Plain Vanilla Options Trades.

[SOCRATES]

That is not what he set out to do though CYOF and you know it.

He set out to prove there is some inherent edge that is specific to writing options over buying them.

His trades have not proven this hypothesis in the least. They have proven, as you say, that he is able to take money from put buyers. That is all they have proven.

Cheers,
PKFFW

Not exactly. As it happens you view all this through a sort of fog This is the fog that prevents the herd from progressing and for many people who aspire to properly develop. This is the fog that has been discussed many times and qualifies the public as "The Goat". These are not my words, I am repeating the comments made by an expert trader at the turn of the century, whose viewpoints in general terms are not in contradiction to mine, that's all.

 

[SOCRATES]

That's better! I just thought that you were getting a little too friendly, just because I agree with you from time to time

He He .... you should be so lucky...

 

[CYOF]

Good post. Lloyds 'names' are an excellent analogy for 'amateur' option writers.

Wait now, think about this:

The investors of Lloyd's "names" scheme and the company did NOT know the following:

1. The managers were Not Been Truthful and honest with their clients.

2. That the managers did NOT have a HEDGE in place.

3. That the managers were operating a legal SCAM similar to that at ENRON.

4. The investors themselves did Not Know what their R/R was until it was too late.

5. The investors did not know what they agreed to when they signed up the forms.

6. Lloyd's Clients should have looked inside the Platinum Lounge first and learned how to use the weapons against such events as Black swans, scams, hedging etc

Knowledge, information and WISDOM are the KEYS to successful trading -I think - and it just so happens that The Master Trader, the one whi is related to the JCB, the one with the big box of bananas and the 1,000,000 Kg bag of peanuts, thinks exactly like I do.

Oh, BUT wait now, what is that old saying:

"Birds of a feather flock together"

My oh my, to think that this actually works in the real world of trading, for both GOOD and BAD trading, now that is an original thought, is it not :idea:

 

[CYOF]

Quote:
Originally Posted by PKFFW
That is not what he set out to do though CYOF and you know it.

He set out to prove there is some inherent edge that is specific to writing options over buying them.

His trades have not proven this hypothesis in the least. They have proven, as you say, that he is able to take money from put buyers. That is all they have proven.

Cheers,
PKFFW

Oh, let me use the little spong mass between my ears, one second please.

To take money from the PUT BUYERS means that the PUT BUYER looses - NO?

This means that the PUT WRITER WINS - NO?

How many of the trades done are winners - ALL TO DATE - NO?

Now, that was not TOO hard, was it

Let me add:

I'll try to make it a bit simpler for you to grasp what is the obvious.

The Bookies and Casinos OPEN THEIR DOORS TO LET IN THE PUNTERS WHO HAVE
POCKETS FILLED WITH CASH.

Now these punters are called the PAYERS and also called the PLAYERS. :idea:

The CASINO and the BOOKIES are known as the "HOUSE" or the "RECEIVERS" :idea:

These "HOUSES" make it a habit to make profit from the "PLAYERS" also known as the "PAYERS" :idea:


Each year these "HOUSES" show HUGE profits!

Some Questions for you ALL:

A. Who makes consistent yearly profit?

1. The "HOUSE" ie the RECEIVERS

OR

2. The PLAYERS ie the PAYERS.

B. Who has the edge over the other?

If you conclude that neither has the edge, then it means that the PLAYERS, or PAYERS, will break even at the end of each year and the HOUSE also breaks EVEN!

This would send the "HOUSE" into bankruptcy, would it not?

 

[the blades]

Oh, let me use the little spong mass between my ears, one second please.

To take money from the PUT BUYERS means that the PUT BUYER looses - NO?

This means that the PUT WRITER WINS - NO?

How many of the trades done are winners - ALL TO DATE - NO?

Now, that was not TOO hard, was it

actually, you'd be better removing your nose from where the sun doesn't shine and thinking about what PKFFW wrote. On second thoughts......

UTB

 

[Crap Buddist]

Quote:
Originally Posted by PKFFW
That is not what he set out to do though CYOF and you know it.

He set out to prove there is some inherent edge that is specific to writing options over buying them.

His trades have not proven this hypothesis in the least. They have proven, as you say, that he is able to take money from put buyers. That is all they have proven.

Cheers,
PKFFW



Let me add:

I'll try to make it a bit simpler for you to grasp what is the obvious.

The Bookies and Casinos OPEN THEIR DOORS TO LET IN THE PUNTERS WHO HAVE
POCKETS FILLED WITH CASH.

Now these punters are called the PAYERS and also called the PLAYERS. :idea:

The CASINO and the BOOKIES are known as the "HOUSE" or the "RECEIVERS" :idea:

These "HOUSES" make it a habit to make profit from the "PLAYERS" also known as the "PAYERS" :idea:


Each year these "HOUSES" show HUGE profits!

