Which market moves most violently?
- Thread starter TimeCorrosion
- Start date
I am new to this board, barely a month or so.... I am guessing this guys going to tell us that all models donât predict things like SEC Well's notices or BRK all of a sudden showing interest in buying shares in XYZ? You guys who have been here longer I assume have run across this kind of rant before, but Iâll step in for the fun of it now.
The b/s model has flaws most of which are related to early exercise of American style dual rate options but there is no mystery in the valuations of options these days especially in the listed equity options products.
The b/s model has flaws most of which are related to early exercise of American style dual rate options but there is no mystery in the valuations of options these days especially in the listed equity options products.
Always remember, that when you digest information in relation to the markets, that most of it is twisted.
When I speak of a "Flaw", I speak in the context of the overall operation of the market under scrutiny.
If you read my original post, you will see that I clearly stated that the majority of retail Options traders look for cheap Options.
By the mere fact that they are cheap, implies that their bias is to go Long, or Buy the Option.
Now, if the majority of retail traders see an Expensive Option, what do you think goes on in their minds.
Is it a good guess to conclude that they will see this Option as too Expensive, and thus dismiss it for consideration.
But, what they fail to see, is that the mere fact that the Option is Expensive, warrants further investigation, for we now have what some call a MisPricing.
And. if we have a MisPricing in the market, then something is going down with the Big Boys, and one thing is for sure, when they decide to act on that MisPricing, you better make sure that you are not on the opposite side to what they are trading, for if you are, no force field in the universe will stop them from crushing you like a fly hitting the windscreen of a car travelling at high speed.
So, with that, I am sure that some of "You guys who have been here longer" will be only too happy to expand so that you may deepen your knowledge of the real world of Options Trading.
Think long and hard about what I said, and imagine you are a child, and then say to yourself, does this make sense, or not.
The answer that you derive at, will, in fact, tell you, with about 99.99% accuracy, what your future holds in relation to becoming and Elite Trader, although I prefer the term RealProTrader myself.
RPT
Now, please give an honest answer in relation to my reply, and what you really think of it.
Do not worry about what others will think of your reply.
Remember, when you trade, it is Your Money on the table, not their money, so everything you consider should be in realtion to how it is going to affect Your Account, not theirs
Do you fully understand what I am saying here ?
RPT
Because the Pros write options for a living. Not buy them. (on average)?
To be honest I donât really care what reasons retail options buyers or sellers have for making their decisions. I can say with 100 % certainty that they DONâT move the markets or set the price. Since âexpensiveâ and âcheapâ are relative terms you really need to qualify them before you use them.
The days when I stood on the floor milking the retail investors were a long time ago. These days they milk em for tiny pennies of edge and itâs a game played by big firms who try and capture the volume for tiny edge with lots of soft money deal and payment for order flow.
The bottom line is retail traders are not trading for âedgeâ to theoretical values the options markets today just doesnât have that opportunity.
As far as you being the one who hands out the title of âelite traderâ well again thatâs a subjective thing and being that you believe you speak for most retail traders ( which you donât ) I really have no interest in your bestowing of titles here, or the titles themselves for that matter.
I thought you wanted to discuss the actual statistical flaws in the B/S model not what your perception of the market place is.
You live in Vegas? Remind me of another poster from a different board.
The days when I stood on the floor milking the retail investors were a long time ago. These days they milk em for tiny pennies of edge and itâs a game played by big firms who try and capture the volume for tiny edge with lots of soft money deal and payment for order flow.
The bottom line is retail traders are not trading for âedgeâ to theoretical values the options markets today just doesnât have that opportunity.
As far as you being the one who hands out the title of âelite traderâ well again thatâs a subjective thing and being that you believe you speak for most retail traders ( which you donât ) I really have no interest in your bestowing of titles here, or the titles themselves for that matter.
I thought you wanted to discuss the actual statistical flaws in the B/S model not what your perception of the market place is.
You live in Vegas? Remind me of another poster from a different board.
