Best Thread The Options edge (Writing Vs Buying)
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CYOF
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dbphoenix said:
Aha, welcome my dear fellow. I thought you would be here sooner, but do not worry, for we are here to help all.
You are welcome to read the basics at the bottom of each of my posts, but you may have to copy and paste them in to your browser, for the hyperlinks do not appear to be working in the signature section.
You can PM me if you require any personal tuition in realtion to Options - for you are not a bad fellow really, and I am a firm believer in HOW TO EDUCATE CORRECTLY, as well as HOW TO THINK CORRECTLY :cheesy:
Have a nice evening.
Regards,
frugi
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Okay here is a real life example. First of all I should point out I am an options noob and the prudence of this trade is highly questionable.
I have a bear call spread open on the DJX (Dow). I am moderately bearish on the Dow.
I am long 10 Mar 130 calls and short 10 Mar 128 calls for a credit of 0.61 per contract after costs.
So I don't expect it to get much above 12800 in the next two months or, more importantly, still be above when they are over.
Let us assume I opened it today.
I used this simple calculator to establish the risk and reward (see image).
Assuming I run to expiry with no hedging, my monetary R:R is 2.28 : 1, i.e risking a max of $1390 for a potential reward of $610. This represents a return on capital (or strictly, margin?) of 44%.
There are approx. 60 days until expiry. The options are Euro style so I have no risk of assignment before expiry (i.e. someone exercising the calls I have sold, which would mean I would end up short a block of stock. This is a risk with American style options, though presumably only if they're in the money.)
Next I used this simple probabilty calculator to determine the likelyhood of the DJX being above my breakeven price at expiry, i.e 128.61. (NB not exceeding it at any time during the life of the trade, just after 60 days. There is another more complex calculator for the former.)
Anyway, based on DIA (proxy for DJX) historical volatility of 0.10 (this figure may be out of date) it says I have a 29.2% chance of exceeding b/e point, i.e a 70.8% chance of not losing any money.
Furthermore I have a 66.6% chance of it being below 128. Below 128 I keep all the profit.
And a 20.8% chance of it being above 130. Above 130 I suffer the maximum loss.
> How do I determine the expectancy of this trade, assuming it goes to expiry with no hedging?
I can state PWin x avWin - PLoss x avLoss as (66.6% x $610) - (20.8% x $1390) = $117.14 which is thankfully positive, but this doesn't take account of the area between 128 and 130 where the profit becomes a growing loss if you like. And if options are priced efficiently shouldn't the expectancy be zero? Perhaps it is impossible to calculate expectancy. Also expectancy calculations are generally run over a series of completed trades not a single open one. Methinks I am trying to use the wrong tool 'ere.
> Is the probabilty calculator sound? It seems a bit simplistic to me to just bung in a couple of prices and an annual volatility figure and get a handy percentage. I guess if volatilty suddenly changes while the trade is open one has to recalculate the probabilites, indeed best of all would be to continually recalculate say every day and adjust the strategy as necessary. Perhaps this is where implied volatility comes in.
> Where can I find up to date information on annual volatility figures?
> Are credit spreads affected much by sudden changes in volatility? Simplistically I would have thought not much since one holds a matched opposite postion thus both legs will be affected nearly equally. Though of course the probabilty of certain price moves will change.
> Would a professional option trader have taken this trade?
I suspect not as the breakeven point is dangerously close to the current price.
Also 60 days is probably too long for comfort.
However the potential payoff as a ROC % is large to account for this. This is, if I'm honest a punt.
(But I am also long some DIA stock ... though let's not muddy the waters with that just now!)
> What would my alternatives have been? A couple ...
Long puts - if I was more bearish and expected a pickup in volatility.
Short naked calls - Don't like the unlimited risk. We are in a bull market until proven otherwise and a run to 13k is entirely possible. That would hurt, especially as I am unsure of how to hedge safely and efficiently.
> Finally I need a hedging strategy as I don't fancy taking the full loss. If price exceeds my b/e point in the first 30 days I could, say, partially hedge the trade by going long a few Mar DIA 128 or 129 calls. If these expire worthless I cut my profit but if the Dow flies I also pare my loss. What flogs my head is that there is almost unlimited scope to tinker with the open position, adding more legs, wings or perhaps simply taking some of the existing one off. But as I have a certain amount I am prepared to lose if the trade starts going against me I can plug in a few ways of achieving this. What I don't know is the most efficient way to go about it, but I'm not expecting anyone to reveal this ... it is something I must research. Sorry so many irksome questions.
