Dear comrades
Where is the edge?
Can it be proven to exist?
How does it differ from consistent luck?
daddy's boy
Where is the edge?
Can it be proven to exist?
How does it differ from consistent luck?
daddy's boy
where is the edge in options trading?
- Thread starter daddy'sboy
- Start date
So why are the retail guys here?Quote from FT79:
The market maker has the edge i'm afraid
Charity, delusion ...?
Umm, I know where to find data.
My question is more of a philosophical nature, but thanks for your reply anyway.
Peace
db
Sorry not to answering concrete questions.
Where is the edge?
The edge is in undervalued options to buy and overvalued options to sell. Again check the option databases.
You also need to apply moneymanagement and winning traders psychology.
Can it be proven to exist?
It exists at institutional level and at private trader level.
It can't be proven, because not all will tell you.
How does it differ from consistent luck?
It differs from consistent luck due to repeating success on a huge number of sequential trades. The prob of continued luck decreases by the lenght of a positive track record.
Where is the edge?
The edge is in undervalued options to buy and overvalued options to sell. Again check the option databases.
You also need to apply moneymanagement and winning traders psychology.
Can it be proven to exist?
It exists at institutional level and at private trader level.
It can't be proven, because not all will tell you.
How does it differ from consistent luck?
It differs from consistent luck due to repeating success on a huge number of sequential trades. The prob of continued luck decreases by the lenght of a positive track record.
the retail traders have the edge of trading just when they want to whereas the market makers have to provide a bid and ask at all times. the ability of trading just when one feels to is a powerful edge. this is especially true with options because of their non linear nature.
the best proof this is true is by looking at the front month options chain of any hi volume underlying during the course of the day and understand the complex dynamics of price movement across the different call and put strikes.
consistent luck is a paradox. either is luck or consistency. the former is random, the latter isn't. can't have both in the long run.
I tryQuote from IV_Trader:
Errr , the forbidden "E" word
You are a real trouble maker , DB
db