How come you're usually short?
Schadenfreude Warning: "Karen the Supertrader"
- Thread starter Niten Doraku
- Start date
How come you're usually short?
lol! "Hope" is not a strategy.
We all hope, to some extent. -- as we wait, and sit, and just watch the market move.
But hopefully, you have more of a somewhat educated and predictable viewpoint and foresight -- not some 50/50 blind casino gamble.
Many books I read, every tastytrade backtesting, Karen, some ETers said don't go long, sell options for premuim like running an insurance company.... How can they ensure not to get wipe out and you said they sometimes need to go long?
I am really not talking about my own trading style.
Likewise, I won't speak of my own trading style either and we'll focus on this approach specifically. If these short volatility strategies run the risk of wiping out, what exactly is it about the Tastytrade backtesting and insurance business analogy that has you convinced that this is an appropriate alpha-generating approach?
Have you run backtests of your own? If I flip an unfair coin and show you that 8 out of 10 times one side favours another, what would you do with that information? That's what short vol only strategy peddlers are trying to sell you.
lol! "Hope" is not a strategy.
Does that mean you're not going to invest in my fund, Lucky Jack's Hot Hand Capital?
Look at Karen in the videos, you would think she would be the last person on the planet to join the dark side and start placing fraudulent trades. She doesn't look like she lives the bling lifestyle. I think she must have started to believe the Super Trader Hype and couldn't accept she wasn't a Super Trader and tried to trade her way out of it. You would think a 66 year old accountant would have more sense. Unbelievable, doesn't look good for Tasty Trade. Makes Tom and Tony look like right muppets.
I think what happens in a lot of these cases is like many on ET, people really truly sincerely believe that selling premium works and its easy. I have met many people in my life who are extraordinarily intelligent that get fooled by the confirmation bias (google it). It's a very powerful drug. And then when it doesn't work, you panic. In the case of Karen, you start thinking about your reputation, your legacy when you get to a certain age, etc. If she was close to the investors in the fund you have personal issues you have to deal with.
I've always asked this question on ET and "rarely" get a satisfactory answer and this in regard to any strategy one chooses to employ and that question is, if what you are doing is pretty simple and straightforward, why isn't everyone doing it? Do you guys really honestly believe that firms like Goldman hire quants and spend billions to find alpha just for their own health? Hell why doesn't our government do it and pay off our debt? Why doesn't Bill Gross, or Buffet or Soros do it? Do these guys just get their rocks off just by making it harder? Real alpha is very allusive and very hard to obtain. It's not simple and it's not straightforward.
I've always asked this question on ET and "rarely" get a satisfactory answer and this in regard to any strategy one chooses to employ and that question is, if what you are doing is pretty simple and straightforward, why isn't everyone doing it? Do you guys really honestly believe that firms like Goldman hire quants and spend billions to find alpha just for their own health? Hell why doesn't our government do it and pay off our debt? Why doesn't Bill Gross, or Buffet or Soros do it? Do these guys just get their rocks off just by making it harder? Real alpha is very allusive and very hard to obtain. It's not simple and it's not straightforward.
Strategies tend to be simple but paradoxically they are very hard to find.
They are things developed and refined over many years of hard work.
Every trader is on a different personal journey.
They are making money some other way.
Sure, what Bill Gross does is very simple, buys cheap yield and sells expensive yield along the curve. Easy peasy. Sure there is a ton of calculus involved but we'll just leave that part out of for now. LOL. Buy low, sell high. Even a monkey can do it.
Karen was not on a journey. She was an accountant that wanted a richer lifestyle. Somewhere along the line she bought some book "how to make easy money selling options" and she bought into it. Started a fund, fell victim to confirmation bias. Started taking losses and then went on a journey to protect her reputation and her dignity. Her journey came to a dead end. Hopefully it will be a cautionary tale for some here. Most likely not. Because they can "manage risk" better then her and that is their edge....and round and round we go.
Nothing that is pretty simple and straightforward is going to make money for any real length of time. Besides when you mention those entities, you are assuming you could scale up and have the same rate of return - which is wrong. There are pockets of inefficiencies in the market. We all are hunting for those, exploiting them, and hoping to find some new pockets when the prior ones are saturated/exploited.