Buying calls for a living and arguing with derivman

Quote from Derivman:

Thanks for the post anti ad hominem. Firstly, you are not obliged to post on this thread and no one is holding a gun to your head, so as to speak. Secondly, us newbies tend to ask questions that may appear off topic to the experienced traders at Elite Trader, but they are not off topic as far as the newbie is concerned. . .
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Hmm. Just to be clear, nowhere did I say any of your questions were off topic.

I do still wonder what your response is to the clarification of the statistic regarding the percentage of options which expire worthless? Was this not of as much interest to you, given that it disproves your 'well backed' assertion, as a link to an article by a member of the media?

Now, I am not in the business of belittling people who exhibit a genuine desire to learn. Much of the time I don't like the tone here either, but I will tell you what - whenever I have read something about option or market theory by one of the experienced traders here and checked it with some resource that I knew to be irrefutable, it has rarely been incorrect. There are many many traders here who know absolutely what they are talking about, esp wrt to the rudimentary subject matter covered in this thread so far.

The poor tone notwithstanding, you must credit that it is very frustrating when someone who claims to know very little about a topic asks questions & is answered in good faith by people who do, get's true and correct information to those questions & then argues. Every time someone has presented a proper answer to you, your response has been to take exception to the tone in which it was delivered. With respect, it is not anybody elses responsibility to prove wrong whatever fallacies you may have taken under your belt so far.

Anyway, after 5 years of options trading full time I can reliably answer your question about whether a new trader should begin with buying or selling options:

Learn to do both; and the circumstances underwhich you should do either & whether it be separately or in combination. Looking for compelling reasons to do only one over the other will send you on a wild goose chase, potentially lose you a lot of money and you will miss things of true educational value. Knowing options theory, synthetics etc is critical to being a proficient trader. It is the basis from which you will make your informed, practical decisions.

The CBOE education centre is a fantastic resource & you can be assured of the quality of the information & the instructors who contribute there.

I also advocate spending money on your education, though many here do not. In my experience doing so accelerates the learning curve. Market Makers have to 'pay' their tuition, it gets them up to speed quickly, so I don't see why I shouldn't also. Whether you take on a mentor or do seminars, is up to you. There are good ones out there, just do your research.

Lastly, have as much respect for what you are being told by those more experienced than you, as you expect to be shown as a new comer and things will go faaaaar more smoothly.
 
Quote from daddy'sboy:

And I think also that a word of thanks is in order for your generosity (not to mention time) in replying to all these posts, Derivman. So, thank you, for your efforts are much appreciated in continuing to contribute to this most excellent of topics. Keep up the good work and may the Lord smile kindly upon you.
Oops, almost forgot to answer the topic in question - yes, buying calls for a living is indeed a splendid undertaking.
And may God bless you in all his/her glory.
db
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db, did you fall down and bump your head?? Would you ask your mum to take your temp please! :p
 
Quote from daddy'sboy:

To be fair and provide a balanced view, I must say that selling calls could also be a fine undertaking.
But wait! I know this may be a little off topic but buying PUTS for a living is also a good idea, as is selling them.
And if you really want to make a good living then you could combine the buying and selling of the aforementioned in many combinations - the only limit being your delightful imagination.
db
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Thanks daddy's boy for the reply. Although your tone is somewhat abusive, I do note the relevant information therein, and for that I thank you and encourage you to engage in more meaningful discussions. As mentioned previously, the purpose of the thread is to discuss the topic "Buying calls for a living", but as I also mentioned I do not mind the discussion of any other Option Trading related topics on my thread, the only thing that is not allowed is bullying or mockery of Elite members, especially newbies. When you speak of "combine the buying and selling of the aforementioned in many combinations", I take it that you are talking about the various ways of combining calls and puts in order to place trade/s that have a med / high probability of realizing a certain profit within a pre-defined set period of time. Can you please clarify as some of us newbies may misunderstand your comments, and may not be certain if you are talking about Option Strategies only, or a combination of Options and Stock / Futures / Commodities. Again, your input is much appreciated. Cheers.
Derivman
 
Quote from makloda:

Don't listen to the egomaniacs attacking you here.
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You have obviously not read the thread.

Derivman is another alias for someone that has been banned and removed from ET and trade2win several times before. It probably took him by surprise how quickly he got banned from ET so now he is doing this "profuse apologizing" act.

