Plain Vanilla Options Trades.

[FXSCALPER2]

Man, you gotta be kidding me! You fell of your chair? How much do you care about this stuff? You haven't got anything better to do? I don't even know why you fell of your chair,really, Truth man. You kill me, boy, hehe.

 

[rockseller]

I would like to salute you for doing your trade live. If you are going to make 20 out of 20 or anything above 90%. That gonna be something.

It clear to a lot of people are interested in live trade for variety of reasons judging from the hits this website receive. You have shown it if one have edge, decent money can be made.

I am waiting looking forward on your new series.But if you will next time go for writing call options or futures. What do you think.

It really should matter if is socrates or bullodozer writing this trades or both working together. It socrates reputation on line.

The name of the website is called trade2win and socrates so has been trading and winning. I thought a lot of traders would be pleased and inspired knowing that with proper skill Trading might be very profitable.

By the way i think writer has got an edge simply because you need to understand the dynamics involves very well. Having said that competent option trader will make money buying or selling.

 

[Profitaker]

Having said that competent option trader will make money buying or selling.

Indeed. A competent option trader will also quantify Gamma and Vega risks and keep both within acceptable limits. Socrates and Bulldozer haven't discussed this aspect of option trading - because they can't.

What bothers me is that the newbies reading this thread will think that writing naked Puts is money for old rope, but it's not. Risk has a value, and the writer is being paid to undertake that risk by the buyer.

Trust me when I say it isn't a one-way street.

 

[rockseller]

Point taken Profitaker, Socrates in your new series can we discuss points raised by profitaker.

 

[PKFFW]

for goodness sake's dc2000, leave the man alone.

let me be clear on my position here, I am not on Socrates' side - far from it. But nearly all of you are behaving quite monstrously to him. He set himself out to prove something - and is on the way to succeeding, if that is a threat to you all have the decency to say so to his face, don't dress it all in petty jealousies, remarks, abuse. . .

He is not on the way to succeeding in proving his hypothesis.

The "proof" he is supplying in no way serves to prove his hypothesis. That is my only point. I have clearly stated I am happy to be convinced either way about his hypothesis. I simply expect him to provide proof as that is what he claims to be doing.

Unfortunately I have yet to see any proof that the edge he is displaying is intrinsic to or specific to the writing of options.

cheers,
PKFFW

 

[stoic]

PKFFW,

I agree with you, but let the man have the benefit of the doubt, just let him finish what he started, and respect his wishes.

What bothers me is that the newbies reading this thread will think that writing naked Puts is money for old rope, but it's not. Risk has a value, and the writer is being paid to undertake that risk by the buyer.

Trust me when I say it isn't a one-way street.

Socrates didn't say anything about anyone following his advice, he stated quite clearly the purpose of this thread. If other people take advantage of it and read things into it that is not there, then that's their problem

 

[roguetrader]

I am not big on options, I use them from time to time and I have always been a buyer when I have seen occasion to use them. My own personal opinion would have been that the writer has an edge generally speaking, for the simple reason (as others have already stated) that the underlying can rise, fall, or stay more or less the same (trade sideways)

Since the subject of this thread has been puts, that would mean that the put writer will benefit if the underlying rises, if the underlying trades sideways, and even if it moves down, provided it does not move too far through his strike.

The only thing that worries me about this, is that it appears blindingly obvious, without any great research or study, and it has often been my experience that anything that seems blindingly obvious in the markets with no work, study, research, has a nasty habit of turning out to be quite different in reality. I suspect there is a lot more than meets the eye.

This thread hasn't changed my views, although it hasn't I'm afraid added to them. Proving such a hypothesis would be a far more complicated process than successfully executing a series of profitable trades. One has to consider that while Socrates has been profitably writing his puts "to prove writers have an edge" someone else has been writing calls, I presume with somewhat less success.
What has been displayed here may simply be a nice piece of trading that has nothing to do with a "writing edge"

For those that are interested in trying to work out if there really is an edge, I came across this whilst doing some reading on the subject.
http://1option.com/index.php/global/comments/all_options_were_meant_to_be_sold_not/
and this
http://www.esignallearning.com/education/marketmaster/archive/1205/121605.asp

 

[PKFFW]

PKFFW,

I agree with you, but let the man have the benefit of the doubt, just let him finish what he started, and respect his wishes.

