You know, there was a guy on ET not long ago with the same thoughts as you. I sometimes wonder what the hell happened to that guy. His name was qd something or other.
You see options buyers are doomed.
- Thread starter qdz2
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You know, there was a guy on ET not long ago with the same thoughts as you. I sometimes wonder what the hell happened to that guy. His name was qd something or other.
Quote from qdz2:
You see, I am not predicating but stating a fact of observation. This fact holds true so far. That is, during expiration week even we have plenty of economic news, earning reports, and development of political situations. The market hardly move in either direction. I am talking about movement of over 300 points for Dow and 30 points for SP500 in 1 or 2 weeks.
So options buyers generally are doomed. I have no problem with this fact. What I have problem with is the PDT rules on stock options. This is not fair!
I dont understand which evidence leads you to this opinion. It appears to me to be an opinion borne only of recent market activity, and not based on all of the possible outcomes. Markets expand and contract, nothing new there. Volatility expands and contracts. You certainly would not want to be a net seller if you have nothing to cushion you against a massive one way move and you are short alot of delta, gamma, etc...And certainly there are times where being long options in a contracting market with no direction would kill you as well...
What you say is true about general market behaviours. What I was talking about is specific market behaviours near options expiration. Neither is something new. Options sellers tends to have larger funds since they need to meet higher margin requirement. They have more buying power to push around the market in range when it is close to expiration. Yes, this is my opinion and has been manifested as facts in many occassions. You have to admit the market movers and manipulators have more power.
Owners of options may not be doomed,
but it could take a long time to reach the long run.
Say owners are a 99 to 1 dog to make money on
any given day, but the time they win the payoff is
150 times the average loss.
It's definitely positive expectancy but it could take
years before the option owner makes money.
but it could take a long time to reach the long run.
Say owners are a 99 to 1 dog to make money on
any given day, but the time they win the payoff is
150 times the average loss.
It's definitely positive expectancy but it could take
years before the option owner makes money.
Quote from qdz2:
What you say is true about general market behaviours. What I was talking about is specific market behaviours near options expiration. Neither is something new. Options sellers tends to have larger funds since they need to meet higher margin requirement. They have more buying power to push around the market in range when it is close to expiration. Yes, this is my opinion and has been manifested as facts in many occassions. You have to admit the market movers and manipulators have more power.
I will agree on that point...Options expiration itself is definitely a skewed game...There are all sorts of techniques that seem to be used to either compress and expiration or to engineer a "jump" from one price range to the next either pre-market with a gap and compression or off the back of an economic report...What is most intersting about options expiration week nowadays, as compared to say 1999-2000, is that we rarely, if ever have explosive one week moves from point to point...Instead, the tendency is to compress into the center following one large range day...
Either way, this is the environment to short premium.
Today I put $300 in an online casino at 11:15am. I played video poker, and 75 minutes later I got a Royal Flush. It paid $1,000. I turned $300 into $1,240 in one hour.
No PDT rules, no time-decay, no weekends or monday holidays or off hours. My recommendation: #5
Yeah, baby, buyers got mojo this time. MSFT shocking manipulation move. Hard to see how market react tomorrow. After hour, markets is down big. Tomorrow will be interesting.
(I shouldn't make such comments. But to me, this is interesting to see all these happening just before expiration. But I bet the original manipulators will still have control tomorrow.)
(I shouldn't make such comments. But to me, this is interesting to see all these happening just before expiration. But I bet the original manipulators will still have control tomorrow.)
WE are watching...
