Not if the premium collected is greater than the alternative capital gain from being long stock.
Options.,... Argh... no more!!
- Thread starter Jdesey
- Start date
Not if the premium collected is greater than the alternative capital gain from being long stock.
before I dive into the deep end of the pool
1) do you trade delta neutral to the stock when you sell premium?? 50 delta put,sell 2, .25 delta sell 4 or do you stick to 1 put for every hundred shares you want to own???
2) have you backtested your "beliefs" and if so,do you use an IV% filter???
1) do you trade delta neutral to the stock when you sell premium?? 50 delta put,sell 2, .25 delta sell 4 or do you stick to 1 put for every hundred shares you want to own???
2) have you backtested your "beliefs" and if so,do you use an IV% filter???
He is not shorting puts. He's long in DITM options with 3 month out DTE. Unless you get ridiculous unexpected volatility unaccounted for by the option premiums that you paid for and the possibility of that happening is very low as most of the time, options are well priced exactly reflecting its expected i.e. implied volatility, there is no way he's making money. He's stated himself that his win rate is only 55% and that's the same win rate as tossing a coin and that's not what I would call being profitable. And the fact that he's refusing to show trade journals or even just some trades even to back up what he's talking about just confirms what I suspected.
But he's qualified his posts as "opinion" which is fine. I just don't want people to be misled by his "opinion".
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Yeah but you would think that a guy that invented the option pricing model would know how options would work, even with leverage. I mean this is the guy who told us how options are supposed to be valued according to how they would behave. And he himself would lose money trading in them? We are all trading options according to what he taught us for chrissake.
I think I was referring to someone elses post which I can no longer find.I cant find the post you quoted either..I see the trade you are referring to is being long the "guts" of a box...Seems like a very high win rate for essentially being long strangles..
Im guessing you never worked at a major IB....
Most of the quants as brilliant as they may be,are a bit "disconnected" from actual trading/reality ,while the head the trader is the King of the Jungle,in this case Meriwether...They make the calls,not the quants..
Meriwether was a god like figure at Solly and could do no wrong...or so he thought...
Most of the quants as brilliant as they may be,are a bit "disconnected" from actual trading/reality ,while the head the trader is the King of the Jungle,in this case Meriwether...They make the calls,not the quants..
Meriwether was a god like figure at Solly and could do no wrong...or so he thought...
He's not longing guts either. His exact post stated that he buys calls and puts in the direction of the trend. At first I thought it's a gut strategy as well which given the high unexpected volatility that we are having right now it may have some chance of being profitable. But he's longing them "in the direction of the trend" so to me, he is longing DITM singles. If you are longing guts, how can you be doing it "in the direction of the trend"? Guts is what you do when you have no or don't care about any trend. He stated also in his post that his win rate is about 55% which makes sense for singles. And even for guts, it's only recently that there might be some profitability due to the highly unpredictable situation right now provided that he's doing the right underlying. Before now, he would be losing even more money with guts; his win rate wouldn't even come close to 55%.
Anyway without trade journals or even some showing of actual trades, I am going to dismiss it as just "opinion" as he qualified it himself.
You can have delta by being long the guts of a box..Think about it.You tilt the deeps to have the desired Delta.A box is flat,the guts/wings most likely have delta
If i read it correctly,he is long a DITM Call and Put in the direction of the trend...
Essentially long the strangle..Not sure why you would want to trade the deeps,but I cant find his post..
Not for me
If i read it correctly,he is long a DITM Call and Put in the direction of the trend...
Essentially long the strangle..Not sure why you would want to trade the deeps,but I cant find his post..
Not for me
Hey Taowave I see you mention a bit in your posts about doing ratios. Are you going long closer to the money and short the wings or like a backspread? Do you usually do 1:2 or something else?
Thanks