Let's talk about our returns. Got any?

[murray t turtle]

Quote from Adamoptions:

As of late there seems to be a lot of negative comments on this board about options. To set the record straight, is any one out there actually, consistently, making good money with options? Please be specific - Does any one trade their OWN account using options to make a living? If you have traded over 2 years, what are your returns?

I'll go first. I haven't made a dime. I've traded $35,000 for 6 months and I'm behind $1300.00. I'm optimistic that I will eventually learn enough to beat the indexes on a regular basis.

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The reason many traders prefer stocks over stock options;
especially downtrends like AMR tend to be smoother in the stock . The stock option trends much rougher, more complex, %gains may come in a much smaller, tricky time frame.

In a bull market,might want to mention there is a small group of hard working leaders ,generally ages 30-65-75 + years old people that do real well.

Part of that may or may not include stock options.



Charles R. Schwab, SCH, age 65+ did real well this year .Its a matter of public record-''in the money'' stock options.Looks like investment time frame for options more than trading options.

Adamoptions;
Could mention the SCH amount , like i said most businessman won't share thier losses or gains with you.

I am returning to QQQ stock options lately.Uptrending directional bull market looks good this year.

Medium time trend,like below 50 day moving average,looks good like a polar bear trend, on QQQ & SPY underlying. DIA still looks bullish,uptrending on both 50 day moving average and longer.

 

[rrisch]

"as i said before, a famous options guy told me he didn't know of any retail customer consistently making money from options".

So why was he an options guy? A claim that people can consistently make money when they manage it for other people, but can't do it in their own account, defies logic.

However, I've heard comments, from more than one famous options guy, that just buying and then selling unhedged calls and puts doesn't usually work. In fact Natenberg, says in his book, page 127, "The majority of successful option traders engage in spread trading". Probably 95% is more like it.

 

[Trajan]

Quote from rrisch:

"as i said before, a famous options guy told me he didn't know of any retail customer consistently making money from options".

So why was he an options guy? A claim that people can consistently make money when they manage it for other people, but can't do it in their own account, defies logic.

However, I've heard comments, from more than one famous options guy, that just buying and then selling unhedged calls and puts doesn't usually work. In fact Natenberg, says in his book, page 127, "The majority of successful option traders engage in spread trading". Probably 95% is more like it.

Wow, a qoute from a specific page, impressive. It is also very true.

 

[timytime]

Back in the 80's, I use to trade 100 to 300 contracts per day paying high commisions while I was a broker. I had some good months and bad but bottom line I lost mucho amounts of money. The basic problem was that I did not have a large enough account to short as much as i wanted.
I will repeat this stat, If you buy options (long only) there is only 1 way you can make money...... the stock or index must advance. Being short, there are 2 ways you can win..... the stock/index stays flat or declines. As you can see, the odds favor the shorts which is why 90% of all options expire worthless. Therefore, the longs have a massive bogey to overcome and trading should be limited to special situations only. Obviously, if you want to try to make a living in the options market you must trade from the short side 90% of the time.

 

[resinate]

Quote from timytime:

....As you can see, the odds favor the shorts which is why 90% of all options expire worthless. Therefore, the longs have a massive bogey to overcome and trading should be limited to special situations only. Obviously, if you want to try to make a living in the options market you must trade from the short side 90% of the time.

Or not hold till expiration. Certainly more than 10% of options do not travel on a straight path down to zero....

Anyway, how many people on this site are really buy and hold to expiration type traders? I bet not many.

 

[Ninja]

Quote from timytime:



...

I will repeat this stat, If you buy options (long only) there is only 1 way you can make money...... the stock or index must advance. Being short, there are 2 ways you can win..... the stock/index stays flat or declines.

...

How about buying puts?

 

[resinate]

Quote from Ninja:



How about buying puts?

He is referring to buying, as opposed to selling, puts or calls.

 

[timytime]

Quote from resinate:



Or not hold till expiration. Certainly more than 10% of options do not travel on a straight path down to zero....

Anyway, how many people on this site are really buy and hold to expiration type traders? I bet not many.

Of course you are right, very few hold to expiration, My point is the odds of what you are up against. If premium did not exsist in options, I would be trading options to this day. However, option sellers would have little reason to play the game.

 

[Ninja]

Quote from resinate:



He is referring to buying, as opposed to selling, puts or calls.

Thanks. I thought he meant advancing = increasing. Now I understand that advancing just mean the direction of your favor, which in case of long a put would mean decreasing, right?

 

[EliteThink]

Options sellers should be doing fairly well right now. We made 10% last month and are up 6% so far for august.