He is proceeding to lure newbies in with his false premises so that he can then sell his services and push his website: www.citybullsh#t.com

I'll cut to the chase to save Derivman the long-winded charade:

1- Sell options because there is an inherent advantage to doing so.

2- Options is not a zero sum game. The advantage is with the option seller due to time decay.

3- More options expire worthless. This is true because John Summa says so and he's written a book so can't be wrong. Therefore selling options has an advantage.

4- Make sure you choose a broker who isn't going to automatically liquidate your position in a margin call situation when a black swan occurs. IB are no good in this respect. If you have a few dys to meet the margin call then the market will have recovered. Besides, you can always just keep rolling your options to the next month out.

5- Sell options on commodities as they have better margin treatment and they are overpriced so there is an inherent edge to selling them. Don't tell too many people otherwise hedge funds might find out about this consistent an persistent overpricing and then they too will sell these options and drive the price down thus eliminating the edge for me and you.

6- Only the minority make money and in options it is only the minority that know about the advantage of selling options.


2. Understand that every approach has different risk/reward characteristics. There is rarely (or rather: never) a way to outsmart the system and increase the rewards (profits) without increasing your exposure to risk.
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If you had read the thread you would know that Derivman believes that options are not a zero sum game. Do you agree with him?
 
ROFLMAO tradermojo - damn the guy must be frekkin d-e-s-p-e-r-a-t-e to go to this much effort before springing 'the trap'. And I thought I had too much time on my hands! OK, done here. Thanks tm!
 
Quote from opt789:

For the sake of efficiency can we just assume that Derivman is stating that option trading, meaning hedges and other instruments in combination with option contracts, is not a zero sum game? We would all agree with that statement and his links confirm this. OptionsXpress states "trading is not zero-sum" they don't and would not say option contracts in and of themselves are not zero-sum. I would be happy to help you but after quite a few pages of sound and fury signifying nothing, can we move on to an actual topic?
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Thanks for the reply opt789. Please look at the following link from Optionexpress.

http://www.optionsxpress.com/educate/investing101/players.aspx?sessionid=

"For simplicity, let's take the case of a butterfly spread. The fact that one person made money buying a butterfly does not automatically mean that someone else lost. Instead, the person who sold the butterfly may have traded out of the position using spreads or by selling individual options. For every person who is long a butterfly, call spread, put spread, or whatever, there are not necessarily people who are short the corresponding position. As such, the profitability of their positions will necessarily differ."


I have read again carefully the Optionsxpress view where they say that a "Butterfly Spread" is a pure Options trade and its a Non Zero Sum outcome. I am not arguing with you and I don't see the need for me to agree with you or your views.
If you think that, because I refuse to agree that Options trading is a Zero Sum Game, and because of my decision you can call me whatever you wish under the sun, that is indeed argumentative. Its not going to change my decision on the subject. I prefer to agree with the Optionsxpress views and not with you or any members at Elite Trader. That is my freedom of choice. I realize this may put me in the small minority on the Zero Sum view, but I think it will be wise and safe for me to side with the Optionsxpress view as I regard them as the experts. Please note that I am not arguing with the experts here, it is certain Elite members that are doing so, and continue to do so, even when multiple professional people all tell the same story. Each to his own, I guess. Cheers.
Derivman
 
Quote from anti ad hominem:

Hmm. Just to be clear, nowhere did I say any of your questions were off topic.

I do still wonder what your response is to the clarification of the statistic regarding the percentage of options which expire worthless? Was this not of as much interest to you, given that it disproves your 'well backed' assertion, as a link to an article by a member of the media?

Now, I am not in the business of belittling people who exhibit a genuine desire to learn. Much of the time I don't like the tone here either, but I will tell you what - whenever I have read something about option or market theory by one of the experienced traders here and checked it with some resource that I knew to be irrefutable, it has rarely been incorrect. There are many many traders here who know absolutely what they are talking about, esp wrt to the rudimentary subject matter covered in this thread so far.

The poor tone notwithstanding, you must credit that it is very frustrating when someone who claims to know very little about a topic asks questions & is answered in good faith by people who do, get's true and correct information to those questions & then argues. Every time someone has presented a proper answer to you, your response has been to take exception to the tone in which it was delivered. With respect, it is not anybody elses responsibility to prove wrong whatever fallacies you may have taken under your belt so far.

