Watch HowardCohodas Trade Index Options Credit Spreads

This is a discussion on Watch HowardCohodas Trade Index Options Credit Spreads within the Trading Journals forums, part of the Reception category; Originally Posted by arabianights It is, actually, subject to correct money management. Of course as the learned DT says this ...

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Old Dec 5, 2010, 7:00pm   #76
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

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Originally Posted by arabianights View Post
It is, actually, subject to correct money management.

Of course as the learned DT says this assumes infinite granularity, but that isn't as much of a problem as you may think.

P.S. It is not a theorem. You may find this overly pedantic but it's pretty important.
Isn't the application of Gambler's ruin money management? I am implying money management by referencing Gambler's ruin.

Pedant away. Back at you.
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Old Dec 5, 2010, 7:07pm   #77
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

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My point was rhetorical. It is impossible to prove any trading strategy has a positive expectation as the set of possibilities is unbounded and uncertain.

With rolling a dice there is risk but no uncertainty.
In a trading system there is risk and uncertainty.
First, are you claiming your analogy of the roulette strategy has a positive expectation?

Second, if a strategy has a fixed risk and a fixed return and a historically validated probability of success/failure, how do you claim it is unbounded and without the ability of making a valid estimate of mathematical expectation?

A lot of profit is made by companies over long periods of time with historically validated data in the face of uncertainty. The insurance industry comes to mind as one.
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Old Dec 5, 2010, 7:11pm   #78
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

no no, it is obvious that any roulette strategy has a negative expectation.

I may need to read more of your method (although I have read this whole thread) but an iron condor does not have a fixed risk...?
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Old Dec 5, 2010, 7:16pm   #79
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

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I may need to read more of your method (although I have read this whole thread) but an iron condor does not have a fixed risk...?
Show me where I miscalculated. An Iron Condor is made up of a CALL spread and a PUT spread with the same number of options on either side of the current underlying price. Each spread is constructed with each leg having the same number of options such that it has fixed risk and fixed reward. How can the combinations of two spreads each with fixed risk and fixed rewards end up with a not having fixed risk?
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Old Dec 5, 2010, 7:51pm   #80
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

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Originally Posted by HowardCohodas View Post
Isn't the application of Gambler's ruin money management? I am implying money management by referencing Gambler's ruin.

Pedant away. Back at you.
I don't care what wiki says, it isn't

Not sure what you mean by "applying" gambler's ruin.
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Old Dec 5, 2010, 8:12pm   #81
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

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Originally Posted by arabianights View Post
I don't care what wiki says, it isn't

Not sure what you mean by "applying" gambler's ruin.
OK. How about this:
Introduction to stochastic calculus with applications By Fima C. Klebaner

or this:
Risk-neutral valuation: pricing and hedging of financial derivatives By N. H. Bingham, Rüdiger Kiesel

OK, I give up. What is it?
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Old Dec 5, 2010, 8:19pm   #82
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

Anyway, Howie, a somewhat different question if I may:

What punishment best fits one who libels the religion of peace?
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Old Dec 5, 2010, 8:30pm   #83
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

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Anyway, Howie, a somewhat different question if I may:

What punishment best fits one who libels the religion of peace?
I'm a Jewish, politically and socially conservative, libertarian who does not believe in capital punishment and carries a S&W M&P 45FS plus a BUG (back up gun) and is prepared to kill anyone who put me or a family member in fear for their lives. I don't think anyone as mixed up as that is capable of rendering an opinion on punishment on any matter.

Last edited by HowardCohodas; Dec 5, 2010 at 9:27pm. Reason: grammer
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Old Dec 5, 2010, 9:08pm   #84
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

he's in the bloody Mossad!

RUN!
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Old Dec 5, 2010, 9:41pm   #85
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

Fuuuuuuuuuuuuccccccccccccccccccccccckkkkkkkkkkkkkk!!!!!!!!!!!!!!!!!!!
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Old Dec 5, 2010, 9:41pm   #86
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

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he's in the bloody Mossad!
I wish.

Arabian has a way of bringing out lots of my secrets. That, unfortunately is not one of them.

Of course, if I was, I could not it admit it. But that's my story and I'm sticking to it.
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Old Dec 5, 2010, 9:42pm   #87
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

that's what someone in mossad would say!
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Old Dec 5, 2010, 9:43pm   #88
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

the correct answer, incidentally, was beheading.
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Old Dec 5, 2010, 9:44pm   #89
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

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that's what someone in mossad would say!
I was only seconds ahead of you. It's scary when we can finish each other's sentences.
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Old Dec 5, 2010, 11:47pm   #90
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

to be honest with you, it is much more likely that someone from the Mossad would try to build rapport with any one Arabian.
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