Socrates didn't say anything about anyone following his advice, he stated quite clearly the purpose of this thread. If other people take advantage of it and read things into it that is not there, then that's their problem

That is my point. There is no benefit of the doubt to be given. Proof is proof or it is not. Posting profitable trades admittedly does show an edge. It does not show an edge that is specific to the writing of options. Hence this thread does not prove the hypothesis as Socrates claims it does.

As for following advice and reading things into the thread that are not there, I did not comment on that at all. I have confined all my comments to the fact that what Socrates claims(that these trades prove an inherent edge to writing) is simply not true.

Cheers,
PKFFW

 

[Profitaker]

Thought I'd have a quick look to see how the Apr07 6475 Calls are doing.

Some may remember when the numpty was selling Apr 5925 Puts, I noted the price of the Apr 6475 Calls - they were 46. Those calls are now trading at 78 bid.

Comments ?

http://www.trade2win.com/boards/showthread.php?p=304576&highlight=Apr07#post304576
Post #177

 

[Jack o'Clubs]

I originally went with perceived wisdom and voted 'W' for writers edge - but the more I think about it and the more I see on this thread, the more I am sure neither side has an edge. The edge is with the trader who can correctly use either strategy at the right time.

In the end, the final thing that changed my mind was simple economics: supply and demand. If writing had an intrinsic edge then every institution in the world would be writing options. To get those options sold, eventually whatever edge, or premium, there is would be competed, or arbitraged, away, until no edge existed: ergo there is no edge.

 

[Profitaker]

JoC

It's nice to read your clear reasoned thinking.

I should add, that if buyers had the edge then every man and his dog would be buying options until the edge no longer existed. The market makes sure that nobody has the edge.

The bid and the ask price of any option is where the option buyer and seller are happy to exchange risk.

 

[Glenn]

Thought I'd have a quick look to see how the Apr07 6475 Calls are doing.

Some may remember when the numpty was selling Apr 5925 Puts, I noted the price of the Apr 6475 Calls - they were 46. Those calls are now trading at 78 bid.

Comments ?

http://www.trade2win.com/boards/showthread.php?p=304576&highlight=Apr07#post304576
Post #177

Well that's the whole point really isn't it. It's no good having a race between two when you only watch one of them. Likewise it's no good deciding that the race has ended at random points in it's progress. Is it a 100 metre race or a mile race, or what ?
To be fair it is also true that some of the positions already closed would have made more profit if left open longer. Whether this constitites snatching a profit to make a point, or trading mastery is left to the observer to wonder. If you constantly read the market as bullish, does it make sense to close existing positions at partial profit and open new ones ? If so, what is the rationale ?

The underlying principle being relied on here is that we are in a bull market, so writing puts at pullbacks will work fine, and have worked fine for a long time if you look at the ftse chart. What is not discussed or compared is what happens when the bear arrives, either slowly or quickly. It is this part of the equation which quantifies the risk being undertaken and which is missing from the overall picture.
And as you point out the comparison with buying calls is not made. Neither is the amount of margin capital tied up to facilitate the writing. Unless you have unlimited capital in your margin account, or at least pledged to it from elsewhere, you are limited in how many positions you can have open at any one time. Less so with buying because there is no margin to cover..

Whover is making the calls has probably had a very good run for some time and is therefore feeling extremely cocky about doing this exercise and publically giving away what he believes is an edge. An ego thing perhaps ? Who knows.

Glenn

 

[Splitlink]

I am not big on options, I use them from time to time and I have always been a buyer when I have seen occasion to use them. My own personal opinion would have been that the writer has an edge generally speaking, for the simple reason (as others have already stated) that the underlying can rise, fall, or stay more or less the same (trade sideways)

Since the subject of this thread has been puts, that would mean that the put writer will benefit if the underlying rises, if the underlying trades sideways, and even if it moves down, provided it does not move too far through his strike.

The only thing that worries me about this, is that it appears blindingly obvious, without any great research or study, and it has often been my experience that anything that seems blindingly obvious in the markets with no work, study, research, has a nasty habit of turning out to be quite different in reality. I suspect there is a lot more than meets the eye.

