Writing options for a living

[RealProTrader]

Quote from just21:

How do you make 5-10% without taking a lot of risk?

It is very easy if you know what you are doing !

What is the biggest risk you take when you decide to trade, and I don't mean in $ terms, I mean in trading terms.

Once you know what your biggest risk is, then you can work backwards and lessen the risk. The more you work on it, the less and less risk you will take, until, eventually, the risk associated with your trading will be so small that you will then see your 5-10% per month, easily.

Do you fully understand this concept ?

If not, then you have a long way to go and a lot of learning to do.

RPT

 

[just21]

When selling options my biggest risk is that the market moves to the strike price. If it reaches the strike then I delta hedge. This is why my return is less than 5-10% as I need to have margin available for the hedge. Using SPAN margining I made 2.8% last month.

 

[rcanfiel]

Quote from RealProTrader:

This is completely wrong. Options are used as part of an overall strategy to hedge risk, based on the odds and the capital put at risk in the market.

The target is not the Options for the big player, it is the underlying. Those of us that know how it works can take advantage of this and profit from the change in the premiums at the different levels.

You must understand that all is never as it appears to be. If you think that something is of value, then the odds are it is not.

Does this remind you of any other scenarios in life, that have similar tendencies !

Also, there is one fundamental pre-requisite that must be understood before one decides to trade any market, not just Options !

Does anyone here know the answer ?

RPT

I do not know who you are responding to from the quote you extracted. If it is my part, your response has little to do with what I said.

 

[RealProTrader]

Quote from rcanfiel:

I do not know who you are responding to from the quote you extracted. If it is my part, your response has little to do with what I said.

I am responding to anyone who wants to learn a bit about how the real world of Options trading actually works.

If you make a conscious decision that you already posses adequate knowledge that enables you to extract profits from the Market Makers, week in and week out, then you are in no need of considering my advice.

However, if you are not in that position, as I am, then you may well do yourself a big favour and bite the bullet now.

Remember, this is a hard and fast game of odds, no room for pocket money traders in the real world of Options trading.

RPT

 

[atticus]

rcanfiel -- his responses are soliloquys. This guy has be banned at least 6x from ET. He's of the belief that all options were meant to be sold. Wow, that's strong knowledge of theory.

He blew-out writing puts while posting on Trade2win.

Your best bet is to ignore this CYOF/Ateht/Derivman troll. However, I'll admit I'd like to hear about this mean-diversion strategy. Oh Lord.

 

[RealProTrader]

Quote from atticus:

rcanfiel -- his responses are soliloquys. This guy has be banned at least 6x from ET. He's of the belief that all options were meant to be sold. Wow, that's strong knowledge of theory.

He blew-out writing puts while posting on Trade2win.

Your best bet is to ignore this CYOF/Ateht/Derivman troll. However, I'll admit I'd like to hear about this mean-diversion strategy. Oh Lord.

And you my dear man appear to be a brother to that profitaker nick.

How many of you caught the blowoff and bought the bottom just now, not too many I would say.

I can do this with one hand and still make money, and the reason is, I know what I am doing.

As for your imaginary friends, and smoke screens, well, you can always post an answer to my questions, but then again, as my friend has already told me, don't expect to see too many RealProTraders here !

RPT

 

[atticus]

You assumed I was referring to you? The SPX is closer to the LOD than the HOD. Please enlighten us and outline your "Mean Diversion" theory.

 

[Profitaker]

real***trader

You've asked lots of questions. But you might actually get some answers if you contributed something positive yourself to this forum.

Now here's your chance.....

Hmm, a mean-diversion, eh Pro? I can't wait to hear all about it !

 

[MajorUrsa]

Sigh****

I guess he escaped from the clinic again and/or stopped taking his medicine. We'll just have to wait for another episode where he wil start insulting people.
Then he will be banned and the admin can clean the thread from his ridiculous statements.

Soon, I hope, although I really wish there was a cure.
Ursa..

 

[cdowis]

This forum has an "ignore" function, and I used it for the first time today.

It works very well.