To paraphrase... Strategies don't kill people; people (and leverage) kill people.
What is the most statistically predictable Option strategy?
- Thread starter xandman
- Start date
This is dead on, and something I think more people need to absorb. No trader gives away for free what they could be selling, or personally exploiting without others following along.
So basically, IGNORE all YouTube options guru's, all forum threads that pretend to teach trading, and all books written about how to "make 5-10% income a month trading options"
I'm sure as hell not going to share my most effective strategies, and I wouldn't expect anybody else to share theirs.
Agreed
This is aka going to Coca Cola and ask them what is their recipes, or go to Solo and ask him what is his next trade.
I'll take a crack at this. If I interpret the OP's question correctly, I think he is only asking what is the most consistent publicly available strategy. There are no expectations of naive altruism here. My vote is for call and put ladders or back spreads. It is possible to be collect via decay and hedge out (some) tail risk.
Actually, I didn't think I was indirectly asking for the secret sauce so I must be asking the right questions.
I was asking more of a "All things being equal" regarding the return distributions of various limited loss/limited gain strategies. For example:
Short fly vs long fly. Short fly's probable distribution is eventually skewed to one of the wings , but you can't say inversely that a long fly is skewed to the body (max profit). How things balance out in terms of win% and probable profit has me lost in the sauce of abstraction. Newwurldmn's comment is actually nice grounding which pulls me back into reality.
Perhap's, I should look at what double distribution (short fly payoff) vs single distribution(long fly payoff) means in the other sciences.
I was reminded just last week of the value of 1/x for minimization functions, so I am at the limits of my depth. I don't even want to think about the changing convexity and its effects on the probable profit calc right now.
In short, I was trying to get a conversation between the basics of intrinsic/extrinsic value calculations and currently unfathomable calculus.
I was asking more of a "All things being equal" regarding the return distributions of various limited loss/limited gain strategies. For example:
Short fly vs long fly. Short fly's probable distribution is eventually skewed to one of the wings , but you can't say inversely that a long fly is skewed to the body (max profit). How things balance out in terms of win% and probable profit has me lost in the sauce of abstraction. Newwurldmn's comment is actually nice grounding which pulls me back into reality.
Perhap's, I should look at what double distribution (short fly payoff) vs single distribution(long fly payoff) means in the other sciences.
I was reminded just last week of the value of 1/x for minimization functions, so I am at the limits of my depth. I don't even want to think about the changing convexity and its effects on the probable profit calc right now.
In short, I was trying to get a conversation between the basics of intrinsic/extrinsic value calculations and currently unfathomable calculus.
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You hit the nail on the head and gave me a eureka moment of what I was groping for.
" Most % wins with easily calculable and finite payoffs over a random walk to be exact! " That's a mouth full. don't ask why I didn't title the thread that. I just figured it out myself. I beg to differ that the question is a secret sauce question, because high potential losses will bring the expected payoff back to zero or neutral without an edge....like most things.
Again I put forth the short fly which is analogous to what the market maker is doing. ( the enemy who always wins) I just don't have the tools or framework to put the (pseudo) thesis into research.
Sinclair has a trader article on the consistency of backspreads overtime, btw.
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I don't want to sound like a Sinclair groupie but one of the quotes in his books always stuck in my mind. "Vega wounds. Gamma kills."