Goldman Says "Diversify By Naked Shorting Volatility"!!

[overspool]

Isn't it something like 75% of options expire worthless? Why not sell 'em. Those are pretty good odds.

 

[matador04]

I made 60% YTD selling Vol this year

The more participants the better!

 

[BJL]

Quote from matador04:

I made 60% YTD selling Vol this year

The more participants the better!

actually no, the more participants the less profit you'll make (selling vol)

 

[matador04]

Quote from overspool:

Isn't it something like 75% of options expire worthless? Why not sell 'em. Those are pretty good odds.

Risk of ruin

 

[bt116]

volitility was very high this year. extremely high at certain points. i guess i can buy it that you would get a great return if you had sold the high (i think vix was up around $40 at one point). but selling vol throughout the year would have burned you really bad. any nasty drawdowns? or were you just really good at selling peaks and buying back in troughs?

 

[BJL]

Quote from bt116:

but selling vol throughout the year would have burned you really bad.

exactly, keep that mindset.

 

[matador04]

Quote from BJL:

actually no, the more participants the less profit you'll make (selling vol)

I play nice and like to share the wealth

 

[Bogan7]

Quote from BJL:

exactly, keep that mindset.

Yeah keep buying those worthless options as you might get lucky one day!!

 

[texrex2002]

risky business.

I'd much rather be long volatility.

But someone has to be sellling if I want to buy...

i have made $ on the short side too, but it's hard to rest easy.

I've looked at hedging by buying calls at a lower strike, but it would eat profits to nearly zero...

 

[zdreg]

if you want to be in the business of insurance open up an insurance firm.
you are competing with well capitalized individuals who know how to hedge their positions and maximize return on capital.