Show me an example of selling premium where the risk reward isn't atrocious.
Are options a waste of time and money? (pun intended)
- Thread starter wxytrader
- Start date
Show me an example of selling premium where the risk reward isn't atrocious.
Show me an example. Yes we all understand that IV dictates price but collecting the premium is just the beginning. You have to actually keep the premium.
Seinfeld said it best:
Optionsinvesting.co.uk - I post a trade each week -this week trade 326. I'm an idiot and I have made a living for decades.
I just had to come back to this. Why are you so antagonistic? All I did was say I was analyzing some options strategies that to me didn't look like they would be profitable even if I was correct directionally. It's like you treat this forum as your own personal sandbox and feel you have earned authority by your post count lol. Trust me I wouldn't trade my knowledge or my account size with you.
The more productive response would have been to ask for an example of one of the positions so we could dissect it.
What are you trading? DTE? What's your trading plan for the upcoming week? Sounds like a broken wing butterfly...
Options were introduced as a tool to solve certain problems; originally, problems that came with owning or attempting to short stocks, i.e. because with a plain stock your exposure is across the full range of price movement. Then, it turned out that options enable a whole universe of advanced strategies beyond simply fine tuning exposure.
Sure, understanding options at a sufficient level to trade them is a major time sink and not for everyone, and I've chosen to stay clear of going all the way into that rabbit hole yet for that reason. I do a small amount of progress every year. Maybe I will never trade options nonetheless.
Sure, understanding options at a sufficient level to trade them is a major time sink and not for everyone, and I've chosen to stay clear of going all the way into that rabbit hole yet for that reason. I do a small amount of progress every year. Maybe I will never trade options nonetheless.
That's the point. It IS a rabbit hole if you are not using them as intended originally to compliment a stock position. I am still waiting to be proven otherwise.
90% of options, futures, and stock traders can't make it.
If you don't think you will be in the 10% category, then
go be a doctor, surgeon, dentist, banker,
soldier, hitman, worker, farmer ....
Do anything besides trading (No pun intended).
Trading is actually very very very very
Difficult.
I hope I have given enough encouragement / discouragement.
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Not that hard at all if you don't take away your best weapon...TIME. Probably 99% or all trades that have ever been closed at a loss could have later been closed at a profit. With futures you are faced with carry over fees, interest with forex etc. Options you have an expiry and time decay. I doubt even 10% of options traders actually make more money than a regular minimum wage job trading purely options. I would go so far to say that less than 1% of traders can eek out a living purely on options. Bottom line if you don't have enough capital to manipulate price action to your favor (market makers) then you are along for the ride. This is fine if you are buying stocks with cash, you just wait it out, or even average down, but if you are on margin, or playing options then you are an easy target.
Rule number one of trading. "Know who you are trading against".
So again I am waiting. Prove me wrong.
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