The #1 Skill In Selling Options

[ffs1001]

Dunno what you two trolls are excited about. What I said hit a nerve perhaps? LOL And yes, 10% is a lot. If this is what can happen in options trading, people need to know and to be aware of this.

@TheDawn, these two posters (and others on this thread) are trying to show you the way, but you are not listening. And no, you haven't hit any nerve - you like to THINK you have, as if it's some sort of a moral win over others.

Bro, I'm a retail guy - lots of others here are too - and I mean this in the most genuine way:

the reason you are losing money is not because the MM's are screwing you, or that the options market in an unfair game, or that the big nasty institutions are milking us retail, it's because you do not have the experience, the level-headedness, the technical ability, the passion, or the strategy to be profitable. And your biggest enemy - by far - is your negative mindset. You seem be the kind of person who opens a trade expecting it to go wrong, and when it does, it gives you the secondary gain of being validated - "See, I was right, those fucking MM's are screwing me again."

The best thing you can do - and again, I mean this to help you, and not to ridicule - is see a counsellor who is qualified in cognitive behaviour therapy. Or at the very least, buy a book from Amazon. Within two weeks, you will be able to see the thinking distortions that you are a victim of, and then when you read your own posts on this thread, you will see why others have responded in the ways that they have.

Take this post in whatever way you choose - either with an open mind and a willingness to grow; or as a personal attack. Whichever way you do it, good luck.

 

[taowave]

Hey,troll number 1 actually agrees with your main point.Its your presentation/ reasoning thats waaay off..

Trading options is a really tough game. It's brutally hard,and that's coming from an "institutional trader" with 30 years experience who now trades his own money...

Imho,if you aren't starting out at an IB,hedge fund,prop shop or a proven successful mentor, the deck is definetly stacked against you..

But like everything else in life,there are exceptions to the rule.

keep your day job

put the time in, read and backtest ,rinse repeat

Start out small and understand preservation of capital..

Know thyself,comfort levels,tendencies,strengths and weaknesses

Baby steps

Don't think first of all that you guys are retail traders but rather institutional traders so technically you are not really in the best position to judge us considering we are facing completely different cost and budget structure as you. Second, never said MM is my biggest enemy but rather just exposing the fact that options market is rigged with excessive risk that's uncompensated by payoff so if we are acing excessive risk then how's on the other side creating this risk for us? It's not hard to figure out.

Dunno what you two trolls are excited about. What I said hit a nerve perhaps? LOL And yes, 10% is a lot. If this is what can happen in options trading, people need to know and to be aware of this.

 

[TheDawn]

@TheDawn, these two posters (and others on this thread) are trying to show you the way, but you are not listening. And no, you haven't hit any nerve - you like to THINK you have, as if it's some sort of a moral win over others.

Bro, I'm a retail guy - lots of others here are too - and I mean this in the most genuine way:

the reason you are losing money is not because the MM's are screwing you, or that the options market in an unfair game, or that the big nasty institutions are milking us retail, it's because you do not have the experience, the level-headedness, the technical ability, the passion, or the strategy to be profitable. And your biggest enemy - by far - is your negative mindset. You seem be the kind of person who opens a trade expecting it to go wrong, and when it does, it gives you the secondary gain of being validated - "See, I was right, those fucking MM's are screwing me again."

The best thing you can do - and again, I mean this to help you, and not to ridicule - is see a counsellor who is qualified in cognitive behaviour therapy. Or at the very least, buy a book from Amazon. Within two weeks, you will be able to see the thinking distortions that you are a victim of, and then when you read your own posts on this thread, you will see why others have responded in the ways that they have.

Take this post in whatever way you choose - either with an open mind and a willingness to grow; or as a personal attack. Whichever way you do it, good luck.

You need to read my posts more thoroughly before you troll. This is not the first time that you troll before reading my posts:

Directional bets is not any more profitable either because you are limited by theta if you go for short-term. Options is really best for hedging and not for speculation, period because it's rigged always in favour of the dealer just like the casino. It's a venture where when you lose you will always lose more than you win and when you win, you are always limited in how much you can cash out despite the fact that it advertises that your payoff is supposed to be infinite. When you long in volatility where your payoff is supposed to be infinite, you pay up a lot more and you are limited by theta where the dealer changes the game and says I will only pay up when the price moves this amount by this amount of time so even if moves the amount predicted but because it didn't move by that time, the dealer says sorry I can't pay up that much. So then you thought ok if my profit potential is limited by theta, why don't I become the dealer and sell options and limit others' potential profit by theta so that way I don't have to pay up when the price didn't move X amount by X amount of time, then the dealer turns around and pushes up gamma so much that it makes theta move in the opposite direction so it doesn't limit profit potential anymore and the price moves up so much that you are forced to pay up and lose lot more than you gain and the dealer wins again. So it's basically when you are long in volatility, you don't get paid and when you short in volatility, you get fucked in the a$$. Either way you don't get paid and the casino does all the time.

