wouldn't.
I may disagree with you, but I wish you good trading, by the way.
Split
SOCRATES
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A bit of variety, u c...to spice up the thread a bit...:cheesy:Splitlink said:
That was a bit of mr marcus...next week I may let you have a bit of db phoenix
rolleyes: ) or some Bulldozer...cheesy: ) or ....we will see how things pan out... ...I might even do some Counter Violent or Spam Man rolleyes: )...we'll see...
counter_violent
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SOCRATES said:A bit of variety, u c...to spice up the thread a bit...:cheesy:
That was a bit of mr marcus...next week I may let you have a bit of db phoenix
Who rattled your cage? I purplenessly stayed clear of this silly thread...silly purple person you are..that is all...thank you
Profitaker
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I haven’t issued any “challenge” to anybody, because I already know what the outcome of any writer / buyer “challenge” would be, at least if it was done on a scientific basis. What I have done, many times, is pointed out that there is no inherent edge to writing rather than buying options. Or if you prefer, there is no edge to buying rather than writing options.Charlton said:
The above should not be confused with making a successful directional call on the market, in which case a profit will be made, regardless of the instrument used.
The question is not how much money did you make from selling puts, but should be..... would you have made more money (or less) from buying calls ? And the answer obviously is – it depends on how fast the market moves against how quickly the option time premium decays.
Short Puts work best in a flat to slightly rising market when option implied vol is high.
Long calls work best in a rapidly rising market when option implied vol is low.
Now, which of the above best describes the market we are experiencing right now ?
Profitaker
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1) You should think of how far OTM to write in terms of standard deviations, not percentages.polpolik said:
2) Depends on your market view. Generally option shorters go for the front month, while buyers go for the back months, hence lower vols in the front months, when compared to the back months . But that’s not to say you should go with the majority. As I said, it depends on your market view in terms of direction and / or volatility.
I wouldn’t expect an answer from Soc anytime soon if I were you, as he has some serious studying to do any many years experience to gain trading options before he could possibly hope to answer any questions of a technical nature, which yours are.
Thanks profittaker, at least you took the time to answer my questions that apparently, Socrates is too "bizzi" to. While I'm not sure how standard deviations are measured, I will definitely research some more to present a smarter question next time around
Profitaker said:
Polpolik,
As Profitaker is too bizzi to expand, I’ll have a go.
The standard deviation is the implied volatility. The implied volatility is expressed in annual terms for all expiry periods.
To calculate 1 standard deviation of the underlying, we multiply the underlying price by the implied volatility and multiply this by the square root of time remaining to expiry.
For example, underlying 5000, imp vol 25%, 90 days to expiry: 5000 x 0.25 x sqrt(90/365) = 621.
This means, at this level of imp vol, the underlying can fluctuate up to +/- 621 points (I standard deviation), ie between 5621 and 4379, within the next 90 days. However, this range will change whenever the implied volatility changes.
The same method allows calculation for shorter time periods, ie prior to expiry, eg in 20 days (sqrt(20/365)): +/- 293 points.
Grant.
As Profitaker is too bizzi to expand, I’ll have a go.
The standard deviation is the implied volatility. The implied volatility is expressed in annual terms for all expiry periods.
To calculate 1 standard deviation of the underlying, we multiply the underlying price by the implied volatility and multiply this by the square root of time remaining to expiry.
For example, underlying 5000, imp vol 25%, 90 days to expiry: 5000 x 0.25 x sqrt(90/365) = 621.
This means, at this level of imp vol, the underlying can fluctuate up to +/- 621 points (I standard deviation), ie between 5621 and 4379, within the next 90 days. However, this range will change whenever the implied volatility changes.
The same method allows calculation for shorter time periods, ie prior to expiry, eg in 20 days (sqrt(20/365)): +/- 293 points.
