Wrong. Markets are never irrational. Traders are irrational.
I told you guys...closing positions for a loss is for fools.
- Thread starter wxytrader
- Start date
Wrong. Markets are never irrational. Traders are irrational.
If only Keynes were alive today so that you could school him some.
Ie. "The Do-Nothing Risk Management Method™" of mine was posted on Feb 12, 2024
I since then updated it a little bit: sometimes adding some cheap OTM LongPuts turns it to a spread that protects against total loss by capping the loss. I apply it when an high-impact event is expected to happen...
Hey! I was talking about the the no risk management approach like last year.
Sounds like a winning play in an uncertain environment.
Good Morning wxytrader,THIS is why I never close a trade for a loss.
You must be a really a good trader. This mean you never take a loss on a trade. You must have a few million dollars in your account.
Congrats to you.
I understand @wxytrader very well: he simply means to keep the option till the expiry, the very normal nature of an options trade, BECAUSE all risk calculations before placing the order are normally and usually done for the expiration date itself...
And the reason is this: only a simple calculation is required for finding the outcome of the trade for any possible stock price at expiry. This is not the case for any days before the expiry: then one needs to apply higher maths using Black-Scholes etc.
And the reason is this: only a simple calculation is required for finding the outcome of the trade for any possible stock price at expiry. This is not the case for any days before the expiry: then one needs to apply higher maths using Black-Scholes etc.
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Hello Quanto,
Just so I understand, if @wxytrader still holding the trade until expiry and was PnL was negative, he lose on the trade correct?
Thank you,
(2008) Lambo
I was only risking $5400 in the trade...well technically that's the maximum risk... statistically risking 1SD and that's only if you close the position.