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if this trade is any indication of your approach, then, yes, your success is most likely attributable to luck. buying or selling is irrelevant to reckless trading. even if you were successful 90% of the time (a highly dubious claim - which would put you at about 10 standard deviations above...

all univited wrote was that you are suggesting trades that involve extremely high risk. which is indisputable. for that iceman wants uninvited silenced. in addition it's quite clear that you do nothing to manage that risk by first saying you had a stop loss limit and then ignoring it...

actually, mathematically the expectancies have not changed. with this zero exp lottery over a large number of plays you should hit the first number correctly about 10% of the time. similarly doubling or rolling to the two-digit bet is still a net zero expectancy game. as a metaphor i tried...

zero expectancy incorporates all currently known information. once you are in a trade, information changes in an unpredictable way. on any single leg of a trade the zero/neg expectancy is operating at the moment. but in relation to existing (prior) trade(s) you can make adjustments that...

no but the statistical correlation between current option prices and value at expiration is highly correlated and the distribution of future values around current values is such that the probabilities act like they are close to a non-random, fixed model. so close that it's fruitless to assume...

what a trader thinks is irrelevant to expectancy. i may buy a lottery ticket with the "expectation" that i will win. that doesn't change the true odds. efficiency is a function of markets not models.

i guess this is possible but highly improbable. since +expectancy resides with the trader there is no reason that the selection process cannot be where the edge comes from. i've never met anyone that simply opened positions and held them to expiration with no adjustments and consistently...

here's how you can tell that John and i are not the same person. ask us which ends of the political spectrum we occupy. here's a hint: i'm a little left of che guevara.

i love this. i always wanted to be part of a conspiracy. now the truth can be told. mav and i are actually siamese twins. we also trade against each other so that we can honestly say that one of us is always profitable. now you all know the secret to positive expectancy.

well one of the themes of this thread is that the markets are efficient. you can never know who is on the other side of your trade and certainly can't specify an order to "FILL ONLY IF THE OTHER SIDE OF THIS TRADE DOESN'T KNOW WHAT THEY'RE DOING." at best you have to assume that the market is...

only if i can have you trade for me. :p

god knows why, but let me re-enter this discussion and try to add a thought or two. first of all expectancy as i understand it is the probability of profit less the probability of loss. if you make $1.00 on ten trades and lose $2.00 on 5 trades you have zero expectancy. $1*10/15- $2*5/15...

interesting question. i'd approach it this way. first, markets are becoming more efficient as greater and greater resources are devoted to the pursuit of finding anomalies. however it's important to remember that market values are a consensus of the spectrum of opinions over what "true value"...

i'm not an actuarial accountant but that is their job. they determine and quantify individual and group risk profiles. the insurance companies then add a net premium on your insurance policy that covers the probable risk (i.e. what would normally equate to an option's fair value) plus the costs...

if you sell an option it is not "worthless" since it holds value for the person buying it - which means that there is always a probability of it having actual value. i'm as enamored of being long theta as the next guy. but that doesn't mean i don't recognize it's obverse risk: gamma. limited...

this is nonsensical. there is no "flaw" they are just pulling randomly selected scenarios out of thin air to sell whatever it is they're hawking. and as triple A points out they don't even get their math right in the examples. there is no way the ATM option they describe can go up in value in 32...

that's why i said it is a weighted average of opinions. if soros believe an asset is worth $10 and has a billion dollars riding on that opinion and i think it's worth $20 and put a thousand dollars on that opinion, if we were the only two players, where do you think that asset would trade...

how else can you conceive of fair value in a market based system? that's how i understand supply and demand to be working themselves out. please enlighten me if i am off base here.

how is that different from a directional bias. i used this example earlier in this thread. assume a stock with only two opinions. 50% believe it is worth $50, 50% believe it is worth $48. now assume opinion changes so that 90% believe it is worth $50 and 10% believe it is worth $40. in both...

we are obviously talking about different notions of probability. no one knows the future. prices reflect the weighted average of every market participant's opinion about the future at any point in time. i examine what the options prices are saying about probability which is mostly the prospects...