I follow a credit spread thread on ET and a guy there, Phil Budwick, seems to do well by going miles out of the money, risking say 80 to make 5, but of course the probabilty of his losing the whole 80 is usually tiny and he has a complex hedging strategy, which must be vital if one is consistently stealing nickels from under a sleeping steamroller. He's yet to greet a black swan on the thread and it would interesting to see how his hedging strategies would cope if the market moved suddenly and a long way against him.
What I find interesting (and somewhat predictable) is the more chance there is of a full profit, the smaller it becomes, i.e the R:R ratio becomes ever heavier at the risk end. No free lunches here guv.
Options are a frightening field but I am keen to start using them as part of a longer term income strategy. Clearly I have a LOT of learning to do first. I like the idea of credit spreads because the risk is known in advance, unlike say naked writing. This makes margining simple. In addition, time value is on my side so my timing doesn't have to be as spot on as it would with simply buying puts or calls. But the maths is confusing and I haven't even touched on the Greeks yet. Cripes.
IB has some useful tools in its Portfolio Analytics window. One can plug in various option combinations and see the effect of price moves on one's portfolio, though I haven't found a way to display the outcome at expiry, only current conditions. An image below shows the current state of my spread.
Also I learned one can enter a spread in one go instead of selling one leg and buying the other separately. Yep told ya I was a noob
. The trick seems to be to split the bid/ask i.e place a bid or offer for the desired single combo trade between the current bid / ask and hope a market maker takes pity and fills me, which in this case he did. He likes round lots too apparently. With a bear spread the numbers are negative which makes it quite confusing at first. Finally use SMART routing or end up paying $1.75 per contract instead of $1.
There's a bit to discuss there, at least for us beginners! Old hands feel free to rip my wee spread to shreds or ignore it completely.
Here is a link to a simple spread tutorial which I found useful. Though they call it "Advanced" which is oddly pleasing. Sorry for such a long, naive and turgid post. I hope that as well as boring everyone to tears it may also help defuse the ongoing unpleasant situation.
http://oic.theocc.com/classes/syllabus_intro_to_spreading.jsp
I have a bear call spread open on the DJX (Dow). I am moderately bearish on the Dow.
I am long 10 Mar 130 calls and short 10 Mar 128 calls for a credit of 0.61 per contract after costs.
So I don't expect it to get much above 12800 in the next two months or, more importantly, still be above when they are over.
Let us assume I opened it today.
I used this simple calculator to establish the risk and reward (see image).
Assuming I run to expiry with no hedging, my monetary R:R is 2.28 : 1, i.e risking a max of $1390 for a potential reward of $610. This represents a return on capital (or strictly, margin?) of 44%.
There are approx. 60 days until expiry. The options are Euro style so I have no risk of assignment before expiry (i.e. someone exercising the calls I have sold, which would mean I would end up short a block of stock. This is a risk with American style options, though presumably only if they're in the money.)
Next I used this simple probabilty calculator to determine the likelyhood of the DJX being above my breakeven price at expiry, i.e 128.61. (NB not exceeding it at any time during the life of the trade, just after 60 days. There is another more complex calculator for the former.)
Anyway, based on DIA (proxy for DJX) historical volatility of 0.10 (this figure may be out of date) it says I have a 29.2% chance of exceeding b/e point, i.e a 70.8% chance of not losing any money.
Furthermore I have a 66.6% chance of it being below 128. Below 128 I keep all the profit.
And a 20.8% chance of it being above 130. Above 130 I suffer the maximum loss.
> How do I determine the expectancy of this trade, assuming it goes to expiry with no hedging?
I can state PWin x avWin - PLoss x avLoss as (66.6% x $610) - (20.8% x $1390) = $117.14 which is thankfully positive, but this doesn't take account of the area between 128 and 130 where the profit becomes a growing loss if you like. And if options are priced efficiently shouldn't the expectancy be zero? Perhaps it is impossible to calculate expectancy. Also expectancy calculations are generally run over a series of completed trades not a single open one. Methinks I am trying to use the wrong tool 'ere.