This thread hasn't changed my views, although it hasn't I'm afraid added to them. Proving such a hypothesis would be a far more complicated process than successfully executing a series of profitable trades. One has to consider that while Socrates has been profitably writing his puts "to prove writers have an edge" someone else has been writing calls, I presume with somewhat less success.
What has been displayed here may simply be a nice piece of trading that has nothing to do with a "writing edge"

For those that are interested in trying to work out if there really is an edge, I came across this whilst doing some reading on the subject.
http://1option.com/index.php/global/comments/all_options_were_meant_to_be_sold_not/
and this
http://www.esignallearning.com/education/marketmaster/archive/1205/121605.asp

I'm not big on options, either, and am inclined to be skeptical about using indices as a vehicle for trading them. Maybe, they can be used for hedging a portfolio of shares that are difficult to write, by themselves, perhaps, but I don't think that most people think of trading them as a hedge against shares that they, actually, hold.

Covered writing is another argument, though. Someone who has held a portfolio of FTSE100 shares will, probably be showing good profits. If he does not want to sell these shares but thinks that they have come off the boil for a while,why not write them? He will sell them ,if exercised, for a good profit and pocket the premium. This was the original reason for options. That has been overtaken by the introduction if index options which, it appears to me, is a bit of a casino.

Split

 

[new_trader]

JoC

It's nice to read your clear reasoned thinking.

I should add, that if buyers had the edge then every man and his dog would be buying options until the edge no longer existed. The market makes sure that nobody has the edge.

The bid and the ask price of any option is where the option buyer and seller are happy to exchange risk.

Profitaker,

Isn't the point that Socrates is making is that it's all about methodology? Intuitively what you are saying makes sense. But then again, if you could make money writing poetry then every man and his dog would be doing it, wouldn’t they?

Socrates appears to be doing what many people here are claiming is impossible, what am I missing?

 

[SOCRATES]

Announcement:~
############

Trade 18 ready to scalp...

 

[the blades]

Profitaker,

Isn't the point that Socrates is making is that it's all about methodology? Intuitively what you are saying makes sense. But then again, if you could make money writing poetry then every man and his dog would be doing it, wouldn’t they?

Socrates appears to be doing what many people here are claiming is impossible, what am I missing?

I think the point is that say I made buy calls on 10 shares and they all gave positive returns - does it prove I have an inherent edge because I'm a buyer, or that I myself am good at picking stocks (or maybe that the market is rising and any mug with a copy of the financial times and a dart could do it, also)?


Cheers,
UTB

 

[SOCRATES]

Trade 18
#######

Filled 3 X May 6125 Puts 6725 @ 79 (3 X 10 X 10 ) = £ 300 Profit banked....... The Writer Wins Yet Again......Buyers Lose Again......Dear Oh Dear... Oh Dear !

Showing live this minute....have a look on your screens. Those are the facts. I have no time to engage in tit for tat argument with any of you. I am far 2 bizzi. Thank you........... RC nice to hear from you, call me in 10.

 

[new_trader]

I think the point is that say I made buy calls on 10 shares and they all gave positive returns - does it prove I have an inherent edge because I'm a buyer, or that I myself am good at picking stocks (or maybe that the market is rising and any mug with a copy of the financial times and a dart could do it, also)?


Cheers,
UTB

It could mean any or all. But if you consitently made profits because you believe and proclaim that "Doing X gives you an edge over doing Y" then I would be inclined to believe that indeed, doing X gives you an edge.

 

[SOCRATES]

It could mean any or all. But if you consitently made profits because you believe and proclaim that "Doing X gives you an edge over doing Y" then I would be inclined to believe that indeed, doing X gives you an edge.

Very quick because I am verri bizzi. Consider each of the writes are different expirires with diffenent stikes and 9 of the 20 have been profitable...and there are 11 to go, incidentally are also profitable........ ........This is not like chosing ten shares at all, but something veri different because the positions are all of them in the same instrument........ ..... The ultimate outcome is decided in advance of the event. Everything is decided in advance, everything....:cheesy:

 

[the blades]

Very quick because I am verri bizzi. Consider each of the writes are different expirires with diffenent stikes and 9 of the 20 have been profitable...and there are 11 to go...This is not like chosing ten shares at all, but something veri different. The ultimate outcome is decided in advance of the event.

but your refusal to explain why (I don't blame you for that, but...) renders the initial aim of the thread pointless, surely. Otherwise it's exactly the same as picking 10 shares...no? (edit - perhaps your subsequent edit addresses this, but I'm not at all convinced - I will now bug out and leave it to people who have a clue about options )

UTB