Plain Vanilla Options Trades.

[Profitaker]

I don't understand how this proves writers have the edge, since you'd have made similar money buying the calls yesterday.

It doesn't prove writers have the edge, far from it. Indeed you'd have made more money buying an equivalent delta Call option yesterday than selling the put. Partly because of the assymetric Vol skew inherent in index options, but mainly because of the curvature (gamma) increase as the underlying moves nearer the strike.

 

[A Dashing Blade]

Latest...Showing on your screens...

Trade B has just been closed.

...Closed 5 June 6025 FTSE Index 100 puts @ 122 for a profit of 10 points

= 5 X 10 X 10 = £500 less costs)

And...

Latest.....Showing on your screens...

Trade D has just been closed

Closed 2 Apr 5925 FTSE 100 Puts @ 60 for a profit of 16 points.

(2 X 10 X 16 = £320 less costs )

Congrats!
However, I fail to see that this demonstrates the writer has the edge.

Your June 6025 puts went thru the screens at 10.35.58 yesterday.
At that time, the 6475 calls (same month, even more ootm) were 108.5-115.5
The March future (what the mm's would, in prctice use as a hedge) ticked at 6211

You closed the position today at 08.16.50
Call were quoted at 118.5-1-125
Future was 6244

---------------------------------------------

For the Apl 5925 puts opened @ 12.29 yesterday,
Apl 6425 calls (again, even more ootm) quoted 51.5-55.5
the March future was 6185.5

Today you closed your puts @ 08.21.14
Apl 6425 calls quoted at 68.5-72
March future @ 6245

---------------------------------------------

Please explain your rationale for concluding that the writer has the edge.;

 

[SOCRATES]

Thanks Socrates, I understand that and I'm not criticising. What this thread demonstrates to me is that you have an edge - ie a good call on market direction, but it doesn't demonstrate that writers have the edge (which is the point of thread), because you'd have made similar money buying calls yesterday.

Yes, but you see an edge is a cluster of faculties. Included in this cluster there are several components. Of these several there are two which are knowledge and skill.

Knowledge and skill are separate to statistical advantage.

Why should I deliberately choose the posture with less statistical advantage ?

It has been clearly shown the Writer has 3 chances out of 4 of making a profit, whereas the buyer has neen shown to have 1 chance in 3 at best.

So why go looking for aggravation where none exists ? I am not interested in finding the difficult way to achieve objectives, when the easy way is readily available.

 

[Splitlink]

Split,

The CHOICE IS ALWAYS YOURS - ALWAYS HAS BEEN - ALWAYS WILL BE

Do you want US to go and hold you hand,
:

Thanks and no, thanks Both of you? What a repugnant idea.

 

[CYOF]

Thanks and no, thanks Both of you? What a repugnant idea.

But it is NEVER TOO LATE to learn my good friend :idea:

 

[SOCRATES]

Congrats!
However, I fail to see that this demonstrates the writer has the edge.

Your June 6025 puts went thru the screens at 10.35.58 yesterday.
At that time, the 6475 calls (same month, even more ootm) were 108.5-115.5
The March future (what the mm's would, in prctice use as a hedge) ticked at 6211

You closed the position today at 08.16.50
Call were quoted at 118.5-1-125
Future was 6244

---------------------------------------------

For the Apl 5925 puts opened @ 12.29 yesterday,
Apl 6425 calls (again, even more ootm) quoted 51.5-55.5
the March future was 6185.5

Today you closed your puts @ 08.21.14
Apl 6425 calls quoted at 68.5-72
March future @ 6245

---------------------------------------------

Please explain your rationale for concluding that the writer has the edge.;

It is simple...... the evidence speaks for itself,.......... the two remaining written puts I made are showing higher profits today and they are hold situations, that is the reality and not academic arguments as to whether the alternative works or not. "Being in the know" as to what "other people are thinking" is also an advantage. This of itself is not an edge but an extra benefit there to be taken advantage of.

 

[CYOF]

Congrats!
However, I fail to see that this demonstrates the writer has the edge.

Your June 6025 puts went thru the screens at 10.35.58 yesterday.
At that time, the 6475 calls (same month, even more ootm) were 108.5-115.5
The March future (what the mm's would, in prctice use as a hedge) ticked at 6211

You closed the position today at 08.16.50
Call were quoted at 118.5-1-125
Future was 6244

---------------------------------------------

For the Apl 5925 puts opened @ 12.29 yesterday,
Apl 6425 calls (again, even more ootm) quoted 51.5-55.5
the March future was 6185.5

Today you closed your puts @ 08.21.14
Apl 6425 calls quoted at 68.5-72
March future @ 6245

---------------------------------------------

Please explain your rationale for concluding that the writer has the edge.;

Do you really think that evryone is not aware that THE MARKET MOVES

It is how one TRADES as the market moves which will determine HOW MUCH ONE MAKES.

