that maybe so, but don johnson has consistently beaten casinos using his probabilities. I thinj he was a mathematician of some sort. you should look him up.
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don johnson - blackjack millionaire
- Thread starter crayon851
- Start date
Based on what I've read, his strategy was pure "edge", but it was definitely negotiated by special arrangement...Maybe don johnson's winnings have more to do with luck than probabilities/edge. In a pool of millions of participants you are bound to have someone who defies the odds and wins. The mistake is to assume it is repeatable by others.
You're selling the call spread. So that's, what, make 0.35 to potentially lose 0.5? I am not sure I fancy that, tbh... Is 60% "probability of success" the right terminal odds? Is it the right odds, given the leverage and the resulting path dependency? I dunno...ok so example
TZA @13.50,
IV=0.53
expiration 7 days,
1std: $1
debit spread
sell 13.0 call - 1.64
buy 12.50 call - 1.99
est probability success apprpx 60%?
this seems like good odds no?
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I don't know... Maybe it does and there is some statistical evidence to support such a conclusion. However, all such evidence needs to be taken with a large pinch of salt.sorry i redid the calc,
current info off cboe and bigcharts for nov 28
IV= 0.55
13.60
1std=. 99
e
sell 0.5 std ITM, buy 1 strike under 0.5 std strike.
sell 13.00 call 1.67
buy 12.50 call 1.28
net 0.39 (0.37 after commissions)
proba ility and payout wise, this should net you a profit, in long run no?
so you dont trust the statistical evidence that supports probability?I don't know... Maybe it does and there is some statistical evidence to support such a conclusion. However, all such evidence needs to be taken with a large pinch of salt.
like if theoretically speaking,
if you can collect at min $35 from every spread with a 60% chance and a 40% chance of losing $50, you will come out on top, marginally.
60x35 =2100
40x50=2000
and the reverse probabilities would be used for a debit spread. however, youd have to still factor in the cost of the debit
have you considered this before? on credit spreads, reduce your odds of success for a higher payout?
with 40/60 odds you need at least 0.75 -1 payout vs loss.
Why not just try it? If you dont have the money, try it in a demo account. That's how you will see how it really works.
I trust the statistical evidence, but there's an enormous chasm that separates statistical evidence and profitable trading. Especially in a context where leverage is used.so you dont trust the statistical evidence that supports probability?
like if theoretically speaking,
if you can collect at min $35 from every spread with a 60% chance and a 40% chance of losing $50, you will come out on top, marginally.
60x35 =2100
40x50=2000
and the reverse probabilities would be used for a debit spread. however, youd have to still factor in the cost of the debit
I trust the statistical evidence, but there's an enormous chasm that separates statistical evidence and profitable trading. Especially in a context where leverage is used.
can you explain? are saying that there are other factors to consider, other than the stats behind it?