Did a quick search, the original post above. Nothing more to add either.
Hey risk arb..... Deep breaths (blue occean)
Writing options for a living
- Thread starter torontoman
- Start date
Did a quick search, the original post above. Nothing more to add either.
Hey risk arb..... Deep breaths (blue occean)
Well if it put a smile on your f f ff face then it was worth it
I know that, and I was certainly not suggesting that you were somehow misguided in your assumptions. On the contrary, if anyone here understands what he's doing it must be you.
It is good that you stipulate it again; the trades are not made to improve expectancy but solely to 'play' any of the greeks, notably gamma and vega and thereby improve risk/reward properties to the trader's taste.
Well, there we are. I think this is the core of this thread.
I conclude that there is no strategy or system whereby as series of trades that have themselves -exp can result in a +exp strategy. If a strategy of adjustments does have +exp it is because of either a modelling issue (like skew) or some external prediction system about the greeks' behavior of the underlyer.
That external system itself of course can have +exp when tested on historical data.
Maybe that is what Maverick is actually doing, but he fails to isolate that point in his explanation. This could mean that he either is not aware of the distinction or that he is unable to explain it sufficiently to us noobs.
I hope it is the latter and that one day he will take the time to explain his point. I for one am unable to find it in the previous thread.
Ursa..
MajorUrsa,
I have dedicated an embarrassing amount of time to this thread. I have said everything I wanted to say here. I refuse to keep repeating myself over and over. If you believe that a trader cannot create a positive expectancy position then there is no way he will ever make money over the long run, simple as that. By definition negative expectancy implies a negative outcome over a long enough series of trials. I cannot argue this point any further. I doubt riskarb will either.
Do me a favor, just continue on in your life with whatever you were doing before this thread started. Forget this thread existed. Some of you are obviously getting way too excited and too emotional over this. I've got business to take care of. Good luck.
Hi Maverick,
I'm sorry if I upset you, that was totally not my intention and I can assure you that I'm not 'emotional' about this at all. I really don't understand what makes you so upset.
I thank you for spending your time on this thread as I learned a lot from it. I hope you will keep contributing and help us dimwits to get a grasp.
I think my understanding of options is mediocre but better than most ppl's. There will always be aspects that are beyond me, but this one is missing only the last step. If you think you explained your point, I can't find it.
I'm not saying you can't put on a +exp position, but only if you use a system that makes assumptions about the future of the underlyer and if that system can be reliably tested on historical data. For any step in the adjustment of a position you must have a reason to do so.
Eg. if you're long a strangle and decide to complete the fly by selling the body straddle instead of keeping just the naked strangle, you do so because you think it best at that time, eg. because you expect the price to re-center instead of progressing outward.
If you only sell the straddle because of some price-equation, eg. because you then have a 'free' butterfly, it is just a random new position and thus has zero expectancy (and the fly is not free!). At least that is my current thinking; please point me wrong if you would.
Again I found this a very nice thread and, as said, IMO it touches the core of what this whole forum is about. I'm sure a lot of ET-ers were helped by the (your) insights. I'm sorry to hear you didn't enjoy it.
Ursa..
I'm not angry nor upset. This thread is 100 plus pages and it's time to put it to sleep. I trade for a living and run an office and I don't have much time to keep coming on here and responding to each additional post. So when others keep asking questions and wait around for responses, well, they will have to keep waiting. I assure you ET is pretty low on my priority list right now. I'm sure it's the same for riskarb. Good luck with your trading.
MajorUrsa, I have the same thought as you. Whether Mav explain or not does not matter. I doubt he will explain how he get the +expectancy, because he could not explain it better than you, and many others.
There's no reason to get locked into semantics.
When it comes to options i am a dwarf minnow. But even i know what this guy is saying and think the questions presented to him are sophomoric and flawed so, it is no surprise his answers reflect this.
You might as well ask him if two wrongs can make a right at this rate. Don't scare the guy off, he is a busy professional willing to share his insight.
I would like to hear more about him and his operation(s). I enjoy reading your posts Mav and Risk. Thanks for your and everyones words.
When it comes to options i am a dwarf minnow. But even i know what this guy is saying and think the questions presented to him are sophomoric and flawed so, it is no surprise his answers reflect this.
You might as well ask him if two wrongs can make a right at this rate. Don't scare the guy off, he is a busy professional willing to share his insight.
I would like to hear more about him and his operation(s). I enjoy reading your posts Mav and Risk. Thanks for your and everyones words.