Some Questions for you ALL:

A. Who makes consistent yearly profit?

1. The "HOUSE" ie the RECEIVERS

OR

2. The PLAYERS ie the PAYERS.

B. Who has the edge over the other?

If you conclude that neither has the edge, then it means that the PLAYERS, or PAYERS, will break even at the end of each year and the HOUSE also breaks EVEN!

This would send the "HOUSE" into bankruptcy, would it not?

Yeah but what about all those M.I.T students who have been banned globally as players because they took millions from the Casinos on the Black Jack tables?

They used a scientific edge ? not a subjective one? I mean when the deck was anticipated to be a good probability to bet heavy against the house etc.

Then the wrotten casinos (bookies) banned them

Hence they went to focus on the Financial markets as their next arena to milk I think. ? You wont get banned in that casino?

 

[zupcon]

The Bookies and Casinos OPEN THEIR DOORS TO LET IN THE PUNTERS WHO HAVE
POCKETS FILLED WITH CASH.

Now these punters are called the PAYERS and also called the PLAYERS. :idea:

The CASINO and the BOOKIES are known as the "HOUSE" or the "RECEIVERS" :idea:

These "HOUSES" make it a habit to make profit from the "PLAYERS" also known as the "PAYERS" :idea:


Each year these "HOUSES" show HUGE profits!

Some Questions for you ALL:

A. Who makes consistent yearly profit?

1. The "HOUSE" ie the RECEIVERS

OR

2. The PLAYERS ie the PAYERS.

B. Who has the edge over the other?

If you conclude that neither has the edge, then it means that the PLAYERS, or PAYERS, will break even at the end of each year and the HOUSE also breaks EVEN!

This would send the "HOUSE" into bankruptcy, would it not?

(most) games played withing the casino's are designed to have an edge, that edge is very clear, very easy to identify, and very easily explained. Most 8 year olds would understand the mathematics involved. The casinos are operating in an environment where everyone participates in a game of chance, and they have the edge.

You however are participatiing in a game that has NO inherent edge, for either party. Furthermore you are participating in something that is in no way remotely like a game of chance, and this is why, either party, buyer or writer can achieve consistant profitability, once the rules of the game are understood.

now, what bit dont you understand, Im sure someone can help you if you ask nicely.

regards
zu

 

[SOCRATES]

actually, you'd be better removing your nose from where the sun doesn't shine and thinking about what PKFFW wrote. On second thoughts......

UTB

You are pointedly rude, aren't you ? What is worse is that you seem to view your failings as a virtue.

 

[the blades]

You are pointedly rude, aren't you ? What is worse is that you seem to view your failings as a virtue.

yes, that was rude but effortlessly to the point. Why yourself and CYOF make such hard work of it is beyond me. Mind, you have a post count to consider.

UTB

 

[SOCRATES]

yes, that was rude but effortlessly to the point. Why yourself and CYOF make such hard work of it is beyond me. Mind, you have a post count to consider.

UTB

It is beyond you as it is beyond several others because it does not dawn on you that you do not understand that you do not understand, that's why. But you cannot complain that I do not tell you everything. You are not exceptional, because you are the norm..

 

[the blades]

It is beyond you as it is beyond several others because it does not dawn on you that you do not understand that you do not understand, that's why. But you cannot complain that I do not tell you everything. You are not exceptional, because you are the norm..

Socrates, your arrogance surely doesn't extend to phsycic knowledge of the way I operate?

UTB

Edit - now, If I were to start making references to my exclusive club of elite traders, available on interest free credit for £400, then I'd be approaching the "norm", eh?

 

[SOCRATES]

Socrates, your arrogance surely doesn't extend to phsycic knowledge of the way I operate?

UTB

Edit - now, If I were to start making references to my exclusive club of elite traders, available on interest free credit for £400, then I'd be approaching the "norm", eh?

I cannot help you, sorry.

 

[charliechan]

It is exaclty equal, evidently, because for every option seller there must be.....a buyer.

eh?

i'd rethink that one.

 

[Profitaker]

eh?

i'd rethink that one.

Ok, be my guest and re-think it.

After you have re-thunk it, perhaps you'll come back with something less vague / more specific ?

 

[PKFFW]

Oh, let me use the little spong mass between my ears, one second please.

To take money from the PUT BUYERS means that the PUT BUYER looses - NO?

This means that the PUT WRITER WINS - NO?

How many of the trades done are winners - ALL TO DATE - NO?

Now, that was not TOO hard, was it

And that proves what CYOF? You and Soc are truly masters. Masters at avoiding the issue at hand that is. You both continually claim the same thing over and over and over without giving any reasonable explanation for your claims. Any time anyone questions your logic you simply repeat your mantra over again. This is supposed to be an example of your vaunted correct thinking abilities?

You are seeing a causal relationship where there isn't any.

Profitable trades merely proves that the maker of those trades has an edge. It does not prove that the instrument used has an edge in and of itself. To prove that you need to eliminate all the variables and focus on the one variable of the instrument.

