Recent content by chanakya

Exactly right ! The call option writer is passing on part of the $$ to the option buyer. lets assume the company has an IPO of $10 john bought the $10 and immediately wrote $1 call which carl bought. now john has invested $9 on the company and carl is ivested $1 in the same company...the...

In my world, either both stocks and stock options are Zero sum games or both are not.

yes john is gay and is desperate...so he got some utility for his options from carl ( on top of $5) :-) BTW, stocks are also zero sum game ...its just that the expiry is too long ( till company dissappears 100 years later)

If you look at the way its bieng discussed here ,why are stocks not zerosum game then ? If a company if selling stocks at IPO , lets assume its writing a call with 0 intrinsic value and getting premium for all the future growth. Any increase in the value of the stock in future would be...

Well what happens if the stock does not go to $45 ? The fact is that you don't know ahead of time where the stock will go. There is huge difference between a guranteed $5 versus a speculative $100 The stock holder is passing on the risky game of speculation to the buyer of the call's in return...

completely agree, the stock holder is just passing on the risky game of speculation to the options trader.

But he got the premium on the calls he wrote ...? If somebody is just happy with the premium ..is it not enough for them. I don't want to go into technicallity of this but at the end of the day, i see both john and carl having more money in thier hands than they started off with. i am not...

Lets assume there are two people One is john and the other carl john is 65 years old and is holding 100 intel stocks. He does not want to take too much risk with his stocks and is happy with guranteed premium than a unguranteed increase in stock price so he writes calls on the intel stock...

"One of the best traders he hired at one point had not even completed high school" A person who had not completed a high school may not necessarily be a person with low IQ. when i mentioned IQ ,I was actually referring to intelligence. I apologize for the confusion because i realized that...

Day trading is a zero sum game. Any zero sum game with no barrier of entry has similar result (90:10) trading succcess is related to your intellectual and emotional IQ which is a bell curve. The way you can come to the 90:10 ratio is by looking at the general IQ curve. In the absense of any...

I am just a beginner in options trading. I have traded stocks before.I don't day trade.I hold the stock 2 to 3 days and sell them. I am interested in options trading now. Can you guys advice me on which trading platform is best suited for beginners ? TDAmeritrade Scottrade ... .. etc