If you continue to focus on ISOLATED MOVEMENTS, instead of focusing on what is in your own best interests, then, YOU REALLY SHOULD NOT BE TRADING.

You can, of course, go off and INVEST if you like, but we all know what INVESTING has to offer, but if this is what a person wants, then so be it: for:

THE CHOICE IS ALWAYS YOURS - ALWAYS HAS BEEN - ALWAYS WILL BE :idea:

 

[A Dashing Blade]

It is simple...... the evidence speaks for itself,.......... the two remaining written calls I made are showing higher profits today and they are hold situations, that is the reality and not academic arguments as to whether the alternative works or not. "Being in the know" as to what "other people are thinking" is also an advantage. This of itself is not an edge but an extra benefit there to be taken advantage of.

So, and a serious question Sir, your phrase "as to whether the alternative works or not." implys that you claim "an" edge rather tha the "best" edge?

 

[A Dashing Blade]

. . .
If you continue to focus on ISOLATED MOVEMENTS, instead of focusing on what is in your own best interests, then, YOU REALLY SHOULD NOT BE TRADING.

CYOF/Bulldozer/Struthio . . . your own best interests are dictated by your own risk adversion.

 

[SOCRATES]

So, and a serious question Sir, your phrase "as to whether the alternative works or not." implys that you claim "an" edge rather tha the "best" edge?

There are degrees of edges, yes, but this is not the correct thread to discuss such topics.

 

[zupcon]

I draw your attention (again) to this particular "fact" which is quite clearly stated in sites guidelines.

7.13 Do not "shout" online (using all CAPITAL LETTERS). It's considered bad net etiquette, makes other members uncomfortable, and is difficult to read.

regards
zu

 

[barjon]

thanks, zu

i've deleted the post you quoted but your sentiments and the extract from the guidelines are very pertinent and I hope CYOF takes note

cheers

jon

 

[SOCRATES]

So, and a serious question Sir, your phrase "as to whether the alternative works or not." implys that you claim "an" edge rather tha the "best" edge?

As I explained before this is not the correct thread in which to discuss edges but just to quickly clarify...for the purpose of this thread and to show the Writers have an edge over the Buyers, it is sufficient to display there is an edge.

A best edge or a superlative edge or even a comprehensive edge are different edges. They serve higher purposes and specific stategies beyond the scope of this thread and indeed, this discussion.

They are not included in this excercise as it is not necessary to use them for the purpose of this thread, and so the simplest edge is sufficient, being the odds are in favour of the writer statistically ccmbined with proper timing.

 

[Ras1974]

Thank you Spitty....I am commencing operations right now...fed up with being criticised all the time...so it is time to show teeth...he he

Selling 5 June 6025 puts price order is in ...waiting..... limit 135

We will call this A.

Just for the record are you selling April or June Puts?

Best of luck.

 

[Crap Buddist]

As I explained before this is not the correct thread in which to discuss edges but just to quickly clarify...for the purpose of this thread and to show the Writers have an edge over the Buyers, it is sufficient to display there is an edge.

A best edge or a superlative edge or even a comprehensive edge are different edges. They serve higher purposes and specific stategies beyond the scope of this thread and indeed, this discussion.

They are not included in this excercise as it is not necessary to use them for the purpose of this thread, and so the simplest edge is sufficient, being the odds are in favour of the writer statistically ccmbined with proper timing.

But what if the call options trader, filters opportunities by using an edge to enable him to assume the more risky (but what he or she see's as actually smarter trades based on risk/reward) call option trades? which offer limited known risk with greater returns over writers?

I mean if 75% of calls expire worthless, and the trader using his edges filters to the point that theres a 50/50 or better chance of the call gaining significantly wouldnt that be a trader with a greater edge and the trader uses it to exploit for maximum return for their risk?

Hmm then the question of who has the greater edge writers or buyers surely would be what edges they know or use? Now if the question is loaded by use of we can only use the simplest of edges i.e statistical odds without traders intelligence edges then , yes i'd say the writers based on those conditions have the edge, but to me the definitive who has the edge question still remains unaswered, because traders have a choice to use all edges?

Now I ask you this, with all your own personal knowledge expertise etc can you see or do you ever exploit buying calls or can you do it, or think that it can be done consistently using all your available edges?

Or another way do you think you personally could outperform a typical writer of options but you could only buy calls ? Is it possible.

The next challenge maybe?

Cheers.

 

[SOCRATES]

Just for the record are you selling April or June Puts?

Best of luck.

June...it's clear is it not ?

Thank you for your good wishes, but luck does not come into it I assure you, because luck is what gamblers resort to rely on.

