Whether an options writer or buyer has better edge? Why?
- Thread starter OddTrader
- Start date
Isn't there a large body of work which suggests "Option Sellers win 80% of the time, Option Buyers win only 20%?"
Name a fund or trader who has beating the market over a 20 year period, writing or buying options... can't do it.
1) For the sake of "debate", the buyer.
2) The seller must also be right on lack of direction, timing, lack of large price moves and volatility contraction.
3) Sellers tend to earn lots of smaller profits and occasional large losses. Vice versa, buyers can tend to have lots of smaller losses with occasional large profits.
4) Writers have the possibility of margin calls that buyers do not. It is something to take seriously.
5) Personally, I prefer the short-side about 80% of the time.
2) The seller must also be right on lack of direction, timing, lack of large price moves and volatility contraction.
3) Sellers tend to earn lots of smaller profits and occasional large losses. Vice versa, buyers can tend to have lots of smaller losses with occasional large profits.
4) Writers have the possibility of margin calls that buyers do not. It is something to take seriously.
5) Personally, I prefer the short-side about 80% of the time.
ansbacher got beat up pretty good last year but no worse than most long only buy and hold mutual funds.