How to be a Guru in 10 easy Steps

Quote from TheBestGuruEver:

LOL

good luck selling your snake oil.
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Plus a new product line: selling Black Swan to novice traders!

Quote from dagnyt:

Yes, it's possible to get assigned on an OTM option,. But if you had read the post to which I responded you will see that in the context of the question, my answer is correct. The situation was described as writing at ATM COVERED CALL and seeing the stock tumble. In that scenario, there is a probability of zero that you will be assigned an exercise notice. That option is far, far, OTM


Mark
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http://www.elitetrader.com/vb/showt...18391&highlight=early+assignment*#post2418391
Quote by dagnyt:

Forget about early assignment if there is no dividend involved.

Sure it can happen, but wishing for an option to be assigned when 'there is plenty of time remaining' and it's slightly in the money, demonstrates a certain lack of understanding of how options work.

Mark
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Quote from TheBestGuruEver:

how are you so sure the reward will be hit...show us the math.
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Here is about Maths:

http://www.elitetrader.com/vb/showthread.php?s=&postid=2072068#post2072068

Quote from MasterAtWork:

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Quote from dagnyt:

CC and NP are the same, regardless of whether the option is American or European.

Being assigned early is NOT a burden. It is nothing to fear, and in fact is often an advantage. BIG EXCEPTION: cash-settled American style options (OEX). It's not a good idea ever to be short those options.

Many times (but not always), when assigned early, you can either

a) buy back the stock and sell the same call with some remaining time premium or

b) sell the stock and sell the same put with residual time premium

If there is nothing appealing to trade, and if the cost to hold the position is a factor, then the position can simply be closed.


But the basic premise: CC = NP (cash-secured) is true.

If there's a dividend involved, there are other considerations, but when priced correctly, the two are still equivalent.

Thank you.

Mark
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Sorry Mark but since maturity can be different for call and put same strike same expiration date, parity doesn't hold.
If parity doesn't hold, implied volty won't be strictly the same for put and call.But would move in a range.
It doesn't mean that risk are higher for CC or NP, just prices can be quite different.

I can write the maths if you want but I thought it was something you already knew.

Check it out and I'm sure you will agree.
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Quote from ET-trollbuster:

no-no OddBall... a much better thread => post example on managing risk from none other than the greatest of them all
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http://www.elitetrader.com/vb/showthread.php?s=&postid=2469031#post2469031

"I will never be a great trader. Why? I really ONLY sell the ES, almost never buy. This has hurt me many, many times."

ouch.. not a good mental block to have in hellacious uptrend since early march. not good at all

now youve got that options stuff flogged by a mile. no worries mate, youre welcome. glad to be of servitude when I can
 
Quote from ET-trollbuster:

no-no OddBall... a much better thread => post example on managing risk from none other than the greatest of them all
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The One who has got the most experience above others! :D
 
Quote from OddTrader:

The One who has got the most experience above others! :D
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I just "think" for the first time in 14 years I half 'get it' and for ME the best way to trade is have a wide stop, give it plenty of time, leave it over night, over the weekend, etc...and trade very little.

here is the problem. if my next trade is a loser for say 30-ES points or 15k then the average usually isn't great. I know what you're thinking....don't risk as much on the next one. tried that, failed worse.

tough game, but i'm glad this one is working out nicely.

**

BWAHAHAHAHAHAHAHA!!!!!!

EPIC, EPIC, EPIC COMEDY!!!!!!!!!!!!!!!!!!!!!!!!
 
Quote from TheBestGuruEver:

3. you THINK you teach traders how to manage risk, but you are likely doing it so wrong that a monkey saying "cut losses short, let losers run" is just as accurate.
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Thanks to ETT. Here is a Proof of managing risk:

Quote from ET-trollbuster:

http://www.elitetrader.com/vb/showthread.php?s=&postid=2469031#post2469031

"I will never be a great trader. Why? I really ONLY sell the ES, almost never buy. This has hurt me many, many times."
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Quote from ET-trollbuster:

http://www.elitetrader.com/vb/showthread.php?s=&postid=2469031#post2469031

"I will never be a great trader. Why? I really ONLY sell the ES, almost never buy.
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Do you think he or his students can do a better job than other professional Sellers like Max? :D

http://www.elitetrader.com/vb/showthread.php?s=&threadid=134455&perpage=40&pagenumber=15

Quote from oraclewizard77:

I was a little bored so reading this thread, and noticed that someone mentioned that Max, a pro, has been doing this for years and making money, so I guess it shows even if you are one of the best, eventually, this strategy by itself causes wipe out. This is from http://www.autumngold.com/Advisor/Statistics/cta_profile.php?id=9



Principal Max G. Ansbacher
Trading Strategy Option Writer / Stock Indexes
2008
2007
2006
2005
Month Return YTD Assets
Jan -4.50% -4.50% $113,000,000
Feb -1.70% -6.12% $96,000,000
Mar -5.10% -10.91% $93,000,000
Apr 0.85% -10.15% $75,000,000
May 1.05% -9.21% $70,000,000
Jun -0.70% -9.85% $70,000,000
Jul 0.01% -9.84% $55,000,000
Aug 1.38% -8.59% $55,000,000
Sep -27.95% -34.14% $40,000,000
Oct -11.85% -41.95% $20,000,000
Nov 0.62% -41.59% $18,000,000
Dec 2.54% -40.10% $14,000,000
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