> Is the probabilty calculator sound? It seems a bit simplistic to me to just bung in a couple of prices and an annual volatility figure and get a handy percentage. I guess if volatilty suddenly changes while the trade is open one has to recalculate the probabilites, indeed best of all would be to continually recalculate say every day and adjust the strategy as necessary. Perhaps this is where implied volatility comes in.
> Where can I find up to date information on annual volatility figures?
> Are credit spreads affected much by sudden changes in volatility? Simplistically I would have thought not much since one holds a matched opposite postion thus both legs will be affected nearly equally. Though of course the probabilty of certain price moves will change.
> Would a professional option trader have taken this trade?
I suspect not as the breakeven point is dangerously close to the current price.
Also 60 days is probably too long for comfort.
However the potential payoff as a ROC % is large to account for this. This is, if I'm honest a punt.
(But I am also long some DIA stock ... though let's not muddy the waters with that just now!)
> What would my alternatives have been? A couple ...
Long puts - if I was more bearish and expected a pickup in volatility.
Short naked calls - Don't like the unlimited risk. We are in a bull market until proven otherwise and a run to 13k is entirely possible. That would hurt, especially as I am unsure of how to hedge safely and efficiently.
> Finally I need a hedging strategy as I don't fancy taking the full loss. If price exceeds my b/e point in the first 30 days I could, say, partially hedge the trade by going long a few Mar DIA 128 or 129 calls. If these expire worthless I cut my profit but if the Dow flies I also pare my loss. What flogs my head is that there is almost unlimited scope to tinker with the open position, adding more legs, wings or perhaps simply taking some of the existing one off. But as I have a certain amount I am prepared to lose if the trade starts going against me I can plug in a few ways of achieving this. What I don't know is the most efficient way to go about it, but I'm not expecting anyone to reveal this ... it is something I must research. Sorry so many irksome questions.
I follow a credit spread thread on ET and a guy there, Phil Budwick, seems to do well by going miles out of the money, risking say 80 to make 5, but of course the probabilty of his losing the whole 80 is usually tiny and he has a complex hedging strategy, which must be vital if one is consistently stealing nickels from under a sleeping steamroller. He's yet to greet a black swan on the thread and it would interesting to see how his hedging strategies would cope if the market moved suddenly and a long way against him.
What I find interesting (and somewhat predictable) is the more chance there is of a full profit, the smaller it becomes, i.e the R:R ratio becomes ever heavier at the risk end. No free lunches here guv.
Options are a frightening field but I am keen to start using them as part of a longer term income strategy. Clearly I have a LOT of learning to do first. I like the idea of credit spreads because the risk is known in advance, unlike say naked writing. This makes margining simple. In addition, time value is on my side so my timing doesn't have to be as spot on as it would with simply buying puts or calls. But the maths is confusing and I haven't even touched on the Greeks yet. Cripes.
IB has some useful tools in its Portfolio Analytics window. One can plug in various option combinations and see the effect of price moves on one's portfolio, though I haven't found a way to display the outcome at expiry, only current conditions. An image below shows the current state of my spread.
Also I learned one can enter a spread in one go instead of selling one leg and buying the other separately. Yep told ya I was a noob
. The trick seems to be to split the bid/ask i.e place a bid or offer for the desired single combo trade between the current bid / ask and hope a market maker takes pity and fills me, which in this case he did. He likes round lots too apparently. With a bear spread the numbers are negative which makes it quite confusing at first. Finally use SMART routing or end up paying $1.75 per contract instead of $1. There's a bit to discuss there, at least for us beginners! Old hands feel free to rip my wee spread to shreds or ignore it completely.
Here is a link to a simple spread tutorial which I found useful. Though they call it "Advanced" which is oddly pleasing. Sorry for such a long, naive and turgid post. I hope that as well as boring everyone to tears it may also help defuse the ongoing unpleasant situation.
http://oic.theocc.com/classes/syllabus_intro_to_spreading.jsp
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Socrates,
Thank you for the clarification re the club.
Your “bonfire” seems a bit extreme. Bonaventure(?) would be proud. However, I think you will agree that to break the rules, one must know the rules. Or at least know why you the rules can be legitimately ignored.
Grant.
Thank you for the clarification re the club.
Your “bonfire” seems a bit extreme. Bonaventure(?) would be proud. However, I think you will agree that to break the rules, one must know the rules. Or at least know why you the rules can be legitimately ignored.
