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My option trades for the past 6 months, feel free to ridicule, or offer guidance
- Thread starter thebubs
- Start date
Quote from u21c3f6:
The information above is irresponsible and misleading IMO.
Joe.
You are too kind to Mr T.
The quoted advice is a disgrace.
It's either the writing of an idiot, or more likely the words of someone trying to convince people to buy his system.
Despicable beyond words. Either that or ignorance.
Mark
Quote from dagnyt:
It's also fair to state that long straddles can have a VERY LOW profitable probability as well.
Mark
How do you know that for Events trading using straddles, is there any statistical support?
How about major law suits in particular, I think it can be fairly High probability profitable.
Quote from OddTrader:
How do you know that for Events trading using straddles, is there any statistical support?
How about major law suits, I think it can be bery High probability profitable.
Slow down.
In reply to a comment that straddles CAN (meaning, 'it's possible') be a high profitability game, I responded that straddles CAN (meaning 'it's possible) be a low profitability game.
How can you pick an argument with that?
And in response to your specific idea of 'Events' trading, as you know option prices are pumped for such events, making it even more difficult to succeed.
I never said it was impossible. In fact, I never said it was unlikely. All I said was that it is <i>also possible</i> that trading straddles can be a low profitability - i,e., a money-losing strategy.
So, I'll ask: Are you saying that you believe events trading IS (as opposed to can be) a strategy that has a high probability of being profitable?
If you say 'yes' then I strongly disagree - and that's without statistical evidence.
Mark
Quote from dagnyt:
Slow down.
In reply to a comment that straddles CAN (meaning, 'it's possible') be a high profitability game, I responded that straddles CAN (meaning 'it's possible) be a low profitability game.
How can you pick an argument with that?
And in response to your specific idea of 'Events' trading, as you know option prices are pumped for such events, making it even more difficult to succeed.
I never said it was impossible. In fact, I never said it was unlikely. All I said was that it is <i>also possible</i> that trading straddles can be a low profitability - i,e., a money-losing strategy.
So, I'll ask: Are you saying that you believe events trading IS (as opposed to can be) a strategy that has a high probability of being profitable?
If you say 'yes' then I strongly disagree - and that's without statistical evidence.
Mark
http://www.cluteinstitute-onlinejournals.com/PDFs/508.pdf
"The current study investigates whether abnormal returns may be gained by purchasing a straddle
position prior to a verdict or settlement announcement in a lawsuit. The basis for the hypothesis
stems from behavioral financeâmore specifically, the Overreaction Hypothesis. Using CAPM
expected rates of return and comparisons of 31 lawsuit firmsâ straddle returns, three new straddle
trading strategies are devised. Within the sample of lawsuits, abnormal returns are evident for the
three strategies. The results and their implications support behavioral finance and the
Overreaction Hypothesis and thus refute the Efficient Markets Hypothesis."
Quote from OddTrader:
http://www.cluteinstitute-onlinejournals.com/PDFs/508.pdf
"Overreaction Hypothesis and thus refute the Efficient Markets Hypothesis."
I do not know exactly what the "Overreaction Hypothesis" is, but suspect here it means a natural language claim.
Is it not clear that the market both overreacts and is efficient? Both kinds of actor are present in a crowd.