anyway, i'm not going to force any ideas down your throat because i don't really care. you seem to be intimidated by frontspreads and you're only comfortable with backspreads, and that's fine. but i think it's pretty unfair that you're creating this impression that people can't make money from selling premium and, thus, dissuading people from knowing what are other ways to make money. i can't replace your experience and knowledge, and you can't with mine.
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Writing options for a living
- Thread starter torontoman
- Start date
Quote from Anseld:
that's something you should look more into because there are definitely a lot of options that are not priced efficiently.
the margin of error for goog is not as wide as you think because a 23.5 point move for goog can easily be done in a day and a half. you think you're going to eat a lot of premium, but most of it won't be retained.
for other options that have low premium, it's easier to manage and most of premium could be retained with proper hedging as long as there are no giant gaps. with stuff like goog, you don't have that luxury.
Anseld, again, I'm going to have to throw out the red flag here. LOL. You are not making a unique argument. In other words, whatever you say about GE can be applied to GOOG. Or any argument you make about selling premium can be made about buying premium. For example, sure GOOG could move 25 pts in two days, but according to you, there is nothing stopping me from selling short stock in a downward move right? I mean you did say with proper risk management one can control their risk right?
And like I said before, once you start talking about having great timing on your hedges and exercising good discipline, the argument for selling premium ceases to exist and the argument now becomes a risk management or directional argument. Are you saying that a person that buys juice in GOOG cannot also trade it just as well. I mean according to you GOOG makes all these big moves and surely those must be tradeable as well right?
What I am asking you to do here is to give some unique evidence that you have an edge over selling juice in GE vs buying it. I know for a fact that evidence does not exist. But I am willing to listen to what you have up your sleeve.
Quote from Anseld:
anyway, i'm not going to force any ideas down your throat because i don't really care. you seem to be intimidated by frontspreads and you're only comfortable with backspreads, and that's fine. but i think it's pretty unfair that you're creating this impression that people can't make money from selling premium and, thus, dissuading people from knowing what are other ways to make money. i can't replace your experience and knowledge, and you can't with mine.
Anseld, clearly you have not read any of my previous 3,000 posts on this forum. If you had, you would know that I am a notorious front spreader. LOL. I am not trying to dissuade anyone from selling juice. For the last freaking time, I am saying that there is NO edge in selling juice over BUYING juice. Is Anseld the only guy in here that is misreading me here? I think I have said this now 10 times as my hands are getting sore from typing it. LOL.
If it helps you any, I will make this statement. Notice I am simply reversing the words around. There is no edge in BUYING options over SELLING them. Does that make it better? It's the same thing, but maybe you like it better when written that way. Re-read my posts if you have to. I have said nothing about the profitability of selling juice, just that there is no added value in doing it over buying juice. Oy vey!
Quote from Maverick74:
What I am asking you to do here is to give some unique evidence that you have an edge over selling juice in GE vs buying it.
sorry mav, i have no concrete evidence for you or anybody other than what happened in the growth of my account. i've been trading options for like a decade, and i was only sharing experiences of what i viewed was easier to do to make money consistently.
i've made and lost money in backspreads before. i'm sure you have as well.
i've also made and lost money in frontspreads before, so i know how what all methods are like, and i'm only telling how i feel from my experiences and personal knowledge of options trading.
if your experiences are different, i can't do anything to change that. and likewise, nobody can do anything to change mine.
Quote from Anseld:
sorry mav, i have no concrete evidence for you or anybody other than what happened in the growth of my account. i've been trading options for like a decade, and i was only sharing experiences of what i viewed was easier to do to make money consistently.
i've made and lost money in backspreads before. i'm sure you have as well.
i've also made and lost money in frontspreads before, so i know how what all methods are like, and i'm only telling how i feel from my experiences and personal knowledge of options trading.
if your experiences are different, i can't do anything to change that. and likewise, nobody can do anything to change mine.
Anseld, my argument mentioned nothing about profitability. I am simply taking about edge, or lack there of. What the hell, for old times sake. There is no difference between selling a 20 delta option vs buying a 20 delta option. LOL.
not to get to too technical with you, but buying a 20 delta option is sometimes safer than selling a 20 delta option if something explodes several sd's to the opposite side.
buying a 20 delta option has limited risk, whereas selling a 20 delta option does not.
come on now. that's stuff you should know.
buying a 20 delta option has limited risk, whereas selling a 20 delta option does not.
come on now. that's stuff you should know.
Quote from Anseld:
not to get to too technical with you, but buying a 20 delta option is sometimes safer than selling a 20 delta option if something explodes several sd's to the opposite side.
buying a 20 delta option has limited risk, whereas selling a 20 delta option does not.
come on now. that's stuff you should know.
Nope, not true. The delta of the option has nothing to do with a specific event, but rather the sum or all possible events. That option has priced in the low probability of a 2 sigma or 3 sigma event. That means, you could sell a Aug 50 call for .50 that is 2 pts OTM and the stock could run 10 pts. That run has been factored into the option already.
Let me repeat this again. Expected value equals the sum of ALL the probabilities times the payoff. And the delta of an option has nothing to do with how safe it is.
Hindsight is no edge.
As Will Rogers would have said, "Buy options that go up. If they don't go up, then don't buy them."
As Will Rogers would have said, "Buy options that go up. If they don't go up, then don't buy them."
Or the Will Rogers corollary:
"Sell options that don't go up. If they go up, then don't sell them!"
"Sell options that don't go up. If they go up, then don't sell them!"