Grant.
CYOF
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Good morning All,
For those who want to start off in the right direction for learning about trading options for REAL profits, I have now fixed all the links at the bottom of my signature.
Oh, and that reminds me, I have something very important to post after this, before we continue on with any more discussions.
The problem with the posting of the hyperlinks into the signature section were as follows:
A direct paste of a website address does not appear to work.
What you must do is as follows:
1. Click on insert hyperlink icon
2. Paste the web address into the little box that pops up at the top left of your screen
3. Click on OK in the pop up box.
4. Click on OK again to close the pop up box.
5 Go to your signature page and amend your new hyperlink as follows:
Before amending: I have coloured the parts to take out red. NOTE - you must leave the close brackets between the two red sections that are removed. Also, please note that I have had to put a space in the first and last brackets of the hyperlink, otherwise the brackets disappear when the post is submitted to the thread, and you are not able to see the brackets which I am explaining about.
[ URL=http://]http://www.trade2win.com/knowledge/articles/general_articles/the-cash-cow/?r[/URL ]
After amending:
[ URL=]www.trade2win.com/knowledge/articles/general_articles/the-cash-cow/?r[/URL ]
Presto: The links will now work.
Now, if anyone has a simpler solution please let us know - for I tried several direct posts in the signature section and they will just not work :?:
You can of course paste in the hyperlink, remove the http://, and then put in your URL brackets, but remember to put in your = and / signs for each bracketing - otherwise you will be fiddling around again and wasting your valuable time
Hope this is of help to someone.
Very important post to follow.
Regards,
For those who want to start off in the right direction for learning about trading options for REAL profits, I have now fixed all the links at the bottom of my signature.
Oh, and that reminds me, I have something very important to post after this, before we continue on with any more discussions.
The problem with the posting of the hyperlinks into the signature section were as follows:
A direct paste of a website address does not appear to work.
What you must do is as follows:
1. Click on insert hyperlink icon
2. Paste the web address into the little box that pops up at the top left of your screen
3. Click on OK in the pop up box.
4. Click on OK again to close the pop up box.
5 Go to your signature page and amend your new hyperlink as follows:
Before amending: I have coloured the parts to take out red. NOTE - you must leave the close brackets between the two red sections that are removed. Also, please note that I have had to put a space in the first and last brackets of the hyperlink, otherwise the brackets disappear when the post is submitted to the thread, and you are not able to see the brackets which I am explaining about.
[ URL=http://]http://www.trade2win.com/knowledge/articles/general_articles/the-cash-cow/?r[/URL ]
After amending:
[ URL=]www.trade2win.com/knowledge/articles/general_articles/the-cash-cow/?r[/URL ]
Presto: The links will now work.
Now, if anyone has a simpler solution please let us know - for I tried several direct posts in the signature section and they will just not work :?:
You can of course paste in the hyperlink, remove the http://, and then put in your URL brackets, but remember to put in your = and / signs for each bracketing - otherwise you will be fiddling around again and wasting your valuable time
Hope this is of help to someone.
Very important post to follow.
Regards,
Last edited:
Greetings people.
New member of the T2W forum here. Have been posting regularly on the Daily FX forum for the last couple of years but it's become very dead over there.
I trade mainly forex and futures on commodoties and Bunds.
Only been using options for the last 8 months or so, only on Forex and very much a novice with an an awfull lot still to learn.
I tend to just go with short dated 2-4 week OTM long strangles as a forward hedge which enables me to take opposing spot long or short trades closer to the strike prices without having to worry about stops, using the option as the mobile stop/hedge. European style so I can close out the loser early. I try to forward plan on the possible outside ranges within the next month on a currency pair and then wait to get the options at the best price.
If I do make money on the actual options that's great, but my pimary aim as I said is just to forward hedge a future spot position, and I mentally write off the premiums as cheaper than using stops
I occasionaly will write straddles/strangles if the market is just ranging.
Reading through the last couple of pages there seems to be a bit of a disturbed hornets nest here.
Anyway - hoping to be able to pick up some tips
New member of the T2W forum here. Have been posting regularly on the Daily FX forum for the last couple of years but it's become very dead over there.
I trade mainly forex and futures on commodoties and Bunds.
Only been using options for the last 8 months or so, only on Forex and very much a novice with an an awfull lot still to learn.
