Options.,... Argh... no more!!

ET180 said:
Selling puts to acquire stock or selling calls to exit a position at a given price makes sense. If there's a stock that I would like to acquire, but not urgently, I would rather sell a put than place a limit buy order for the stock especially if it's close to earnings.
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i don't agree with this logic. If you want to own a stock, it should only be because you think it will go up. Acquiring through selling puts means you will acquire the stock if you are wrong but miss out on the rally that you expected.
 
Plus,unless you are Buffet,9 out of 10x when it gets to your short strike,you really dont want to own it there.. And who wants to be dead right on a stock and make 50bps on some put?
 
smallfil said:
What gets posted on the message boards is just that opinion. Now, there are a lot of good traders on ET. Do I ask them for proof? No. Just based on what they post, I know if the person is a real trader or one of the numerous fake, ET trolls out there. If you have a real understanding of how the stockmarket works, you would understand what a real fellow trader is talking about. If not, you do not know squat. If I was not making monies trading, I would not bother trading, why would I trade? To stoke my ego? I am a self-taught trader who did not have a mentor, learning to trade. I made a lot of mistakes at the start. The profits I put in my pockets is certainly, not imaginary but, believe what you will. You deem something is impossible because you have not done it and have no real understanding of how the stockmarket works. I will be the last person to dissuade you from your false assumptions. The more dumb traders, the easier for those of us, who know how to trade to make monies.
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Do you have the actual trades to back up what you claim as your strategy? If not, then it's nothing. There are good traders on ET that we don't ask for proof but you are not one of them and that's why I am asking for proof from you.

You know what you wrote is unsubstantiated so that's why you keep calling it "opinion" which is fine because that's exactly what it is, opinion. I just don't want people to be misled thinking that your strategy would actually work because it doesn't unless you show us otherwise. That's all I am saying.
 
newwurldmn said:
i don't agree with this logic. If you want to own a stock, it should only be because you think it will go up. Acquiring through selling puts means you will acquire the stock if you are wrong but miss out on the rally that you expected.
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Obviously, if you know the stock will go up then you should not sell puts but instead be buying calls. I never reach the level of certainty where I *know* a stock will rise or fall. There is always some level of doubt. Being right on the direction is hard. Being right on the direction and the timing is really hard.
 
ET180 said:
Obviously, if you know the stock will go up then you should not sell puts but instead be buying calls. I never reach the level of certainty where I *know* a stock will rise or fall. There is always some level of doubt. Being right on the direction is hard. Being right on the direction and the timing is really hard.
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the greatest sin in trading is being right and not earning on it. That’s selling puts on a stock you think will go up.
 
LTCM was a death wish..All the quant firepower in the world,wont save you from 50-1 leverage...

TheDawn said:
Ironically one of the board of directors of LTCM is Myron Scholes, one of the two people who invented the Black-Scholes model https://en.wikipedia.org/wiki/Long-Term_Capital_Management, the most fundamental option pricing model and is a Nobel Price laureate for Economics. This is a guy who basically invented how options are supposed to be priced and the hedge fund that he headed that involved investing in options still ended up in dissolution and bailout. That just tells you how difficult trading options is.
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Greatness doesn't come easy,but I do believe the great ones take directional bets with the underlying or directional option plays with an asymmetric payoff...

That would be in addition to trading Verts/Flys and short vol in a "prudent" size...

Most option traders tend to maximize the likelihood of making money (sell puts) as opposed to maximising returns(asymmetric option plays)..








ET180 said:
Obviously, if you know the stock will go up then you should not sell puts but instead be buying calls. I never reach the level of certainty where I *know* a stock will rise or fall. There is always some level of doubt. Being right on the direction is hard. Being right on the direction and the timing is really hard.
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Factor in that's it's been a 1 way market with one V bottom nanosecond correction and it's,easy to see how he made money...

Unless he's one helluva stock picker,he most likely underformed as most short put strategies do..

TheDawn said:
Didn't expect you would have a trading journal anyway but as long as you clarified that it's just your opinion that you posted and it's not really based on any trading endeavours, I am fine because the way that you stated in your first post, it sounded like that your trading profitable strategy is actually based on some actual trading you did, which is impossible. Options trading is not just about technical analysis, it's also based on math. It is almost statistically impossible to be profitable with your strategy according to how options are priced. So unless you can provide your trading journal to show actual trades, your "opinion" is just that, opinion.

Just don't want people to be misled.
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taowave said:
Most option traders tend to maximize the likelihood of making money (sell puts) as opposed to maximising returns(asymmetric option plays)..
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I'm not sure that is true. All the guys over at WSB seem to be pretty focused on maximizing returns via highly asymmetric option positions.
 
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