Crypto investing vs. ETF option trading

Pekelo · May 6, 2022

Here is what I don't get:

We get so many crypto threads here saying Hold! for weeks or months hoping that the advertised crypto would moon in the given time frame.

On the other hand we have an extremely volatile market when using options on ETFs can give you 3-500% return, DAILY. (sure you can't do this everyday, but you get my point) And this is not luck but skill based. And even if you just capture 20-30% profits on a position, that is still way better than the current state of the crypto markets.

So what gives? Why the fundamentally flawed investment advice vs. the skillfully executed trades?

Aren't we a trader's website? Not to mention it is easier to open a RH account then sending money to a crypto exchange.

TimtheEnchanter · May 6, 2022

Well, for one; option trading is not that easy, I do it and I am cursing the fills and moves that I make. Consistently doing 500-percent is not commonplace. You can double your money on one position but that is just a small portion of your account. If you have $200,000 hopefully you are not in options 100-percent of your fund.
Bitcoin is not for trading but conserving value (in theory) but regardless of your view it was good for a person who bought at 17000 just quite recently,let alone earlier.

ET180 · May 6, 2022

Pekelo said:
Here is what I don't get:

We get so many crypto threads here saying Hold! for weeks or months hoping that the advertised crypto would moon in the given time frame.

On the other hand we have an extremely volatile market when using options on ETFs can give you 3-500% return, DAILY. (sure you can't do this everyday, but you get my point) And this is not luck but skill based. And even if you just capture 20-30% profits on a position, that is still way better than the current state of the crypto markets.

So what gives? Why the fundamentally flawed investment advice vs. the skillfully executed trades?

Aren't we a trader's website? Not to mention it is easier to open a RH account then sending money to a crypto exchange.

You can buy some cryptos through RobinHood and I think too many people got burned buying options. Options offer leverage which is why so many people without a lot of money are attracted to them. Those promoting cryptos are also promising big returns (because they have to...no one would buy an asset with substantial probability of going to zero without having tremendous upside potential), but the idea is that you won't lose your entire investment at the next option expiration. The idea promoted is that if you just hold long enough, you'll get back to even and make a lot more.

R1234 · May 6, 2022

Ive been trading ETF options (simple leveraged directional bets) in my HSA account. They are great instruments for an account that has yearly contribution limits and you want to grow it in a hurry. I would not go 100% though for the risk of ruin

The_Krakenite · May 6, 2022

In my registered accounts, I've been buying up ETHY. You're basically buying SPOT Ethereum, while you have a professional money-manager wrapping covered-calls inside of this and paying you dividends while you HODL in your tax-free accounts.

So far, I've gone the un-hedged variety, and dividends are coming in at 9% currently.

Nobert · May 7, 2022

Pekelo said:
Here is what I don't get:

We get so many crypto threads here saying Hold!

People average down. Especialy if they HODL. Easier to dump for those who own the majority. Easier to short.

,,Someone has to buy the damn thing"
- Peter Lynch

Pekelo · May 7, 2022

R1234 said:
I would not go 100% though for the risk of ruin

Sure but you can use a smaller part of your account to get a bigger run. So if you play 10% of account and double up, you still made 10% in a day, and that beats crypto in the current state.

Pekelo · May 7, 2022

Nobert said:
People average down.

You can average down with options too, just don't use daily ones. With the market going sideways and keep bouncing back, averaging down has been a great strategy.

R1234 · May 7, 2022

Pekelo said:
Sure but you can use a smaller part of your account to get a bigger run. So if you play 10% of account and double up, you still made 10% in a day, and that beats crypto in the current state.

In fact that is what I am doing. Allocating about 10% of the account to puts/calls. Compared to buy-and-hope crypto, this is a real strategy and it is proactive.

GotherL · May 7, 2022

Pekelo said:
Here is what I don't get:

We get so many crypto threads here saying Hold! for weeks or months hoping that the advertised crypto would moon in the given time frame.

On the other hand we have an extremely volatile market when using options on ETFs can give you 3-500% return, DAILY. (sure you can't do this everyday, but you get my point) And this is not luck but skill based. And even if you just capture 20-30% profits on a position, that is still way better than the current state of the crypto markets.

So what gives? Why the fundamentally flawed investment advice vs. the skillfully executed trades?

Aren't we a trader's website? Not to mention it is easier to open a RH account then sending money to a crypto exchange.

Trading SPY/QQQ yeah can get you up to 1000% return a day.

Being profitable after one month trading it is another thing.

9/10 traders will probably go bust trying.