I tend to just go with short dated 2-4 week OTM long strangles as a forward hedge which enables me to take opposing spot long or short trades closer to the strike prices without having to worry about stops, using the option as the mobile stop/hedge. European style so I can close out the loser early. I try to forward plan on the possible outside ranges within the next month on a currency pair and then wait to get the options at the best price.
If I do make money on the actual options that's great, but my pimary aim as I said is just to forward hedge a future spot position, and I mentally write off the premiums as cheaper than using stops
I occasionaly will write straddles/strangles if the market is just ranging.
Reading through the last couple of pages there seems to be a bit of a disturbed hornets nest here.
Anyway - hoping to be able to pick up some tips
trendie
Legendary member
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CYOF,
thanks for posting the links, especially the first one, I hadnt seen that one before.
(Basics + Where The Balance of Power Lies.)
At last, some data that can potentially be verified independently, or at least monitored, without having to accept anything on faith.
The fact that 80% or so of options expire worthless is that same old percentage-wins chestnut.
If I gain premiums on 80 trades of 2 units - great.
But, if on the losing 20%, I lose 9 units, overall I am losing.
This issue that ducati, or DashingBlade raised, regarding Black Swan events, that could wipe out gains in a very short time, havent been addressed.
Admittedly, its all about "managing" positions, but that also needs addressing in a formal, mathematical manner.
Do you have any links for managing strategies, to counter the black swan events?
re:HIS FORUM HAS OVER 90% OF PERFECT AND ADVANCED TRADERS AND LESS THAN 2% OF MORONS !
If the morons are LESS THAN than 2%, you could confidently claim the perfect traders are OVER 98%?
( just being pedantic)
thanks for posting the links, especially the first one, I hadnt seen that one before.
(Basics + Where The Balance of Power Lies.)
At last, some data that can potentially be verified independently, or at least monitored, without having to accept anything on faith.
The fact that 80% or so of options expire worthless is that same old percentage-wins chestnut.
If I gain premiums on 80 trades of 2 units - great.
But, if on the losing 20%, I lose 9 units, overall I am losing.
This issue that ducati, or DashingBlade raised, regarding Black Swan events, that could wipe out gains in a very short time, havent been addressed.
Admittedly, its all about "managing" positions, but that also needs addressing in a formal, mathematical manner.
Do you have any links for managing strategies, to counter the black swan events?
re:HIS FORUM HAS OVER 90% OF PERFECT AND ADVANCED TRADERS AND LESS THAN 2% OF MORONS !
If the morons are LESS THAN than 2%, you could confidently claim the perfect traders are OVER 98%?
( just being pedantic)
CYOF
Experienced member
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Now, as I always try to do what I say I will do, here are two very important paragraphs.
Please print them out and stick them on the wall in front of your PC.
For, every time you are been TOLD by someone what is best for YOU, always remember that only one person really knows what is best for YOU.
When you realise this FACT, you will then start looking for TRUTHFUL information, and you will quickly begin to recognise information which is of LIMITED value.
Remember, if you do not THINK BIG, you will NEVER GET BIG.
But, if you continue to THINK SMALL, then you will ALWAYS GET SMALL.
The Laws are immutable, so stop banging you head against a brick wall, and open your eyes to the REAL TRUTH.
Do not let INTERFERERS get in your way, especially if you have BIG IDEAS, for they are the one thing that will keep you caught in this RAT RACE.
The choice is YOURS - always HAS BEEN and always WILL BE.
Make your choice wisely - and do your family, and future generations, a big favour.
Only You Can Know How You Feel About You
When you expect something, it is on the way. When you believe something, it is on the way. When you fear something, it is on the way. Your attitude or mood is always pointing toward what is coming, but you are never stuck with your current point of attraction. Just because you have picked up these thoughts, beliefs, attitudes, and moods along your physical trail does not mean that you have to continue attracting in response to them. You have creative control of your own experience. If there are things in your experience that you no longer wish to experience, your belief must change. If there are things that are not in your experience that you want to bring into your experience, your belief must change. There is no condition so severe that you cannot reverse it by choosing different thoughts. However, choosing different thoughts requires focus and practice. If you continue to focus as you have been, to think as you have been, and to believe as you have been, then nothing in your experience will change.
