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I know that in the grain pits at the CBOT, the activity level is no more than 20% of what it is closer to open & close. Jessie

While they may not be the majority of paper, they get handled that way in the pit by arbs & MM's, spread against each other, across traders, etc. No doubt there will come a time when that isn't necessary, or can be done electronically, but the ability to do it now adds significantly to the...

I agree, it's something that I only generally do if I don't mind owning the underlying, but otherwise, like covered calls, it's really not something that too many pros do consistently (although I know a few who do) (carefully). It is, however, one more tool in a good option traders toolkit, and...

One thing to keep in mind is that selling naked OTM puts against an uptrend is VERY different than selling OTM calls in the same situation. The risk in selling naked puts is exactly the same as covered calls, only done at lower cost. The risk selling naked calls is theoretically unlimited. If...

Welcome to the New York markets. There is a reason why no one trades them unless they absolutely have to. If you think the e's are bad, wait until you try the pits! Jessie

First, you didn't work a "long time" at this. It takes 6 years (at least) to learn to be a good carpenter, 12 years (at least) of college, med school & residency to become a doctor, and why should trading be any different? Most professional traders I know took years, and blew through at least a...

Not exactly the same with just equities, but you can certainly spread weaker stocks against stronger to reduce directional exposure significantly. A lot of equity traders made a lot of money this year in the retail sector, for example, by shorting Home Depot and going long Lowe's. If the group...

It's also a bit more complicated than just total liquidity, as different markets have different kinds of order flow. For example, in pit-traded futures options, you can usually get in and out of small size in bean options with a one tick spread ($6.25) even in deep OTM stuff, because there are a...

I trade options pretty much delta neutral, without regard to direction, and follow a system that I know makes money in the long run regardless, so it's really just a job for me. When the market really spikes either way, I typically lose a bit, but it comes back before too long. I know that I...

Re. leaving money on the table, Baron Rothschild, when asked why he was such a sucessful investor, replied that "I never managed to buy at the bottom and I always sold too soon". There are always more trades. Jessie.

Good point! I think it was Ed Seykota who said that wanting to trade without losses is like wanting to breathe without exhaling. What the original post was describing is a Martingale system, and theoretically, it will ensure that you never lose money in the end. You double up on all of your...

Folks have made some good points. For me, after a few years, it is the confidence in my trading systems that lets me not get too freaked out. For me, the difference is whether my losses are the result of good trades or bad trades. And, as has been said many times, a losing trade is NOT the same...

If a market trades THROUGH your price, you are entitled to a fill (unless desgnated fast market conditions exist), so you also have the option of waiting until the dust settles, then, if it didn't get filled, you can request the fill at your price based on time & sales. Also, that is why you...

Options are a wonderful way to trade. Just like everything else, they have limitations. The good news, though, is that they are by FAR the most flexible trading vehicle available. You can trade direction (up or down), volatility (again, up or down), you can make money in a dead flat market, a...

Your only real option is to call the pit for a firm size & price quote, and execute then, as the price is constantly changing with the underlying. If you are trading futures options with any size, you should know your pit broker and have headset access. In addition, you really need software that...

You can also deduct proportional utilities and other related expenses. I have never had a problem, but my accountant suggested that I take dated photos of the office, which clearly shows that it is solely a workspace. Don't know if that would help, but so far no problems, so I haven't had to...

For me, it's more a case of looking at where the trade is and what the market is doing RIGHT NOW. If I would enter the market for the first time with a larger position under current circumstances, even if I didn't have a position under water, then I would consider it. I look at each position...

Covered in the pit Jessie

That's really the main advantage I can see, unless you wanted to put in some time on the floor as well, to learn a bit about the contracts you are trading. I spend two or three months each year in Chicago in the pits, just getting to know folks, etc., and that is how I pick the brokers that fill...

Just to toss out a bit more info, CBOT seats other than AM & FULL are significantly cheaper to buy or lease. if you are an option trader, COM seats at the CBOT lease for only about $200/month, IDEM seats the same or a little more. You are allowed to trade the underlying for hedge purposes with a...