Let's talk about our returns. Got any?

sle · May 20, 2003

Quote from cvds16:

This is the strangest quote i have seen in a long time. There are people out there who make money trading derivatives consistantly without being part of some larger corporation or being on the floor.

Is'nt it good to be sick - I can sit and chat on the internet without a worry in the world. In any case, I meant to say that I have yet to hear anyone making serious money (we are not talking 100K a year) trading their OWN money. As soon as someone opens a hedge fund - well, they are most probably not trading their own money and it is likely that they have some X millions under management. They are a corporation then. Otherwise, as you probably know, most liquidity problems persist longer then the traders can stay solvent. I have seen someone trade options from their home and make a good living before 9/11 - he was writing deep OTM puts on S&P500

hardrock375 · May 20, 2003

Quote from iceman1:

I would also add that it takes time to get a feel. It is also well-advised to stick to trading options on the same equities so as to learn their "personality" and the "habits" of it's primary MMs and large players (so to speak) and come to learn most 'typical' arb action/pinning and the like into each expiry. For example I trade MRK options over and over again for years, and do very well 75-80% of time.

Iceman1, I agree 100% with the above statements. Although, it is that 20-25% that gets you...

Trajan · May 20, 2003

Quote from sle:

Is'nt it good to be sick - I can sit and chat on the internet without a worry in the world. In any case, I meant to say that I have yet to hear anyone making serious money (we are not talking 100K a year) trading their OWN money. As soon as someone opens a hedge fund - well, they are most probably not trading their own money and it is likely that they have some X millions under management. They are a corporation then. Otherwise, as you probably know, most liquidity problems persist longer then the traders can stay solvent. I have seen someone trade options from their home and make a good living before 9/11 - he was writing deep OTM puts on S&P500

I wouldn't disagree but many MM on the floor never make that kind of many either. Also, there are some very good reasons that the business has been trending, sharply I would say, towards large groups and banks. This is not easy and there isn't a lot of edge.

bone · May 20, 2003

Still looking for the receipt. May have to take store credit.

iceman1 · May 20, 2003

Quote from hardrock375:

Iceman1, I agree 100% with the above statements. Although, it is that 20-25% that gets you...

It doesn't "get you" if you manage your positions well as any good trader "should"

... such that those 20-25% are not elephant-sized losses while you took 80% of bird-sized profits! :eek:

Ice

Swipe · May 20, 2003

Quote from nitro:

metooxx takes a smidgen out of the options market.

nitro

whats a smidgen?

cvds16 · May 21, 2003

Quote from sle:

In any case, I meant to say that I have yet to hear anyone making serious money (we are not talking 100K a year) trading their OWN money.

In a general sense you are probably right (allthough I personally know one big exception to this), and the example you are giving is rather typical I'm afraid of some people looking for a quick buck in options. But then again more than 95% of the population never make that kind of money in any job.

PuffyGums · May 21, 2003

Quote from Adamoptions:

Thanks for the advice, but you haven't addressed the question. Simple question, don't be shy - Is anyone making money? Please be specific and tell the dollar amount of your trading account devoted to options and what percentage of return you generate from trading options.

All the best traders I've run into all plead poverty.

Our exchange (the wonderful Minneapolis Grain Exchange, the greatest exchange in the world) had a members' dinner.... free drinks and all. So what did these guys do after? Go to bar and drink some more. Naturally the talk got around to how much people made. One BSD after another swore they were barely making it. Then some Einstein got wondered how it was possible that no one was making money. Everyone chuckled and stopped asking how much money they were making.

A real trader will never answer that question straight.

Trajan · May 21, 2003

Quote from cvds16:

In a general sense you are probably right (allthough I personally know one big exception to this), and the example you are giving is rather typical I'm afraid of some people looking for a quick buck in options. But then again more than 95% of the population never make that kind of money in any job.

The funny thing is he mocked Metooxx for being pithy. Whomever Metooxx is, he advocates finding a low tax scheme to help multiply your profits. It seams like very sound advice. Depending on how the current tax legislation comes out(plus my end of year P&L), I may follow it.

Adamoptions · May 21, 2003

Puffygums said "A real trader will never answer that question straight."

Interesting reply. It's always been my opinion that most people aren't successful at trading and instead of not telling the truth, they simply opt to tell you nothing and let you draw your own conclusions.

But you are talking about people who you feel are successful. Why do you suppose they would not want to discuss it? Human nature typically demonstrates that when someone does something well, they want to tell everyone. Not to mention the fact that a successful trading record is a very valuable thing. Why do you suppose real traders do not discuss their results more candidly?