Others Cannot Understand Your Desires or Feelings
Others are often eager to guide you. There are endless people, with endless opinions, rules,
requirements, and suggestions for how you should live your life, but none of them are able to take into consideration the only thing that matters in achieving your desires: Others cannot understand the vibrational content of your desires, and they cannot understand the vibrational content of where you are, so they are not in any way equipped to guide you. Even when they have the very best of intentions and want your absolute Well-Being, they do not know. And even though many of them attempt to be unselfish, it is never possible for them to separate their desire for you from their own desire for themselves.
I am away now until Monday, so enjoy the weekend ALL.
Regards
Please print them out and stick them on the wall in front of your PC.
For, every time you are been TOLD by someone what is best for YOU, always remember that only one person really knows what is best for YOU.
When you realise this FACT, you will then start looking for TRUTHFUL information, and you will quickly begin to recognise information which is of LIMITED value.
Remember, if you do not THINK BIG, you will NEVER GET BIG.
But, if you continue to THINK SMALL, then you will ALWAYS GET SMALL.
The Laws are immutable, so stop banging you head against a brick wall, and open your eyes to the REAL TRUTH.
Do not let INTERFERERS get in your way, especially if you have BIG IDEAS, for they are the one thing that will keep you caught in this RAT RACE.
The choice is YOURS - always HAS BEEN and always WILL BE.
Make your choice wisely - and do your family, and future generations, a big favour.
Only You Can Know How You Feel About You
When you expect something, it is on the way. When you believe something, it is on the way. When you fear something, it is on the way. Your attitude or mood is always pointing toward what is coming, but you are never stuck with your current point of attraction. Just because you have picked up these thoughts, beliefs, attitudes, and moods along your physical trail does not mean that you have to continue attracting in response to them. You have creative control of your own experience. If there are things in your experience that you no longer wish to experience, your belief must change. If there are things that are not in your experience that you want to bring into your experience, your belief must change. There is no condition so severe that you cannot reverse it by choosing different thoughts. However, choosing different thoughts requires focus and practice. If you continue to focus as you have been, to think as you have been, and to believe as you have been, then nothing in your experience will change.
Others Cannot Understand Your Desires or Feelings
Others are often eager to guide you. There are endless people, with endless opinions, rules,
requirements, and suggestions for how you should live your life, but none of them are able to take into consideration the only thing that matters in achieving your desires: Others cannot understand the vibrational content of your desires, and they cannot understand the vibrational content of where you are, so they are not in any way equipped to guide you. Even when they have the very best of intentions and want your absolute Well-Being, they do not know. And even though many of them attempt to be unselfish, it is never possible for them to separate their desire for you from their own desire for themselves.
I am away now until Monday, so enjoy the weekend ALL.
Regards
Being the most recent member, perhaps a couple of days now, and following this thread, it is wonderful to eventually hear such wisdom about the 'law of attaction'. The pendululm swings in roundabouts, as ever. So tell me CYOF, is trading a science or is it an art? Perhaps the answer to this thread, (writing versus buying) is somewhat more philosophical than the occasional punter understands?
Besides all that BS; my own trading experience tells me that selling options for a premium is the only way to go. Iron Condors are a favourite, perhaps I'm just good at picking sideways markets; I don' t think so?
Enlighten me please,
Besides all that BS; my own trading experience tells me that selling options for a premium is the only way to go. Iron Condors are a favourite, perhaps I'm just good at picking sideways markets; I don' t think so?
Enlighten me please,
Profitaker
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Gamma scalping - can be profitable, but can be heavy in slippage and commissions. Out of interest, do you get good intra-day vol in forex and do you use a delta value to trigger the trade ?JohnG FX said:
Think that's the understatement of the year ! There are a very tiny minority of complete basket cases here, but unfortunately they have nothing better to do than post frequent diatribe and hope somebody bites (which they usually do).JohnG FX said:
Profitaker
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No, the answer is not philosophical, it's mathematical.penrithem said:
All the data necessary to categorically determine the writer/buyer debate is freely available, and it ain't that difficult run the calcs.
CYOF
Experienced member
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Yes - He May Well Be One
My my, we do have a lot of NEWBIES all of a sudden.
Now, let me see if I can work this out for myself, or will I need to call LouDean back from his holidays in Siberia - for he does indeed know the answers to everything. :cheesy:
Now pn, you must first engage in a dialogue, for like ION, you may have to do the honourable thing shortly.
