The #1 Skill In Selling Options

[newwurldmn]

And how are people going to know that unless they have insider information?? And if they are trading index options, they won't even know that. And on those days that they encounter those "bandits in ski masks", they lose 10% of their trading capital and you think it's ok for a retail trader?

And using your analogy, the problem is during the days when it's you that's encountering the "bunch of guys with ski masks", you lose everything that you have earned in your bank account because the "bunch of guys with ski masks" force you to withdraw them all from the ATM. But then when you decide to don a ski mask to stand by the ATM machines, the bank tells you you can rob the ATM machines when the bank is closed and the doors to the ATM machines are locked.

I am sure your pea little brain didn't understand my analogy. But anyway don't give a shit. For people who are genuinely concerned about retail traders' welfare, they will know what I am talking about. Really done with you here.

That's the hard part of trading options. Figuring out when there will be a vol event. If you can't do that, then you are just churning dollars.

This is true of everything. You have to know which battles are in your favor.

 

[TheDawn]

You cited heretofore unnamed academic research.

I did. I said delta is a source of pnl that you are ignoring. You said "who gives a fuck about delta?" How do I respond to that?

That's not what I said. Stop quoting what I wrote out of context, fuckbrain. Why don't you quote the whole thing of what I said about delta? What I said was:

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!

You don't know how to respond to it because you don't know fuck about options. You made some profit trading options against us retail traders hiding behind your institution's $$ and think you've found the holy grail. Pathetic!!

 

[taowave]

dawn,BREATHE...in OUT

You are way off on alot of the things you say,and NWD is very good at what he does.....

If you are serious about breaking the retail trader curse(which doesnt actually exist),learn to take constructive criticism..

Unless you are a "pussy" unicorn trader like me,a 10 percent drawdown is most likely in the cards...

And shouldnt you be relating max drawdown to returns???

You have alot to learn,open your mind and close your ego

And how are people going to know that unless they have insider information?? And if they are trading index options, they won't even know that. And on those days that they encounter those "bandits in ski masks", they lose 10% of their trading capital and you think it's ok for a retail trader?

And using your analogy, the problem is during the days when it's you that's encountering the "bunch of guys with ski masks", you lose everything that you have earned in your bank account because the "bunch of guys with ski masks" force you to withdraw them all from the ATM. But then when you decide to don a ski mask to stand by the ATM machines, the bank tells you you can rob the ATM machines when the bank is closed and the doors to the ATM machines are locked.

I am sure your pea little brain didn't understand my analogy. But anyway don't give a shit. For people who are genuinely concerned about retail traders' welfare, they will know what I am talking about. Really done with you here.

 

[TheDawn]

That's the hard part of trading options. Figuring out when there will be a vol event. If you can't do that, then you are just churning dollars.

This is true of everything. You have to know which battles are in your favor.

That's not what I have been trying to say, idiot! Picking battles is nothing; it's what traders do. The problem with options trading is when the battle is in your favour, you don't get compensated enough to counter the loss that you suffer when the battle is not in your favour because of how gamma and theta dynamics work against you more than for you.

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.

 

[Stratter]

The number one skill is knowing when to take your foot off the gas. Everyday you walk to the bank and withdraw money from the ATM. Except the day when there's a bunch of guys with ski masks on shooting hostages.

I like the metaphor!

 

[taowave]

If you dont get compensated enough when you are dead right (battle is in your favor),
you either break discipline, and didnt hold the position when it started to accumulate profit,or you didnt quite understand the nuances/greeks of the position that you put on.

Are you soley talking about selling naked options???

Thats your only Get out of Jail free card...

That's not what I have been trying to say, idiot! Picking battles is nothing; it's what traders do. The problem with options trading is when the battle is in your favour, you don't get compensated enough to counter the loss that you suffer when the battle is not in your favour because of how gamma and theta dynamics work against you more than for you.

 

[TheDawn]

dawn,BREATHE...in OUT

You are way off on alot of the things you say,and NWD is very good at what he does.....

If you are serious about breaking the retail trader curse(which doesnt actually exist),learn to take constructive criticism..

Unless you are a "pussy" unicorn trader like me,a 10 percent drawdown is most likely in the cards...

And shouldnt you be relating max drawdown to returns???

You have alot to learn,open your mind and close your ego

@newwurldmn is just lucky. Win/loss ratio is not everything in options trading; it's the how much earn vs. how much you lose that is most important. If you made 10 wins of $500 each but loses $10K in one shot because of gamma and surprisingly theta doesn't work for you anymore, you end up in the red. But when you've lost 10 times for $500 each, this one time that you won, you won't be winning $10K; you will only be winning $4K because of theta and surprisingly gamma when it worked so well against you before all of sudden doesn't work for you anymore this time; it's theta now that takes over. This is what I am trying to illustrate. So it's when the "battle is in your favour", you are only winning a little bit but when "the battle is not in your favour", you are losing a lot more.

I guess with you idiots, just outlining my theory was not enough; it was way over your head. I have to really illustrate it with numbers. It's you who need to close your ego and start opening up your brain.

 

[TheDawn]

Thats your only Get out of Jail free card...

Still doesn't change the fact that Boardwalk is earning you less than how much you are paying for somebody else's Baltic Avenue for the same amount of houses/hotels. That's the reality of options trading.

 

[taowave]

The reality is you are getting your ass kicked in option trading>drinking/smoking> posting..

Still doesn't change the fact that Boardwalk is earning you less than how much you are paying for somebody else's Baltic Avenue for the same amount of houses/hotels. That's the reality of options trading.

 

[taowave]

If I decipher your barely intelligible post,you are/were a naked option seller who doesnt delta hedge..

yes,when vol blows up in your face and rips your gonads off,its painful...

And its 10x more painful if you dont delta hedge,or scramble to cover your gamma.

Its clear you havent made money selling vol,so why not go back to the drawing board and trade, Verts, calendars,flys or straight direction via the underlying???

Better yet,check out Orats and do some simulations....

You arent ready to come off the bench

@newwurldmn is just lucky. Win/loss ratio is not everything in options trading; it's the how much earn vs. how much you lose that is most important. If you made 10 wins of $500 each but loses $10K in one shot because of gamma and surprisingly theta doesn't work for you anymore, you end up in the red. But when you've lost 10 times for $500 each, this one time that you won, you won't be winning $10K; you will only be winning $4K because of theta and surprisingly gamma when it worked so well against you before all of sudden doesn't work for you anymore this time; it's theta now that takes over. This is what I am trying to illustrate. So it's when the "battle is in your favour", you are only winning a little bit but when "the battle is not in your favour", you are losing a lot more.

I guess with you idiots, just outlining my theory was not enough; it was way over your head. I have to really illustrate it with numbers. It's you who need to close your ego and start opening up your brain.