www.thinkorswim.com

[resinate]

Quote from nitro:

Pat,

Trading the volatility skew and smile is trivial people that do this kind of trading.

To be honest with you, I don't really get what the point of options are other than leverage. I mean, unless you understand how to be profitable just buying calls and puts, no matter how sophisitcated you are in putting combinations of fancy options positions, you still end up a loser. My point is that there is no way to avoid being a TRADER and at some point that means putting on a directional trade.

Other than metoox on this site, I have never seen a non-arbitrage option strategy that works for the off-the-floor-trader any more than going long or short the stock, except that the options give you more leverage. Even in metooxx's case, I think the edge has been dwindled to locks where you still have to decide on a DIRECTION.

Doesn't mean there aren't strategies out there that give you true edge just from the use of options as opposed to the underlying, just means I have never seen it.

nitro

Nitro,

I attended a TOS seminar-not tradesecrets- the one I went to was free at the cboe. They taught high probability spread trading that is not directional in the sense that they are profitable if the market stays within a normal range- which TOS claims it does 60+% of the time.

I'm guessing your mostly right on your second point from my experience which is mostly limited to spx options. While the bid ask spread is large enough to theoretically make money without movement, unless you are lucky enough to be hit with a market order (which is rare) you need some movement to capture a decent chunk of the spread. But with some movement, the large bid ask spreads are the other reason to trade options besides the leverage and limited risk possibilities.

 

[patefern]

Quote from nitro:

Pat,

Trading the volatility skew and smile is trivial people that do this kind of trading.

To be honest with you, I don't really get what the point of options are other than leverage. I mean, unless you understand how to be profitable just buying calls and puts, no matter how sophisitcated you are in putting combinations of fancy options positions, you still end up a loser. My point is that there is no way to avoid being a TRADER and at some point that means putting on a directional trade.

Other than metoox on this site, I have never seen a non-arbitrage option strategy that works for the off-the-floor-trader any more than going long or short the stock, except that the options give you more leverage. Even in metooxx's case, I think the edge has been dwindled to locks where you still have to decide on a DIRECTION.

Doesn't mean there aren't strategies out there that give you true edge just from the use of options as opposed to the underlying, just means I have never seen it.

nitro

Nitro,
I would have to say for the most part your comments are correct, and the words you put in caps are what options come down to, being a trader, and ending up with some directionality to your positions at some point.

(Don't understand first line of your post? A word missing?)

 

[ukxgerard]

Hi,

I understand Charlie Cottle is no more with thinkorswim.com. Does anyone know where he has moved onto?

Thanx

 

[Cutten]

Quote from nitro:


To be honest with you, I don't really get what the point of options are other than leverage. I mean, unless you understand how to be profitable just buying calls and puts, no matter how sophisitcated you are in putting combinations of fancy options positions, you still end up a loser. My point is that there is no way to avoid being a TRADER and at some point that means putting on a directional trade.

Trading the underlying doesn't allow you to bet on volatility or skews in the distribution of future prices, nor does it allow you to comprehensively limit risk whilst retaining upside potential.

 

[Baruch]

Are you sure your money is safe?

 

[Doubter]

Quote from Baruch:

Are you sure your money is safe?

______________________________________

Why? Have you heard something?

 

[privateisland]

Charles Cottle moved? Oh no, he was the best thing since sliced bread. A really gifted trader, who could disect the most complicated positions (and a nice guy). If I remember right he was going to start a hedge fund. Maybe that's why he moved. If anybody knows the story I'd love to hear it.

 

[Baruch]

No.

 

[SProbability]

Quote from Baruch:

No.

So why the rhetorical question?

 

[Baruch]

Because you have to think about this problem.