Is there any empirical study available about the profitability of option sellers vs option buyers?

Maverick74 said:
Well, LJM also buys options too so they are not a great case study. They also had a 67% drawdown in 2008 that would have wiped most investors out meaning they would not have enjoyed the fruits of the recovery made after which is often the case.
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Mav,
Not sure where you got 67% it actually was 47% in 08. Obviously steep, but survivable if ones knows what they are doing. They actually are a great case study how an option seller can steadily make money and survive black swan events. They have been in business long enough to prove it.
 
RedDuke said:
Mav,
Not sure where you got 67% it actually was 47% in 08. Obviously steep, but survivable if ones knows what they are doing. They actually are a great case study how an option seller can steadily make money and survive black swan events. They have been in business long enough to prove it.
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The number is on their website. That large of a drawdown is not acceptable especially when people are paying you to avoid them.
 
Maverick74 said:
The number is on their website. That large of a drawdown is not acceptable especially when people are paying you to avoid them.
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Risk/reward go hand in hand. I always use them as an example when I hear that ALL options sellers are usually gone within max 7 years. They are still here and managing 100s of millions.
 
RedDuke said:
Risk/reward go hand in hand. I always use them as an example when I hear that ALL options sellers are usually gone within max 7 years. They are still here and managing 100s of millions.
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Well, let me respond to this. It's a lot easier to hang around when you are doing it with other people's money. The fees really help. For a retail trader, it's really hard to come back from a 67% hit as you have to more then double your money selling 5 delta crap on leverage. It's just hard. If you can get away with it by taxing investors more power to you. And I'm not sure how deep you have looked at their numbers but a large part of their money under management is theirs which they collected from the fees. At one time only 5% to 10% of the money was even outside money. Again, good work if you can find it as the saying goes. They are not the only ones doing it.
 
Maverick74 said:
Well, let me respond to this. It's a lot easier to hang around when you are doing it with other people's money. The fees really help. For a retail trader, it's really hard to come back from a 67% hit as you have to more then double your money selling 5 delta crap on leverage. It's just hard. If you can get away with it by taxing investors more power to you. And I'm not sure how deep you have looked at their numbers but a large part of their money under management is theirs which they collected from the fees. At one time only 5% to 10% of the money was even outside money. Again, good work if you can find it as the saying goes. They are not the only ones doing it.
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oh shit man, Is this dirty little secret Monday? I totally forgot!
 
Maverick74 said:
Well, let me respond to this. It's a lot easier to hang around when you are doing it with other people's money. The fees really help. For a retail trader, it's really hard to come back from a 67% hit as you have to more then double your money selling 5 delta crap on leverage. It's just hard. If you can get away with it by taxing investors more power to you. And I'm not sure how deep you have looked at their numbers but a large part of their money under management is theirs which they collected from the fees. At one time only 5% to 10% of the money was even outside money. Again, good work if you can find it as the saying goes. They are not the only ones doing it.
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Mav, where did you get 67? It was actually 47. But yes, I heard that large chunk of the fund was their money.
 
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