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

Options are kind of a bitch to trade unless intraday then a lot of the complexity is
moot.

And not cheap, fees and navigating horrific spreads

But the leverage is nice.

Im probably too stupid to trade an always depreciating asset successfully tbh
 
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Options are fascinating-it's like understanding how your car works. Most people can drive but they have no idea about the mechanics. I'm cheap and hate to pay for expertise I can attain myself! Aim for 2% a month, those guys who make billions -that's a lot of luck and cojones.
 
Fortunately - unfortunately - I dunno which is best - I was indoctrinated early in my trading adventure not to touch Options as they were a losing strategy.
What wasn't mentioned so is Gold trading, but I digress.

My experience, my plate is too full learning how to navigate the sea of Stock trading.
Stock trading, learning how to know direction is a full time job in itself.

I'm too old now to educate myself on Options, besides, after decades of trading, I'm still learning how the markets operate, so I still can't afford the time. :)
 
Sergio123 said:
If you don't want to manage all of these contracts on a daily basis (and I don't fault anyone who doesn't want to) then a buy and hold of shares will be better, IMO.
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Well, those of us who persevere for a couple of years and didn't give up, eventually figured it out.

I changed strategy and started hunting for black swans (special situation trades), simply using options as a tool.
 
wxytrader said:
I have been looking at different option strategies, but none of them seem to have a reasonable chance of making any consistent profits once you factor in risk reward, premiums paid and time decay. Everything is priced to basically cause maximum pain to everybody.

The strategies I was analyzing were Singles, spreads, iron condors, butterflys.

Prove me wrong.
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Retail options traders normally get crushed. There are many reasons for this but the reoccurring frictional costs are an underrated one, and the speedy and fierce competitions from algos is another.
 
Dam Chef,you persevered for 2 years and figured it out??

What took you so long :)

ironchef said:
Well, those of us who persevere for a couple of years and didn't give up, eventually figured it out.

I changed strategy and started hunting for black swans (special situation trades), simply using options as a tool.
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ironchef said:
I changed strategy and started hunting for black swans (special situation trades), simply using options as a tool.
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That's great. We don't all need to use them the same way, nor should we. There wouldn't be a market if we all wanted to do the same thing at the same time. We all need to manage our own risk.
 
El OchoCinco said:
Prove to us why we need to prove to you anything.... our bank accounts don't need your pat on the back...

Most of the experienced option traders here simply trade the options or futures and don't touch the stock except in rare cases to delta hedge.

There are investors who only do covered calls or protective puts but many of us use the options in calendars or butterflys to trade vols for example... no stock ownership needed. I will add options to stock positions but it is cheaper to trade the options then load up on stocks. Also stocks are binary....up or down. Options are chess while stocks are playing tic tac toe.

Also the fact that you cite Larry McMillian's book as the bible says a lot too... his books are for people who want a basic understanding of options. I would have given you more credit if you cited a book by Natenberg, Cottle or even Sinclair which focus on vols.
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Ok I have been perusing the book and it seems like the tos option analyzer tool will accomplish most of what is being talked about. For EOD profits and losses you can use a simple spreadsheet.

Option Volatility & Pricing on page #504 he is speaking about selling strangles/selling kurtosis. The issue would be that you would have a very negative vega so to neutralize this if you wanted to focus solely on kurtosis you would open ATM straddles with the same delta.

So basically if stock abc is trading @ 195 the strangle would be:
Sell 1 call option @ 198
Sell 1 put option @ 192

Then open the straddle:

Buy 1 call option @ 195
Buy 1 put option @ 195


Isn't this is the same as just opening 2 vertical spreads?
Buy 1 call option @ 195
Sell 1 call option @ 198

Buy 1 put option @ 195
Sell 1 put option @ 192
 
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Yup. The same as a Condor.

It doesn't matter what structure you open with (butterfly, diagonal, vertical, calendar), or if you makeup your own customized structure. Just assume it's at parity.

It only matters how you manage it against market fluctuation.
 
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