Anyway, after 5 years of options trading full time I can reliably answer your question about whether a new trader should begin with buying or selling options:

Learn to do both; and the circumstances underwhich you should do either & whether it be separately or in combination. Looking for compelling reasons to do only one over the other will send you on a wild goose chase, potentially lose you a lot of money and you will miss things of true educational value. Knowing options theory, synthetics etc is critical to being a proficient trader. It is the basis from which you will make your informed, practical decisions.

The CBOE education centre is a fantastic resource & you can be assured of the quality of the information & the instructors who contribute there.

I also advocate spending money on your education, though many here do not. In my experience doing so accelerates the learning curve. Market Makers have to 'pay' their tuition, it gets them up to speed quickly, so I don't see why I shouldn't also. Whether you take on a mentor or do seminars, is up to you. There are good ones out there, just do your research.

Lastly, have as much respect for what you are being told by those more experienced than you, as you expect to be shown as a new comer and things will go faaaaar more smoothly.
More...

Thanks for the reply anti ad hominem. Your comments are noted and I apologize if I mistook your meaning from your last post in relation to you saying that my posts were off topic. Your advice, in my opinion, is very good and sound advice to all aspiring traders. I will not say too much now as I will be posting a reply to tc5 shortly, and that reply will clear things up a bit, Cheers.
Derivman
 
Quote from TraderMojo:

You have obviously not read the thread.

Derivman is another alias for someone that has been banned and removed from ET and trade2win several times before. It probably took him by surprise how quickly he got banned from ET so now he is doing this "profuse apologizing" act.

He is proceeding to lure newbies in with his false premises so that he can then sell his services and push his website: www.citybullsh#t.com

I'll cut to the chase to save Derivman the long-winded charade:

1- Sell options because there is an inherent advantage to doing so.

2- Options is not a zero sum game. The advantage is with the option seller due to time decay.

3- More options expire worthless. This is true because John Summa says so and he's written a book so can't be wrong. Therefore selling options has an advantage.

4- Make sure you choose a broker who isn't going to automatically liquidate your position in a margin call situation when a black swan occurs. IB are no good in this respect. If you have a few dys to meet the margin call then the market will have recovered. Besides, you can always just keep rolling your options to the next month out.

5- Sell options on commodities as they have better margin treatment and they are overpriced so there is an inherent edge to selling them. Don't tell too many people otherwise hedge funds might find out about this consistent an persistent overpricing and then they too will sell these options and drive the price down thus eliminating the edge for me and you.

6- Only the minority make money and in options it is only the minority that know about the advantage of selling options.



If you had read the thread you would know that Derivman believes that options are not a zero sum game. Do you agree with him?
More...

TraderMojo, this is your second or third time making silly and ridiculous acquisitions about some trade2win members and citybulls site. If you make one more I am going to report you to the mods for trying to derail this thread. You are free to stay if you like, but you must change your bullying habits and mockery. This is a fair warning, and I will not be replying to you the next time it happens. Cheers.
Derivman
 
Quote from TraderMojo:

You have obviously not read the thread.

Derivman is another alias for someone that has been banned and removed from ET and trade2win several times before. It probably took him by surprise how quickly he got banned from ET so now he is doing this "profuse apologizing" act.

He is proceeding to lure newbies in with his false premises so that he can then sell his services and push his website: www.citybullsh#t.com

I'll cut to the chase to save Derivman the long-winded charade:

1- Sell options because there is an inherent advantage to doing so.

2- Options is not a zero sum game. The advantage is with the option seller due to time decay.

3- More options expire worthless. This is true because John Summa says so and he's written a book so can't be wrong. Therefore selling options has an advantage.

4- Make sure you choose a broker who isn't going to automatically liquidate your position in a margin call situation when a black swan occurs. IB are no good in this respect. If you have a few dys to meet the margin call then the market will have recovered. Besides, you can always just keep rolling your options to the next month out.

5- Sell options on commodities as they have better margin treatment and they are overpriced so there is an inherent edge to selling them. Don't tell too many people otherwise hedge funds might find out about this consistent an persistent overpricing and then they too will sell these options and drive the price down thus eliminating the edge for me and you.

6- Only the minority make money and in options it is only the minority that know about the advantage of selling options.



If you had read the thread you would know that Derivman believes that options are not a zero sum game. Do you agree with him?
More...

TraderMojo, as I have just done my last post to you and you have not read it yet, I will refrain from contacting the mods. At least on this post your last comment was acceptable, so please keep up that approach and I think we will not have any more difficulties. Cheers.
Derivman
 
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