Grant.
allright, I don't want to contribute to this thread really, just want to remain in the background and study it carefully, so let me be blunt with you profittaker, grantx etc. . . we are not interested in these silly talks about deltas, volatility indicators etc. . . as Socrates pointed out. We are not. Leave it alone and let Socrates complete this thread, and please stop boring us to tears. Let the man finish what he started.
I have nothing much further to say, apart to say that when you talk about stuff like this you are doing what I would construed as "lazy" thinking. That's what indicators are really, and all statistics as well. You should not confuse the study of statistics with the statistic itself. Scientists only apply statistical models when they don't understand the system well enough, it's a form of "lazy" thinking, a cheap short cut . . . . there are also other reasons/elaborations but this is NOT the place for it.
anyway, enough of me, and please leave all these extraneous uncalled for discussions out of the thread.
I have nothing much further to say, apart to say that when you talk about stuff like this you are doing what I would construed as "lazy" thinking. That's what indicators are really, and all statistics as well. You should not confuse the study of statistics with the statistic itself. Scientists only apply statistical models when they don't understand the system well enough, it's a form of "lazy" thinking, a cheap short cut . . . . there are also other reasons/elaborations but this is NOT the place for it.
anyway, enough of me, and please leave all these extraneous uncalled for discussions out of the thread.
Stoic,
So when the thread is complete we may have an indication that writers have the edge (or not, as the case may be). But we need to know How and Why? If not, then what? We all take flyers and sell everything and anything, regardless of the “statistics” and become obscenely wealthy? This may be conducive to a stoic temperament but like Diogones (excluding the pot he lived in) we won’t have a pot to pssi in.
Whether we are “bored” with deltas, etc or not, is irrelevant - they are the reality. “Lazy thinking”? In contrast to your “non-thinking”.
“I don't want to contribute to this thread”. Don’t worry, you haven’t. “I have nothing much further to say”. You haven’t said anything.
This is one big democracy, no coercion - contribute or not, read or avoid.
Grant.
So when the thread is complete we may have an indication that writers have the edge (or not, as the case may be). But we need to know How and Why? If not, then what? We all take flyers and sell everything and anything, regardless of the “statistics” and become obscenely wealthy? This may be conducive to a stoic temperament but like Diogones (excluding the pot he lived in) we won’t have a pot to pssi in.
Whether we are “bored” with deltas, etc or not, is irrelevant - they are the reality. “Lazy thinking”? In contrast to your “non-thinking”.
“I don't want to contribute to this thread”. Don’t worry, you haven’t. “I have nothing much further to say”. You haven’t said anything.
This is one big democracy, no coercion - contribute or not, read or avoid.
Grant.
Thank you, grantx.
As all newbies go, I've started selling naked calls and puts recently and like most newbies, have been quite consistent in making money BUT I know I'd be foolish to think this will continue on without knowing the greeks that truly affect the prices.
Selling insurance this is not. Either way, good luck to Socrates and thanks to profitaker and grantx for at least contributing something of substance to this thread.
As all newbies go, I've started selling naked calls and puts recently and like most newbies, have been quite consistent in making money BUT I know I'd be foolish to think this will continue on without knowing the greeks that truly affect the prices.
Selling insurance this is not. Either way, good luck to Socrates and thanks to profitaker and grantx for at least contributing something of substance to this thread.
grantx said:
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stoic said:
Ah, stoic. Like me, you find correct option trading very difficult to understand. Perhaps, you feel that profittaker, by talking about deltas, etc.is only muddying the waters and you do not wish to partake in it because of its difficulty.. However, profittaker is talking about how options tick, whether we like it, or not. Socrates tells us nothing of his strategy and we have no idea of whether that string ---how long is a piece of string, by the way?---- of profits is going to last and how much will be lost in the one big fall that can wipe him out. Socrates is gambling on one thing that frightens me, at least. He is saying that the Black Knight is not around the next corner. He is using statistics, too. He is not tellng us how to deal with that because he cannot. All the books that I have read have told me that naked writing is dangerous and why. Socrates can't come along and say that it isn't without explaining why and expect credibility.
Split
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