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a system doesn't have to "work to inifinity," but if it's drawdown not only bankrupts the firm but nearly causes a financial markets meltdown, it becomes a little suspect. i think ltcm is germane to the original point of this thread as well - namely that writing options for a living as a be...

first the expectancy that the losers have to be huge is a relative concept. you'd have to be selling 10 delta options consistently for this to be the case. remember that we're looking at probable returns as a distribution. you could have one catastrophic loss or a bunch of little one cent...

sure i've heard of 'em. long term capital management (LTCM) comes to mind. black boxes tend to work until they don't.

i think you missed my point. if there is someone that proclaims they use a system that consistently makes money then there should be some sort of evidence that supports the claim. i'll go at this another way. pick any system you want. tell us what the next trade is. or maybe to be fair and...

i would guess not. a predetermined exit is the equivalent of holding a shorter term option to expiration. it's just a little more complicated because that expiration date is unstable. but think of it this way, if you buy a three month call and then say you will exit if the underlying is...

hey John, i couldn't resist. i'd rather get roughed up here than by the market. i made the mistake of telling people they will never find a system to beat the market and for that matter will probably never make money trading period. next i have to break the bad news about santa and the easter...

i don't really believe in much when it comes to the markets. i'll leave that to the faith seekers. i need to see some proof to be convinced of any claims relating to trading. i'm a skeptic and an empiricist to the core. btw, it's not that i don't believe there isn't any water in the oceans...

my last comment is simply that based on years of experience and upon exposure to many that proclaimed that they traded faithfully from a system and were net winners, i've found that after a little bit of scrutiny that there was no real adherence to a system at all. there was always some...

okay. where are these systems and traders. please show me one along with audited statements and independent proof that the profits were derived from a system. people spend their lives in pursuit of some holy grail. they are convinced - mostly by the lies of system sellers - that there must...

derivatives do not create anything. they are merely ways of breaking up risk and reward properties of assets and monetizing these elements for trading purposes. one side of the transaction exchanges partial returns in exchange for limited risk. the other side embraces the risk in the hopes of...

i rest my case. (i.e. systems do not work.) i never said that the market has no inefficiencies or that no one tries to trade robotically. i simply claimed that inefficiencies by their nature are short-lived and self-cancelling. if traded enough and in size, they would eventually move the...

the claim about the impossibility of an amateur finding an inefficiency is logically self-evident. the claim about winning traders not having a cookie cutter system that they follow to consistent profits is based on over twenty years experience in the markets (quite a few of those resulting...

okay we're working from different definitions and terminology. i assuming that "strategy" involves not just "a series of option positions" but specific rules guiding that selection. because of the specificity of the rules the strategy can thus be backtested. if it can be backtested it can be...

there's a difference between "zero-sum" and "zero-expectancy". zero-sum indicates a finite system. every withdrawal entails an equal deposit. how those withdrawals and deposits are split doesn't matter. the fact is there is a limited pie and when someone takes a piece, someone else goes...