Absolutely not!!! Nothing to do with collapsing vols...harryp said:Someone said that a rising stockmarket makes every investor a financial genius. Do'nt you think that your success at selling premium over the last eighteen months has got a lot to do with collapsing vols ?
TheBramble said:Absolutely not!!! Nothing to do with collapsing vols...
Success at selling premium has EVERYTHING to do with basic probability...
Remember 1:7...(sorry RR)
Not only obvious Harry, but quite unrelated to my comment.harryp said:Tony
Lets presume that in Jan 2003 with the ftse at 4000 and vols at 25% windle sold an atm call option with 30 days to run and received X.
!2 months later ftse is again at 4000 vol is at 15% and he does the identical trade. Does he receive X ? Of course not , he gets much less.
When windle sells premium it means he is going short. So if you sell on day 1 and buy back on day 20 at a profit, and during that time vol goes from 25% to 21% then you've made some of your profit due to the drop in vol.
Surely that's obvious ?
I'd be the first to acknowledge RR's superior knowledge in options. However, neither he, nor you have contested my position that selling options has a far higher probability of profit than buying them.harryp said:" success at selling premium has EVERYTHING.............. " NONSENSE !!
I had a quick look at your exchange with RR. Read his comments again because he knows a great deal more about options than you do.
TheBramble said:Not only obvious Harry, but quite unrelated to my comment.
However, I'm sure many will appreciate the basic math lesson.
One small correction though. Unless I'm mistaken, when 'windle sells premium' - it doesn't mean he's going short. He doesn't have to buy it back - it can expire worthless, which the majority do. He's already received his premium.
I'd be the first to acknowledge RR's superior knowledge in options. However, neither he, nor you have contested my position that selling options has a far higher probability of profit than buying them.
BTW - we're all way off-topic on this thread with this stuff and if anyone want to carry it on, I'd suggest the options forum would be a good place for it.
harryp said:You're missing the point re the benefits of selling premium in a mkt where vol is steadily decreasing otherwise you would'nt have dismissed my original comment.
If windle is selling premium it means he is going short. The way in which the position is closed does'nt change anything [ if you short a ftse future do you have to buy it back ?]
You are wrong to assume that because most option expire worthless it is more profitable to sell options. [ you can have 5 losing trades , 1 winner ....... and still make a profit on the day.]
I'm glad you're happy!... In the words of Ken Dodd (He beat the taxman- an example to us all : "Happiness, Happiness...." (altogether now- especially the JUDGES) I DREDD the answerRognvald said:
Rognvald said:Ped´ant
n.1.A schoolmaster; a pedagogue. A pedant that keeps a school i'th' church. - Shak.
2.One who puts on an air of learning; one who makes a vain display of learning; a pretender to superior knowledge. A scholar, yet surely no pedant, was he. - Goldsmith.
For the benefit of those who may not know what it means
Rognvald said:Not at all, as it is you who makes a virtue of the quality you purport to describe.
From the shorter Oxford English Dictionary Vol II:
"Pedant - of obscure origin.
1 A schoolmaster, teacher or tutor.
2 A person who overrates book learning or technical knowledge , or parades it ; one who has mere learning without practical judgement ; one who lays an excessive stress upon details or upon strict adherence to formal rules ; occasionally - one who is possessed by a theory, "
You certainly are pedantic but fortunately we do not live in a pedantocracy
No, just that I have been vrey ill and I have not yet recovered fully.bracke said:SOCRATES
When this thread was split from 'no indicators - revisited' I expected it to move on along the route that you originally started. Unless I am missing something it appears to have come to a halt in that direction.
Is it your intention to carry on with your original method of imparting your trading style, or apart from general posts, is that it?
Regards
bracke
SOCRATES said:No, just that I have been vrey ill and I have not yet recovered fully.