pardon me, but can you elaborate that? I'm fairly new to all this.
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TAPE READING (chat room cont.)
- Thread starter shortseller
- Start date
pardon me, but can you elaborate that? I'm fairly new to all this.
Quote from Maverick74:
There is no edge in stocks. You are trading against auto-bots. And you are paying a fortune for that privledge. Makes absolutely no sense. With options, once you learn how to trade volatility, you can trade any product any in the world. They are all the same. Therefore you can seek out the most volatile and liquid products.
Are you saying the only way to trade an increase/decrease in volatilty of a stock is through a synthetic? Could you elaborate?
Quote from IV_Trader:
just in the last couple of days ( in very slow reporting period) so many stocks had a huge intraday swing , SNDA , DELL , BEBE , CRM are just few to mention. A 15% intraday swing is not enough ? With vix at almost all times low ?
ya, it's earnings season. that's where i make my money. volatilty is slowly dyin' tho, compare this crap to 02/04 where u had at least 5 of the most actives [liquid stuff where u can leverage a lot] trendin' all day 10-20%+. all am sayin' that it aint easy no more, a couple of dumb mistakes and u are done, there are not a lots of opportunities, u gotta be very selective. mkt has begun deterioratin' badly just before 05 when vix plunged below 10 and never looked back. bebe was allright of course, same crm..great moves but those are 2 stocks and if u miss one u got nothin'. this is all in perspective.
Quote from FastandFurious:
pardon me, but can you elaborate that? I'm fairly new to all this.
I'd like to hear an elaboration as well. I don't have a clue as to how Mav's trading options, but I assume it involves complicated math and is not as accessible to the average learning trader as tape reading. I'd be glad to be wrong though.
Quote from FastandFurious:
pardon me, but can you elaborate that? I'm fairly new to all this.
By trading volatility, I'm refering to how options traders trade. Even if they are directional traders, all option traders are trading volatility in some fashion. You are either trading pure vega in the back months or gamma in the front months. Both require you to make a bet on volatility either through the implieds or the spot.
That does not mean I do not take directional bets, it just means direction is secondary to volatility. It's not that volatility is easier to trade (many think it is), it's just that it's more lucrative and has more defined risks.
So therefore if you are going to trade volatility, that would imply that you would be seeking out the most volatile instruments to trade. And stocks simply are not volatile enough.
I hope that answers your question.