Socrates claims over and over that he knows the outcome in advance, he has absolute knowledge, etc etc. If(and that is a huge if) this is the case he will be able to make any number of profitable trades in a row using any method he chooses, be it writing or buying options. So the posting of these trades can not and does not serve as proof of his stated claim.

Now as I have said many times before, I am happy to be shown proof of what Socrates claims. I don't know the answer one way or the other. However, to claim you are showing proof of something when you are clearly showing proof of something else entirely is simply being argumentative and ridiculous for the sake of it.

Cheers,
PKFFW

 

[PKFFW]

Not exactly. As it happens you view all this through a sort of fog This is the fog that prevents the herd from progressing and for many people who aspire to properly develop. This is the fog that has been discussed many times and qualifies the public as "The Goat". These are not my words, I am repeating the comments made by an expert trader at the turn of the century, whose viewpoints in general terms are not in contradiction to mine, that's all.

Firstly who cares if some expert trader holds the same views as you? Really, how does claiming someone you wont even name agrees with you strengthen your argument?

Secondly, your entire reply once again doesn't address the point in question. You once again go off on a tangent claiming you are right and I am wrong without giving any reasons.

You seem to mistake your experience in trading with experience in everything. Yet you clearly have no experience whatsoever in the scientific method. "He who knows that he knows not is truly wise". Unfortunately for you, you do not know that you do not know.

You are claiming to show proof of something when you are showing proof of something else entirely. Regardless of how many different ways you try to say "I am right and you are wrong even though I can't come up with a single reason why" doesn't change that.

Now come on, I'm happy to be shown real proof of what you claim. Can you come up with any?

Cheers,
PKFFW

 

[stoic]

(most) games played withing the casino's are designed to have an edge, that edge is very clear, very easy to identify, and very easily explained. Most 8 year olds would understand the mathematics involved. The casinos are operating in an environment where everyone participates in a game of chance, and they have the edge.

You however are participatiing in a game that has NO inherent edge, for either party. Furthermore you are participating in something that is in no way remotely like a game of chance, and this is why, either party, buyer or writer can achieve consistant profitability, once the rules of the game are understood.

now, what bit dont you understand, Im sure someone can help you if you ask nicely.

regards
zu

casinos and the bookies have the edge because of their vast hordes of reserves. Basically if you take the probablistic assumption (and I take it that's what most sensible people take) we are talking about symmetric random walks. As you know, a random walk in 1 and 2 dimensions you will always, with probability one, end up where you initially started, or a certain absorbing state (read bankrupcy), how you get there is another matter and that's to do with hitting times (stochastics etc. . . ), we could talk about the law of large numbers and other such stuff but this is not the place for it.

Anyway, most casino owners don't need to know the above in order to realise that running a casino is a profitable enterprise, since others have done it and they take their cue from that

 

[zupcon]

casinos and the bookies have the edge because of their vast hordes of reserves.

Reserves certainly help but its not the edge. The games have a clear edge in the houses favour. In some cases, for example slots, the casinos can even alter the edge to any payout level they wish (within regulated guidelines), They even use this as a marketing ploy setting a higher payout on machines in public area's to higher levels.

Its a fallicy that people can make money simply through money management, it is not possible without an edge. If you dont know what the edge is, then you havnt got one.

regards
zu

 

[stoic]

Reserves certainly help but its not the edge. The games have a clear edge in the houses favour. In some cases, for example slots, the casinos can even alter the edge to any payout level they wish (within regulated guidelines), They even use this as a marketing ploy setting a higher payout on machines in public area's to higher levels.

Its a fallicy that people can make money simply through money management, it is not possible without an edge. If you dont know what the edge is, then you havnt got one.

regards
zu

my point was that even though a game is fair it is still probabalistically in the house's favour was the starting point for the casinos and bookies to exploit it, and add extra things to their advantage from there.

Actually it is not a fallacy that people can make money from simple money management - it's just that it can't be sustainable in the long run. You could get "lucky" in a string of good wins and think that that is the general picture, so to say, and then comes a, ahem, "black swan" to screw you up.

The interesting thing about random sequences is that no matter how clever you are, there is no edge to be had, for this reason it is impossible to trade a sequence of random coin tosses profitably . We can actually take that as a definition of what consistuite a random sequence. From this alone we can deduce that since there are traders that are consistently profitable, the markets are not random

 

[robq]

"The interesting thing about random sequences is that no matter how clever you are, there is no edge to be had, for this reason it is impossible to trade a sequence of random coin tosses profitably . We can actually take that as a definition of what consistuite a random sequence. From this alone we can deduce that since there are traders that are consistently profitable, the markets are not random"

Stoic, If the markets are random and if you studied a large enough sample of traders for any particular time period (not infinite) would you not expect that some trader(s) would appear to be consistently profitable during that time?