Risk reward sucks for options

[Overnight]

On the contrary, there's a very good reason... he's fragile, like the glass menagerie of complex orders he loves touting.

You want to have a good conversation about finance, FFS don't listen to Beck. Go to Stern, Wharton, or Booth!

Conversational flow is being restored. it is a great thing.

 

[poopy]

LOL they know their math... basically he's saying the probability of making profits when buying is 20%, and the probability of making profits when selling is 80%.

Wow, they invented digitals!

 

[wxytrader]

Forget the vocabulary for a moment. Beck/Dest/Poopy (whatever he's masquerading as these days) likes to show off but he's a transparent, one trick pony. He has good knowledge of options but that's it. He's not an educator by any means. And, what really gets him off is a feeling of superiority. Ignore him.

Natenberg is the intro and make sure you have a grasp of multivariate calculus. Move on to Hull but there's time for that (provided you know calc).

And then, as they say, practice practice practice... but with pencil and paper at first; don't use real money you can't afford to lose.

Also learn to swim code... otherwise it'll just be a hobby. A fun hobby, but nonetheless a hobby. No shame in that either.

#nuffsaid

Code what? I don't use rigid trading rules so automating not really an advantage.

 

[spy]

I don't use rigid trading rules

Multivariate calculus, and math in general, involves a lot of rigid rules... so it's a fine line. If you literally want to use pencil and paper, that's OK too. You might be/become a great mathematician. IDK

I'm sure you'll find your niche. I believe in you!

 

[poopy]

Code what? I don't use rigid trading rules so automating not really an advantage.

The dude is trading CFDs and calls you a hobbyist.

 

[wxytrader]

Here is what would have happened with the price drop on Tuesday:

AUG9 111 atm put on Monday was @ 4.87
On Tuesday it would have been @ 9.21 when price was at 103.73
So we have a Pnl of 4.34... not even a 1:1 reward.


Here are the results of the gap up this morning if you purchased a call yesterday.

AUG9 103 atm call on Monday was @ 4.89, and today is @ 8.95
So we have a Pnl of 4.06... again not even a 1:1 reward.

This is best case scenario too lol.

 

[poopy]

Here is what would have happened with the price drop on Tuesday:

View attachment 345324

AUG9 111 atm put on Monday was @ 4.87
On Tuesday it would have been @ 9.21 when price was at 103.73
So we have a Pnl of 4.34... not even a 1:1 reward.


Here are the results of the gap up this morning if you purchased a call yesterday.

View attachment 345326

AUG9 103 atm call on Monday was @ 4.89, and today is @ 8.95
So we have a Pnl of 4.06... again not even a 1:1 reward.

This is best case scenario too lol.

Buying 103 in a cash account will earn you 8-9% based upon current marks (NVDA?). Synthetic digital (103/104 cs) made 30%. The call doubled.

WTF is your point?

 

[ironchef]

God damn that accent is thick as hell. Are you indian bro? Of all the videos on options by many youtubers, you chose this.

@padutrader?

 

[wxytrader]

Buying 103 in a cash account will earn you 8-9% based upon current marks (NVDA?). Synthetic digital (103/104 cs) made 30%. The call doubled.

WTF is your point?

(Yes NVDA)

My point is that buying options suck as the title suggests when you take into account the probability of making profits versus the risk.

 

[wxytrader]

Multivariate calculus, and math in general, involves a lot of rigid rules... so it's a fine line. If you literally want to use pencil and paper, that's OK too. You might be/become a great mathematician. IDK

I'm sure you'll find your niche. I believe in you!

Well I watched a video on multivariable calculus. I went in knowing nothing at all, and somehow now I know even less.