Penrithem, and what do you consider the difference between Science and Art?
Please note: I really do have to go shortly, so do not despair, for I will be back on Monday to further enlighten you. I am a very obliging chap - REALLY :cheesy:
penrithem said:
My my, we do have a lot of NEWBIES all of a sudden.
Now, let me see if I can work this out for myself, or will I need to call LouDean back from his holidays in Siberia - for he does indeed know the answers to everything. :cheesy:
Now pn, you must first engage in a dialogue, for like ION, you may have to do the honourable thing shortly.
Penrithem, and what do you consider the difference between Science and Art?
Please note: I really do have to go shortly, so do not despair, for I will be back on Monday to further enlighten you. I am a very obliging chap - REALLY :cheesy:
Profitaker
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But if you really can't be bothered or don't know how, then read about a study one such person did.
http://www.amazon.com/Options-Edge-Winning-Volatility-Futures/dp/0070382964
He didn't just look at equity and index options, but commodity / forex / swaps / and a few other markets that I can't remember. No edge, he said, to either buyer or seller.
This would be logical, since if there really was an edge either way, then it would quickly be discovered and milked to death, thereby removing any edge and bringing prices back into equilibrium.
http://www.amazon.com/Options-Edge-Winning-Volatility-Futures/dp/0070382964
He didn't just look at equity and index options, but commodity / forex / swaps / and a few other markets that I can't remember. No edge, he said, to either buyer or seller.
This would be logical, since if there really was an edge either way, then it would quickly be discovered and milked to death, thereby removing any edge and bringing prices back into equilibrium.
barjon
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part of deleted cyof post: And please, if you do delete BULLDOZERS comments again, do not please delete this full post,
for am I not allowed to post my opinion for all to see, or is T2W controlling like Ken Calhoun of DTU. I hope not
cyof
sorry to disappoint you but I'm doing my best to keep this thread on track without it degenerating (again ) into custard pie throwing or a discussion of any particular trader's merits. The thread is about options not traders.
I would urge those who are experts not expect that everyone will promptly just accept their words of wisdom as facts just because they say so. People look for some evidence - such as that provided by your links - and it seems to me that such evidence can be readily provided without disclosing any edge that an expert may wish to guard.
For those who may be in ignorance of the true facts it is evidence, not put downs, that win the day and convinces them. That's what a dialogue is all about. As I said before a jury gets to the truth on the evidence, not the mere say so of counsel.
cheers
jon
for am I not allowed to post my opinion for all to see, or is T2W controlling like Ken Calhoun of DTU. I hope not
cyof
sorry to disappoint you but I'm doing my best to keep this thread on track without it degenerating (again
) into custard pie throwing or a discussion of any particular trader's merits. The thread is about options not traders.I would urge those who are experts not expect that everyone will promptly just accept their words of wisdom as facts just because they say so. People look for some evidence - such as that provided by your links - and it seems to me that such evidence can be readily provided without disclosing any edge that an expert may wish to guard.
For those who may be in ignorance of the true facts it is evidence, not put downs, that win the day and convinces them. That's what a dialogue is all about. As I said before a jury gets to the truth on the evidence, not the mere say so of counsel.
cheers
jon
All the data necessary to categorically determine the writer/buyer debate is freely available, and it ain't that difficult run the calcs.
To be honest, I'm not an experienced trader that can run the algorithms necessary to run the calcs. If as you say, the data is freely available, why isn't everybody doing it? Or is this the real debate? How to find the data and use the FACTS? Just joking, I'm not CYOF. Processing historical data is what seems to give you the edge, but that doesn't answer the original question, does it?
To be honest, I'm not an experienced trader that can run the algorithms necessary to run the calcs. If as you say, the data is freely available, why isn't everybody doing it? Or is this the real debate? How to find the data and use the FACTS? Just joking, I'm not CYOF. Processing historical data is what seems to give you the edge, but that doesn't answer the original question, does it?
andycan
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but have you accepted this to be fact or have you proven it to yourself?Profitaker said:
not long ago you said the markets are random and thre are many so called expert that will agree with you (most dont trade lol)
but what about those that say the markets are predictable are they looneys or they dont fit your way of thinking?
Profitaker
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I think it does. If you look at selling options every month, month after month for 20+years and calculate the P/L then I would say the results would be fairly conclusive.penrithem said:
