Anybody trades options without any greek letter?

taowave · Jul 28, 2009

After thinking about it,I am pretty confident you are correct in your assessment.....

I think I have distilled 20 years of derivative trading and simplified it to a level where I dont need the greeks....

I am back in your camp!!

Quote from wayneL:

No worries Taowave,

I was just interested if you (and others) might have a "picture" of them, even if only subconciously.

Cheers

Buy1Sell2 · Jul 29, 2009

If you buy options, buy them when premiums are attractive. If you sell options, sell them when premiums are attractive. Thank you for your time--Ishmael

dagnyt · Jul 29, 2009

Quote from Buy1Sell2:

If you buy options, buy them when premiums are attractive. If you sell options, sell them when premiums are attractive. Thank you for your time--Ishmael

Hey, 'call me Ishmael'

What's attractive?
On what basis?
You are just gambling, IMHO.

Mark

Buy1Sell2 · Jul 30, 2009

Quote from dagnyt:

Hey, 'call me Ishmael'

What's attractive?
On what basis?
You are just gambling, IMHO.

Mark

Pay attention to the underlying and you can easily see the attractiveness. Thank you for your time--Izzy

dagnyt · Jul 30, 2009

Quote from Buy1Sell2:

Pay attention to the underlying and you can easily see the attractiveness. Thank you for your time--Izzy

Bull!

Options don't trade like stocks.

You find a bullishly attractive stock, that does not mean it's a good idea to buy calls.

Thanks for wasting everyone's time-John Galt

erol · Jul 30, 2009

Bull!

I don't think he was serious....

i think he was providing just as useful a reply as another member here...

unless you're joking too, in which case that would make me a dolt.

edit: while i'm at it... wrt to the original question... I just don't see how you could, w/out a graphical view.

i'm doing it with td waterhouse... and I have to rely on greeks since they don't have those fancy charts.

dagnyt · Jul 30, 2009

Quote from erol:

I don't think he was serious....

i think he was providing just as useful a reply as another member here...

unless you're joking too, in which case that would make me a dolt.

you are not a dolt

i was not joking. I think I take this whole place too seriously.

Mark

OddTrader · Jul 30, 2009

I just found two posts (both from Maverick74) that I personally consider are quite relevant.

Do the Greeks provide any reasonably good predicting capability for the upcoming options prices? I think the Romans (IV) do!

http://www.elitetrader.com/vb/showthread.php?s=&postid=1326299

Quote from Maverick74:

There are two ways of making money in this business as far as I know. You either need to be a damn good directional trader, or a damn good volatility trader. This is why I give so many guys shit about selling 5 delta verticals on the SPX thread. You'll often here them say things like "I don't care what the market does, I'm safe". LOL. That is not a volatility trader. People work very hard in this business forecasting future volatility and future price action. It's comical that some think you can just slap on a spread and make an adjustment here and there and make money. Yet, many of the late night infomercial groups tell you it's just that easy. I hear all the coin phrases: "I can always adjust", "I can leg into a fly", "my spreads are safe because they are DOTM", "I can only lose my debit so I'm not worried", "I have edge from my theta", etc....... And it goes on and on. You will never hear a professional trader utter these phrases. They are usually the mark of an amateur.

This is a very tough business. If you are going to make it, it's because you develop into a great trader. Not because you can slap on spreads at good prices.

http://www.elitetrader.com/vb/showthread.php?s=&postid=1615995

Quote from Maverick74:

I have some very bad news to report here. I, however, stand by this statement and have more then enough trading sheets to back me up counting 100's, possibly thousands of traders.

The only way you can be profitable over the long run trading options is if you can predict volatility or price better then 95% of the other market participants. End of story. There is no getting around this. This is a non debatable fact. Anyone that tells you that you can just trade condors or calendars and make money should be reported directly to the SEC.

I know you don't want to hear this. Nobody does. It's kind of like telling an average slop that he will never marry a supermodel, but I think I have been in this business long enough and around enough traders to not only make this statement, but back it up with cold hard numbers.

Now, there is nothing inherently wrong with trading condors or calendars. It's just that both of those trades happen to be volatility trades. If you predict volatility correctly, they will make you money. If you don't, they will not. It's that simple. There are some very very bright people in this business that spend tens of millions of dollars and hire 100's of quants to predict volatility for them and they have a very tough time making money. But wait, some newbie with no option knowledge in the world is going to just slap on some volatility trades and consistently make money? I mean think about that for a second. Just try to use some common sense here.

...

I will say it again, the only way you will make money trading options is to be able to predict either direction or volatility better then 95% of all the traders out there. There is no way to get around this mathematically. Sure, due to the limited data sample many of you have, you will string together a few positive months. But in the end, you are playing with a negative expectancy. Good luck.

OddTrader · Jul 30, 2009

Quote from dagnyt:

Options don't trade like stocks.

You find a bullishly attractive stock, that does not mean it's a good idea to buy calls.

My personal view is, for some long-term directional and trend-following traders, buying calls (long calls) would be a fairly good decision, basically!

Of course, I might be wrong.

Johno · Jul 31, 2009

Quote from u21c3f6:

Let me give you a gambler's perspective. :eek:

Yes, you can trade without "knowing" the Greeks but knowing what the greeks represent is very helpful.

Live sports wagering is very much like the options market and in fact I use the same methodology to wager (invest) in both.

I couldn't define the greeks by name for you at this moment without looking them up but for the most part I know and understand what they represent. You would never hear a sports bettor ask if you made a particular wager to capture theta or what is the delta or gamma of your wager. But you need to know for example that spreads get wider when there is more uncertainty (men in scoring position) and that the spreads will be more volatile the closer to the end of the game especially if it is a close game or near the point spread (strike) etc. The same holds true for options.

The following is my view on this subject. Other views may vary.

The options market in and of itself and just like the live sportbetting market does not create wealth, it only redistributes wealth (less costs which are distributed to the MM, bookie, broker). My objective for both markets is to find strategies that when you subtract the sum of your losing wagers/investments from your winning wagers/investments you will be left with a profit. It is that simple!!!

Of course finding those strategies can be the hard part and there is no one right answer. What I notice is that those that claim to employ a certain strategy successfully will get blinded to other possibilities. It's as if, if you don't do it this way or my way then you can't possibly be successful. I am amused by the number of times that I have read in threads about how one can't or shouldn't do this or that and it is exactly what I am doing successfully. The point is that what they are really saying a lot of times IMO is that they don't do it that way or they couldn't find how to do it that way successfully. The moral: Do not believe any advice (not even what I am writing) without finding out more about that particular advice and testing it out yourself to see if it makes sense.

In searching for strategies I have found that my best strategies are sometimes the exact opposite of what I thought when I began searching. The key here is to prevent curve fitting. Don't force the results to fit your view or what you been told, let the data "speak" to you (listen). Take what the market will give, you cannot force your view on the market. My search for strategies in both the options and live sports betting markets had absolutely nothing to do with the Greeks. The concept of the Greeks becomes important to me during the application of my strategies in the markets.

There is obviously a lot more that can be discussed but I will leave it here and hope that I answered your question. Good luck.

Joe.

Joe,
You have obviously spent a great deal of time engaged in introspection. The time has not been wasted.

Ultimately, we need at the very least a good feel for Options behavior, and a good understanding of the maths involved will help people achieve this.

Regards

Johno