By the way, will you please let us have your vote as to who has the edge,
the Writers or the Buyers of Options, thank you.

 

[SOCRATES]

But what if the call options trader, filters opportunities by using an edge to enable him to assume the more risky (but what he or she see's as actually smarter trades based on risk/reward) call option trades? which offer limited known risk with greater returns over writers?

I mean if 75% of calls expire worthless, and the trader using his edges filters to the point that theres a 50/50 or better chance of the call gaining significantly wouldnt that be a trader with a greater edge and the trader uses it to exploit for maximum return for their risk?

Hmm then the question of who has the greater edge writers or buyers surely would be what edges they know or use? Now if the question is loaded by use of we can only use the simplest of edges i.e statistical odds without traders intelligence edges then , yes i'd say the writers based on those conditions have the edge, but to me the definitive who has the edge question still remains unaswered, because traders have a choice to use all edges?

Now I ask you this, with all your own personal knowledge expertise etc can you see or do you ever exploit buying calls or can you do it, or think that it can be done consistently using all your available edges?

Or another way do you think you personally could outperform a typical writer of options but you could only buy calls ? Is it possible.

The next challenge maybe?

Cheers.

Yes, I see the point you are making and the truthful answer is yes, you can make consistent profits our of buying calls in a bull market for example but that is dependent on the practitioner having the expertise to be able to avoid all the ambushes.

This is dependent on the practitioner additionally having not only the dealing skills and deep understanding and knowledge but additionally a multitude of finely honed edges that 99.9 % do not have. Therefore the 1 in 3 and the 3out of 4 statistical ratios do not work so efficiently in favour of their buyer however deep the understanding, knowledge and dealing skills might be.

It is patently obvious that the 1 in 3 and 3 out of 4 statistical ratios work out in favour of the writer. This already, without the additional knowledge, understanding and dealing skills is an advantage. It therefore renders all the theoretical knowledge about the greeks and other features secondary.

Therefore approaching all this from the point of view of buying and the greeks and so on, is easily overturned by skilled, informed, carefully assessed prudent writing, is the point I am making, though there are members here who persist to the contrary despite all the evidence, and will continue to persist, for reasons best known to themselves.

 

[SOCRATES]

I will remind viewers that the Written June FTSE 100 index 6025 puts are still running...the price is currently 108...therefore the unrealised profit has soared to £1050...equivalent to 21 points...but the portents....he he "the portents"...all things considered....are sitll bullish in my view so this for the moment is a hold....and my view is that eventually they will expire worhtless anyway as expected.

 

[A Dashing Blade]

I will remind viewers that the Written June FTSE 100 index 6025 puts are still running...

May we enquire as to the margin this position is tying up?

 

[CYOF]

Yes, I see the point you are making and the truthful answer is yes, you can make consistent profits our of buying calls in a bull market for example but that is dependent on the practitioner having the expertise to be able to avoid all the ambushes.

This is dependent on the practitioner additionally having not only the dealing skills and deep understanding and knowledge but additionally a multitude of finely honed edges that 99.9 % do not have. Therefore the 1 in 3 and the 3out of 4 statistical ratios do not work so efficiently in favour of their buyer however deep the understanding, knowledge and dealing skills might be.

It is patently obvious that the 1 in 3 and 3 out of 4 statistical ratios work out in favour of the writer. This already, without the additional knowledge, understanding and dealing skills is an advantage. It therefore renders all the theoretical knowledge about the greeks and other features secondary.

Therefore approaching all this from the point of view of buying and the greeks and so on, is easily overturned by skilled, informed, carefully assessed prudent writing, is the point I am making, though there are members here who persist to the contrary despite all the evidence, and will continue to persist, for reasons best known to themselves.

As usual Socrates, your words are very TRUE.

As this information was deleted over on the other thread - Options Edge - , I will post it again, as it appears to have been deleted in error, for I do not see any RULE breaking here:

Right here are the facts. Please TRY (addressed to Zu) your best to understand what it is we are trying to prove.

1. We are trying to prove that the WRITER has a better chance of beating the BUYER.

2. We are NOT talking about CALL OPTIONS - NOT yet anyway.

3. In the PUT trades at Socrates thread - this thread - " PLAIN VANILLA OPTIONS" there were
buyers and writers invoved.

TRUE or FALSE?

4. Socrates and myself proved the the BUYERS LOST - forget the % gains.

TRUE or FALSE?

5. Please go back to Socrates thread - this thread - and IF you open your God given eyes (addressed to Zu) WIDER, you will notice its all about PUT OPTIONS and who WON and who LOST.

Now, was it the BUYER or the WRITER who won?

We are NOT talking about the size of the PROFITS, for this is secondary :idea: