options . . . very hard to make money

[rew]

Quote from sellindexvol66:

lol, no upside as you say in showing gross p/l. suffice to say it's there (lot's spent on living though) but only benefits me.

i am proud especially how well i have done through vol swings since 2008 so i was motivated to respond in a thread that claims it is hard to earn; yes true..is anything easy?

all i am saying is you gave me the road map on a certain strategy that i was interested in and it was all correct. like i said it is not set and forget it, i am at the screen the entire day. i doubt anyone could earn like i do without some brains.

edit: i still can blow up (flash crash i was down 100k unrealized, since earned it back) or get hurt so if anyone earns a lot, i urge you to wire out as much as possible.

anyway i believe in a bit of karma and wanted to thank atticus. i have done so privately countless times too.

atticus is not perfect (lol) but there is no one better in knowledge and willingness to help for free (which i think is nuts).

I don't expect you to give away your edge. And is obvious that succeeding in option trading requires hard work. For that matter, it is also very difficult to make money consistently trading futures or stocks. And millions of people with IRAs and 401Ks have learned how hard it is to make money only going long on stocks.

Now if you've had anywhere near the success claimed by atticus I am more than merely impressed. You must be compounding at over 15% a month. My problem is that even if I had a crystal ball that would let me see the general market direction with, say, 70% accuracy, I don't see how I could make 15% a month shorting vega and gamma without exceeding my margin requirement, or at least occasionally blowing up. I know traders who can consistently make 3 - 5% a month being net sellers of time value. But I'm having trouble even imagining the sort of trades that would push the returns up to 4 times that level.

 

[sonoma]

Quote from rew:

But I'm having trouble even imagining the sort of trades that would push the returns up to 4 times that level.

Leverage.

 

[stoic]

Quote from sonoma:

Leverage.

Leverage auh....

Hmm lets see....If one started out with just $2,000 and made 60% per month...compounded.....in just 5 years that would work out to:

$3.5 Quadrillion.......mmm... at a 38% short term tax rate, the national debt would be wiped out.

go for it...!

 

[newguy05]

Quote from stoic:

Leverage auh....

Hmm lets see....If one started out with just $2,000 and made 60% per month...compounded.....in just 5 years that would work out to:

$3.5 Quadrillion.......mmm... at a 38% short term tax rate, the national debt would be wiped out.

go for it...!

what are we talking about again? are you saying sellindexvol66 is going to wipe out our national debt? and since atticus tutored him, does that mean atticus is going to save america?

 

[sellindexvol66]

Quote from stoic:

Leverage auh....

Hmm lets see....If one started out with just $2,000 and made 60% per month...compounded.....in just 5 years that would work out to:

$3.5 Quadrillion.......mmm... at a 38% short term tax rate, the national debt would be wiped out.

go for it...!

Hey brains those trading well for a living are taking 100's of thousands out a year to live on and pay taxes.

 

[ammo]

Quote from rew:

I had responded:
"I would like to point out that almost all of the "premium" you're selling in this example is intrinsic value, which you capture only if the market makes a large move in the right direction. When people talk about selling premium they usually mean selling time value." ..........response........this is one of many definitions of selling premo...

I So whatever sellindexvol66 is doing, he's not making the kind of trades ammo suggested.

you can keep reading your 300 books and mathematically trying to win,... the big boys have got your system in spades hiring all the math gurus out there and crunching the data,.....figure out the direction this thing is going and capitalize on it,...... the big boys can figure that out but they take days to turn the fleet...... by the way ,they collect ungodly amounts each month on short puts and calls.....,66 figured that out and hedged option wise,..... how to maximize his return with a limited amount of capital,.....you are a barnacle on a ship, .......we all are,.....you dont need 300 million???(pick any number) in return to average 10-15% for your customers....,they do,....sounds like you are thinking,analyzing,way too much,enough that you can take what little knowledge you have of others and make judgements,.....your acct is the big picture,..... not anyone elses,.....and that thought in a nutshell should be guiding your thought patterns.....,you can study all your life on how to build the perfect trading model,..... or you can just figure out a so-so one that makes tons of dough,....the risk will never go away,.....learn to trade out of a position when your wrong,....and you will have nothing to worry about,....don't let your mastery of the science be your excuse for ,......i will make big cash when i figure this one more thing out.....good luck ..rew..i mean that

 

[rew]

Quote from sonoma:

Leverage.

You seem to forget that those who are at their margin limit are already using all the leverage their broker will allow.

 

[sonoma]

Quote from rew:

You seem to forget that those who are at their margin limit are already using all the leverage their broker will allow.

Reg T, position-based margining from your broker is but only one source of capital.

 

[rew]

Quote from sonoma:

Reg T, position-based margining from your broker is but only one source of capital.

Anyone who want's more margin on short option trades than his broker will give him is begging to get blown up. Be prepared to have to sell your house when the bill comes in.

 

[atticus]

Quote from rew:

Anyone who want's more margin on short option trades than his broker will give him is begging to get blown up. Be prepared to have to sell your house when the bill comes in.

Some of you implying that he's using a ton of leverage. I don't get the math you're using as it would be nearly impossible to turn 6k in 200-300k with any significant leverage on naked options under RegT.

The only other trader I know (personally) that produced better number than SIV66 was the German who used knockout options with zero-leverage. There is one other guy from ET that went from 200k to 3MM in short vol as well, but didn't produce the % return, but is obviously also a great trader.

If anything, you should be ecstatic that it's possible, albeit unlikely (to be repeated).