But when you are hedging, it's different because you are not using it to make money; you are using the underlying to make money and options is just a cheaper way to recoup some losses if you are incurring it on the underlying. When the underlying is making money, it's making enough to cover the cost of the options and when it's making losses, the gamma on the options will take over and make the options increase in value for you to recoup the losses. So theta doesn't affect you as much anymore and you are taking full advantage of gamma.

That's what I wrote, according to my own observation and experience and this is backed by academic research so I am not conjuring these things in my head. You don't want to accept this, like I said, either because 1) you are on a winning streak or 2) you are institutional traders or MM's who don't want my posts to scare off potential retail traders.

This is my last time posting this. Don't want to waste my time arguing with biased idiots.

 

[OneGlanceTrader]

I find rolling it forward is like adding to losing positions. If it became ITM by this expiration, how do you know it won't ITM by next expiration? If it does, you will be making losses again. What's the point? Unless you really see a high probability of the market reversing by the next expiration, I don't see any merit in rolling imo.

Thanks for you observation. I agree with you if you keep the same strike when you roll. However, if you roll down in strike, you are taking risk off the table and improving your P&L position.

 

[OneGlanceTrader]

The number one skill in selling options is risk management - full stop. You have the most assymetrical return profile in the markets and getting blown up is a real possibility. As for rolling ITM options, I would defer to Paul Tudor Jones who deftly stated "only losers average losers".

Is not rolling an ITM option form of risk management?

 

[taowave]

Most likely a poor form of risk management..And you should be asking at what cost..

Is not rolling an ITM option form of risk management?

 

[taowave]

And decreasing profit potential..

No free lunch

Learn how to take a loss and find a new trade that offers the best risk reward...

If you had funds to place one trade,would the roll be your trade of choice??

Are you in love with diagnols??

Skew trade??

Thanks for you observation. I agree with you if you keep the same strike when you roll. However, if you roll down in strike, you are taking risk off the table and improving your P&L position.

 

[newwurldmn]

That post is so wrong. Where’s delta in your statement. In the short run, 90percent of your pnl will come from delta. You ignore it.

Gamma is related to theta. You don’t get one without the other offsetting.

You aren’t qualified to trade options.
1. Because you are poor (though there are guys on here who turned a 10-20k account to six and seven figure accounts trading vol).
2. Because you don’t know anything about options but think you do (that guy is the exact opposite of that).

You need to read my posts more thoroughly before you troll. This is not the first time that you troll before reading my posts:



That's what I wrote, according to my own observation and experience and this is backed by academic research so I am not conjuring these things in my head. You don't want to accept this, like I said, either because 1) you are on a winning streak or 2) you are institutional traders or MM's who don't want my posts to scare off potential retail traders.

This is my last time posting this. Don't want to waste my time arguing with biased idiots.

 

[TheDawn]

That post is so wrong. Where’s delta in your statement. In the short run, 90percent of your pnl will come from delta. You ignore it.

Gamma is related to theta. You don’t get one without the other offsetting.

You aren’t qualified to trade options.
1. Because you are poor (though there are guys on here who turned a 10-20k account to six and seven figure accounts trading vol).
2. Because you don’t know anything about options but think you do (that guy is the exact opposite of that).

Delta?? LOL Gamma determines how fast delta changes when shit hits the fan. Who the fuck cares about delta anymore?? Everything is dynamic! Whatever strikes that you used in your original option position according to delta all go out of the door!

Gamma is related to theta, of course when shit hits the fan. When there is no more volatility when determined by the "market", it's theta that calls the shot that kills the options price down to zero. Gamma is not related to theta anymore right? LOL I don't see no gamma offsetting when theta is ballooning? All I see is dealers hiding behind thetas to avoid paying up.

This exactly confirms what I am talking about and it's confirmed by academic research. Anyway I tried my best to expose it to retail traders so they know what they are getting into. The budget constraint that I described in my posts is very typical of a retail trader with families. If they are too poor to trade in options according to you, then I agree, they should stay away but that still doesn't negate what I observed how options markets work so regardless whether one wants to participate in options trading or not, they should be aware.

 

[TheDawn]

Thanks for you observation. I agree with you if you keep the same strike when you roll. However, if you roll down in strike, you are taking risk off the table and improving your P&L position.

But how do you know the lower/higher strike won't become ITM or won't have the same chance or higher chance of becoming ITM? This is like adding to the losing position by averaging down/up.