loss shows how options help define risk...

S

sss12

At the close yesterday my short term parameters/criteria pointed to a lower TEVA. So I went long 10 Dec 16 puts at .71....Totally blind sided by this mornings announcement. With my system an unexpected news/fundamental change is the cost of doing business....

Trade could not have been more wrong. But if I had shorted the underlying 1000 sh at 15.74 I would be out close to $3k right now versus the $710 on the soon to expire option. (yes, I know the underlying could come back down).

Not happy obviously, but I knew I my max risk was defined at $ 710.
 
sss12 said:
I said it HELPS to define it.
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only in working method

without it all defined losses will just pile up as much if not faster than undefined ones


sss12 said:
With my system an unexpected news/fundamental change is the cost of doing business....

Trade could not have been more wrong.
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but in the working method there are no wrong trades... :)

it looks that it was right trade based on your system limitations :)

imho the main risk is in your system limitation and the problem is your system's limitations are extremely risky and imho would not justify what you just explained its high cost
 
qxr1011 said:
only in working method

without it all defined losses will just pile up as much if not faster than undefined ones




but in the working method there are no wrong trades... :)

it looks that it was right trade based on your system limitations :)

imho the main risk is in your system limitation and the problem is your system's limitations are extremely risky and imho would not justify what you just explained its high cost
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Pretty rich not knowing the details of my system, which has positive expectancy and returns over a multi yr time frame.

As I said my post was not meant to be "white paper". Should have know the experts on ET would make WAY too many assumptions. Oh well, Life on an forum....
 
sss12 said:
Pretty rich not knowing the details of my system, which has positive expectancy and returns over a multi yr time frame.

As I said my post was not meant to be "white paper". Should have know the experts on ET would make WAY too many assumptions. Oh well, Life on an forum....
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Noooo, no no no.
Look at qxrs's other posts. :confused:
You won't take offense. ;)
You'll just shake your head...... :rolleyes:
 
qxr1011 said:
just commenting...is it allowed?

or one only wants to hear what he wants hear?
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qwxr -- in all sincerity -- "We are only insulted by those we respect."
This is a forum of/for people engaged in a pretty stressful activity, whose brains tend to be going a mile-a-minute all the time. When they come upon nonsense and non-sequitors, it is annoying, to say the least. But that is because there is a respectful expectation on their part, that various posts -- whether in agreement or not -- make sense.

Something to think about......

[in addition.... since you've been registered here since 2002, I'm betting this isn't the first time you've seen some grating posts directed your way....]
 
tommcginnis said:
qwxr -- in all sincerity -- "We are only insulted by those we respect."
This is a forum of/for people engaged in a pretty stressful activity, whose brains tend to be going a mile-a-minute all the time. When they come upon nonsense and non-sequitors, it is annoying, to say the least. But that is because there is a respectful expectation on their part, that various posts -- whether in agreement or not -- make sense
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well, my friend, there is an ignore feature on this forum , one can use it to relief himself from all the nonsense especially if there is definite people that spread it

good luck with the stressful activity
 
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