Are options a waste of time and money? (pun intended)

[taowave]

Dude,do you really think Simmons is looking at fractals a d Elliot wave count??

I dont know one successful guy who trades pure Elliot..Far better off with something like Weinsteins Stage analysis..

What are you back testing for? You have the Delta, so your probability is set. Elliott wave and fibs are all based on statistics already...so that work is done for you. I have heard of hedge funds actually going back to look for similar patterns and trade based on them repeating themselves. Other than the Medallion fund which I think used a form of fractals or EW.

 

[wxytrader]

Dude,do you really think Simmons is looking at fractals a d Elliot wave count??

I dont know one successful guy who trades pure Elliot..Far better off with something like Weinsteins Stage analysis..

Nobody trades just using one method...EW is purely statistical probability. Simmons looked for anomalies to exploit.

 

[M.W.]

You are jumping all over the place. Perhaps that's why you seem so confused. You claimed you get direction right yet still see no edge with options. If it held true that you are most often right on direction (which you are most likely not) then buy slightly out of the money calls/puts and easily pay the time decay, you end up comfortably in the money. My entire point is that your claim on direction is utter nonsense. If that held true you would just trade the underlying and sit on sizable returns.

My guess is you are a bloody beginner and are angry that your hope of an easy way to riches did not quite turn out that way, probably sitting on some losses right now

If you go long an option, right away you are down the spread, down the premium, down the fees, and the clock has started ticking on your time decay. You not only need to get the direction right, you need the stock to move in that direction without lingering. That doesn't sound like an edge to me on a consistent basis. Perhaps your math guys should review some basic addition and subtraction.

Direction is not hard at all...it's just using statistics in you favour. The problem with options is you may get a double correction sometimes so you can run out of time for reasons mentioned above.

I saw somewhere that the premium calcs err on the high side of probability of price movement, and that statistically price does not generally move to those levels yet you are paying the price for the potential of that move.

Anyway my point being if you wait for the volatility to come in you are essentially already priced out of any reasonable chance of profits...BUT if you can get in before volatility comes in then THAT could be an edge I grant you that. What can you go by...bollinger bands? I mean yes volatility squeezes and expect an expansion...but how long will it squeeze right?

 

[wxytrader]

You are jumping all over the place. Perhaps that's why you seem so confused. You claimed you get direction right yet still see no edge with options. If it held true that you are most often right on direction (which you are most likely not) then buy slightly out of the money calls/puts and easily pay the time decay, you end up comfortably in the money. My entire point is that your claim on direction is utter nonsense. If that held true you would just trade the underlying and sit on sizable returns.

My guess is you are a bloody beginner and are angry that your hope of an easy way to riches did not quite turn out that way, probably sitting on some losses right now

I'm still waiting for you to prove me wrong by posting a trade plan you have for Monday...anyway, yes I can and do sit on the underlying obviously. I was talking about options pricing being a bit of a suckers game for reasons I have already mentioned. That's why you guys are here and not cruising around in your Lambos or yachts.

 

[M.W.]

Funny, Weinstein was required read for all juniors at the first prop team at a large ibank that now is no more. The 4 stages of hubris... ;-) reminiscing aside, that book still holds a lot of value for beginners. Probably more so than all modern TA literature combined.

Dude,do you really think Simmons is looking at fractals a d Elliot wave count??

I dont know one successful guy who trades pure Elliot..Far better off with something like Weinsteins Stage analysis..

 

[wxytrader]

Funny, Weinstein was required read for all juniors at the first prop team at a large ibank that now is no more. The 4 stages of hubris... ;-) reminiscing aside, that book still holds a lot of value for beginners. Probably more so than all modern TA literature combined.

I'm skeptical that anyone who writes a book, has a youtube channel or sells a course is successful trading because why would you bother? I have however purchased Natenberg as I agree you can always learn new things.

 

[M.W.]

I enjoy the time fishing the Douglas channel and Portland canal on my yacht. You know nothing and are a nuisance. Good luck to you with that attitude. I nor anyone here owes you anything.

I'm still waiting for you to prove me wrong by posting a trade plan you have for Monday...anyway, yes I can and do sit on the underlying obviously. I was talking about options pricing being a bit of a suckers game for reasons I have already mentioned. That's why you guys are here and not cruising around in your Lambos or yachts.

 

[wxytrader]

You do realize their are several posters here who are very successful,some who traded for major IB's and hedge funds....

You would have been far better off saying others than trading 0-3
Day options,you cant find any significant edge....

And fwiw,backtesting on TOS is amatuer hour

I question how successful they can be as retail traders. Hedge funds can manipulate the market in the direction that is favorable to them by sheer volume not to mention all the tricks market makers can play. The only way to beat the market is to not be forced out of your position. Hedge funds basically exist by retail losing money to them, not them making money by trading prowess. You have to know who you are trading against. Funds aren't going to cannibalize each other. Look how they cried foul when Wall street bets turned the tables on them.

 

[M.W.]

Bill Maher would say "you whiny little bitch". I have a solution for you, get a different job, this industry is simply not for you. You will end up having more peace and confidence.

I question how successful they can be as retail traders. Hedge funds can manipulate the market in the direction that is favorable to them by sheer volume not to mention all the tricks market makers can play. The only way to beat the market is to not be forced out of your position. Hedge funds basically exist by retail losing money to them, not them making money by trading prowess. You have to know who you are trading against. Funds aren't going to cannibalize each other. Look how they cried foul when Wall street bets gave them a taste of their own medicine.

 

[Sergio123]

I question how successful they can be as retail traders. Hedge funds can manipulate the market in the direction that is favorable to them by sheer volume not to mention all the tricks market makers can play. The only way to beat the market is to not be forced out of your position. Hedge funds basically exist by retail losing money to them, not them making money by trading prowess. You have to know who you are trading against. Funds aren't going to cannibalize each other. Look how they cried foul when Wall street bets gave them a taste of their own medicine.

Volume and frequency is the difference. HFT firms manages moves alot quicker and with alot more volume.