The problem with your GOOG IC trade is that you don’t have an edge, despite 8 pages of conversation. All we know from what you have said is that ‘IMHO GOOG will not swing 20%’ is your entry edge, and all we know about your exit edge is that you ‘will not hold trade until expiry’. Without an edge your trade doesn’t have a positive expectancy, and that’s what some people here have been trying to tell you.
Your edge could be many things, Technical – eg my analysis of the recent trading pattern shows the stock is likely to range trade…, Fundamental – eg my DCF model tells me the stock is accurately priced by the market now…, Flow – eg my research into holidays flows shows that buys & sells are very well balanced at year end…, Earnings – eg my analysis into the 4Q results says there will be little to surprise the market… …and therefore I think the stock will be more range-bound than expected and therefore GOOG IV is mispriced. Or any other analysis you could do, I don’t care, I just made these up. The point is you need to be convinced the market is mispricing IV.
Otherwise, you are randomly doing GOOG IC trades where its likely that IV is fairly priced, and therefore overtime your strategy will lose money after trading costs and occasional large cash move.
For sure the people on ET have to have thick skin, because at times the remarks can be impolite. But its my hope that they are usually intended to be taken lightly and are funny for everyone. There’s really no need to be insulting. Especially to a guy like Kim Klaiman. He’s offering good stuff here; it pays to listen to him and many people do. If what he’s written here isn’t enough, then read his other posts, check out his website, follow his trades, and look at his track. Really, enough said.
Being insulting also drives away other people who may want to contribute and help the thread. If a thread gets too nasty then some people won’t bother and that’s a big loss. Robert Morse participates in most options threads and it sticks out that he hasn’t been on this thread. He was an options market maker for many years, and knows this stuff inside out. For example, he could explain to you why your suggestion of ‘taking the other side’ of your GOOG IC is not of interest to most people on ET.
Your edge could be many things, Technical – eg my analysis of the recent trading pattern shows the stock is likely to range trade…, Fundamental – eg my DCF model tells me the stock is accurately priced by the market now…, Flow – eg my research into holidays flows shows that buys & sells are very well balanced at year end…, Earnings – eg my analysis into the 4Q results says there will be little to surprise the market… …and therefore I think the stock will be more range-bound than expected and therefore GOOG IV is mispriced. Or any other analysis you could do, I don’t care, I just made these up. The point is you need to be convinced the market is mispricing IV.
Otherwise, you are randomly doing GOOG IC trades where its likely that IV is fairly priced, and therefore overtime your strategy will lose money after trading costs and occasional large cash move.
For sure the people on ET have to have thick skin, because at times the remarks can be impolite. But its my hope that they are usually intended to be taken lightly and are funny for everyone. There’s really no need to be insulting. Especially to a guy like Kim Klaiman. He’s offering good stuff here; it pays to listen to him and many people do. If what he’s written here isn’t enough, then read his other posts, check out his website, follow his trades, and look at his track. Really, enough said.
Being insulting also drives away other people who may want to contribute and help the thread. If a thread gets too nasty then some people won’t bother and that’s a big loss. Robert Morse participates in most options threads and it sticks out that he hasn’t been on this thread. He was an options market maker for many years, and knows this stuff inside out. For example, he could explain to you why your suggestion of ‘taking the other side’ of your GOOG IC is not of interest to most people on ET.
