Who is really making a living trading options??

Quote from nnfx:

Ok, lets talk about what really gives u an edge in trading options

1) i understand all those 20-25 strategies and i paper traded them but overall i was at breakeven and it was just gambling becouse without knowing where the stock will go or whether the certain commodity will rise or fall this is just gambling.

2) Options are fairly priced so that neither sellers or buyers are in initial advantage. I understand this concept.

So who in here is actually making money trading options and how do you guys do it? I know some of you dont want to share your secret methods ...but for those of you who are kind to give some advice i have simple question

-->>> what kind of strategy do you use and what excatly gives you and EDGE? (is it finding some mispricing in volatility or sth else? trading the earnings?)
More...

your broker, option book seller and option education snake oil seller
 
Please read my original post again. I was not telling u or anyone how to trade. I was only giving a stock name with high IV each month as Darp was trading LNG. I was not asking for an education.
 
There hasn't been a crossed market in the OCC-domain since 2000-2001. I certainly don't consider LAC's "pick-em" trade as an arbitrage.
--------------------------------------------------------------------------------

I think it was a little later than that say 03. I know the locked market model went to shit around 03.

I left LAC before then and worked on some option trading models
much like Making Markets but never taking the opposite side on the same day, had to hedge with the underlyer and that become capital intensive.

I left the options game, end of 04 to join a boutique Private Equity Firm .....never looked back since.
 
Besides...didn't LAC get sued by IB? I remember something coming across the wires as one of my former colleges the Private Equity Firm was busting my balls as the basic SEC 'Financial Records' kept about where I worked had LAC on it and comes up on background checks.


But, I do agree.....I wish I could find an edge just to play around in the options market.
 
option education snake oil seller
-------------------------------------------------

Are they still around? "WITH MY AMAZING SYSTEM YOU TO CAN BE A TRILLIONAIR.
 
Quote from ClimbingMel:

My EDGE and another downside to most new people is that I have the capital & margin to get assigned stocks like GOOG & AAPL and then sit on them for possibly months writting CCs until they come back and get called away.

It is a risky way to trade and I don't recommend it unless you have the capital to back it. You also still have to call the direction of the underlying. I just find this more profitable than just buying the stocks. You also need to have enough funds to be making money on other strategies if and when you get caught holding one of these.
More...
I don't understand the size argument. Risk is risk and it doesn't change with account size. It's no edge.
 
Quote from johnmarg:

Another stock you may consider is RMBS. High IV every month, more than LNG and maybe less of a price swing and less likely to go out of business or drop to near zero. Just a thought
More...
Volatility and risk go hand in hand.
 
Quote from shopster:

here is your edge.

put a ton of margin in your account and sell them way the heck out of the money 2 to 3 weeks to expiry.
look to make 2 to 3% per month

do it 12 times per year.
More...
10 years @ 3% a month and you're up 3500%

Start with 1,000 and go 20 years and you own a peice of Manhattan. Have a Black Swan blow out and your piece of Manhattan is a Pampers box residence down in the Bowery :)
 
"Volatility and risk go hand in hand."

Respectfully, I used to think that volatility was a measure of risk. Now I think risk and volatility are correlated but are not quite the same thing. If that is what you were saying then we agree.

To another comment:
I would argue that size is indeed an advantage in the options market since the options market is so small relatively and quite illiquid at times and for some stocks.

The liquidity aspect means that capital size can be an edge. I think Livermore would trade options were he alive today since I think that was his edge as well in the bucket shop days.
 
Quote from EMRGLOBAL:

There hasn't been a crossed market in the OCC-domain since 2000-2001. I certainly don't consider LAC's "pick-em" trade as an arbitrage.
--------------------------------------------------------------------------------

I think it was a little later than that say 03. I know the locked market model went to shit around 03.
More...

The OCC linked the exchanges in 2001 which barred any fill of any size on a crossed quote. IOW, no fill would occur if you hit a 3.25 bid on PSE with an offer showing 3.00 at PHLX.

I know this because I got a letter from the OCC via IB which threatened to claw-back the crossed market gains. Anyone who was involved in the litigation would know that the trading in a specific ticker resulted in the inter-exchange linkage action.

LAC's "pick-em" market (for those that don't know) was simply a 3.00 x 3.00 option in an inter-exch market.
 
You must log in or register to reply here.
Back
Top