Best Thread The Options edge (Writing Vs Buying)

[CYOF]

1. The short PUT/CALL has an advantage "EDGE" over the long PUT/CALL .
False

2. The WRITER has the advantage and "EDGE" over the BUYER.
False

3. The BUYER has the advantage and "EDGE" over the WRITER.
False

4. Neither the WRITER or BUYER has the advantage or the "EDGE" over the other.
True

5. Who has more chance to make winning trades entered over the long term. Is it the WRITER or BUYER. And who has more chance of achieving more WINNING trades on the spin?

WRITER in terms of frequency of profitable trade.

To clarify - The writer will make many frequent small profitable trades and very few but substantial losses. The BUYER will make many frequent small losses and very few but substantial profits.

6. MORE than 50% of contracts expire worthless each month.
TRUE - but that statistic is meaningless, and is often used by newbies

7. Options are a wasting asset.
TRUE – but being positive (or negative) theta is not an edge.

CYOF – you need to understand volatility, implied volatility, normal distributions and a healthy dose of skew and kurtosis wouldn’t hurt either. From the questions you’re asking above it’s clear you don’t. Not trying to be condescending, but having read your posts on other threads, it’s clear you’re looking for an argument here rather than genuinely trying to understand option trading.

Profittaker,

I do not hold a grudge with any man when it comes to learning - for, I have read many times, that one of the most noble traits of a Philosopher is to submit during a clear and logical debate, when the facts are presented, and I have great respect for such people and what they handed down to us.

What I am trying to do, is to bring out all the views into the open, so that those who are partaking can evaluate and form their own decisions as to what the facts are, no more, no less.

You should know by now, that when I say something, I mean it.

Let us see how this develops, as it is now too soon to start some serious discussion on the very important questions. Some additional polls are required.

Regards,

 

[CYOF]

#1...........False
#2...........False
#3...........False
#4...........True
#5...........The better trader, irrespective of whether they are "writers or buyers"
#6...........Possibly
#7...........They have a finite life, however, some appreciate in price faster than they decay in theta, while others are overwhelmed by theta decay, so, False.

jog on
d998

Thank you d998,

Your contribution is welcomed, and hopefully you can offer some further insight as we progress into a good discussion on these very important questions - as, I think we all agree on one thing by now, and that is, they are indeed very important questions, as they may well determine what is the best approach for consistent profits in the Options game - which is the ultimate goal of this exercise.

Regards,

 

[Profitaker]

Thank you d998,

Your contribution is welcomed, and hopefully you can offer some further insight as we progress into a good discussion on these very important questions - as, I think we all agree on one thing by now, and that is, they are indeed very important questions, as they may well determine what is the best approach for consistent profits in the Options game - which is the ultimate goal of this exercise.

Regards,

Would you care to actually read the title of this thead ? It clearly says "The Options edge (Writing Vs Buying)". Let me know if you need further clarification regarding what this thread was intended to discuss.

Your hijack of this thread is noted, not least I'm sure by the moderators.

 

[CYOF]

Would you care to actually read the title of this thead ? It clearly says "The Options edge (Writing Vs Buying)". Let me know if you need further clarification regarding what this thread was intended to discuss.

Your hijack of this thread is noted, not least I'm sure by the moderators.

Profitaker, just to clarify, why are you thinking I'm looking for an argument and hijacking this thread?

Describe what the word "ARGUMENT" means, as I am sure it means different things to many people.

Now consider this:

Maybe I am an expert at options, and maybe I am not! But, for the benefit of the readers it does not matter a damn, all that matters is the answers for learning purposes.

Also, if the majority are against the minority that does NOT make the minority WRONG. For it is a well known fact that the MAJORITY lose in OPTION trading!

The minority will always be the winners in Options. What is more, the very small minority, as with all circles in life, consist of an Elite club that know exactly what they are doing.

This Elite club, does indeed, keep their shop doors tightly closed, for if they were to open them there would an influx of SALE seekers – those looking fore that once in a lifetime bargain.

To maintain this level of Trading Mastery, this Elite club operates to the strictest rules and highest principles, and in order to gain entry, one has to show that they are willing to abide by these strict rules.

I can say no more, as I may well and truly regret it, but then again, I have a flaw, and that is I always tell THE TRUTH, but so be it, for that is what I am.

So, maybe in fact I can offer a lot here - or maybe not?

I must now finish for the day, but I will return tomorrow.

Have a nice evening all, and that includes you PT, as I am really a nice fellow if you just get to know me.

Regards,

 

[ducati998]

CYOF

For it is a well known fact that the MAJORITY lose in OPTION trading!

And this statement is based on what evidence?

If we assume that for every seller, there must be a buyer, then simple addition suggests equal numbers of buyers and sellers, thus, how have we moved to a majority/minority distribution with regards to "winning & losing"?

jog on
d998

 

[andycan]

CYOF




And this statement is based on what evidence?

If we assume that for every seller, there must be a buyer, then simple addition suggests equal numbers of buyers and sellers, thus, how have we moved to a majority/minority distribution with regards to "winning & losing"?

jog on
d998

Can i ask you a few questions please? I hope you will answer truthfully? It does NOT matter if you chose NOT to answer truthfully as the only person you would be fooling is yourself.

Re: Your reply in post 239

1. Are all you replies based on your thinking?

2. Or from what the posts you have read on T2w?

3. From books

4. From friends

5. From bloomberg tv.

6. from brokers.

7. From School/Uni

8. Dreams?

9. Or ON WHAT other EVIDENCE??

 

[ducati998]

Can i ask you a few questions please? I hope you will answer truthfully? It does NOT matter if you chose NOT to answer truthfully as the only person you would be fooling is yourself.

Re: Your reply in post 239
1. Are all you replies based on your thinking?
2. Or from what the posts you have read on T2w?
3. From books
4. From friends
5. From bloomberg tv.
6. from brokers.
7. From School/Uni
8. Dreams?
9. Or ON WHAT other EVIDENCE??

andycan

I think that I can answer this quickly and honestly;
My replies in the referenced post were based on;
*Experience
*Books
*Research

All other "options" have, and had, no bearing on my answers.
jog on
d998

 

[CYOF]

Profitaker, just to clarify, why are you thinking I'm looking for an argument and hijacking this thread?

Describe what the word "ARGUMENT" means, as I am sure it means different things to many people.

Now consider this:

Maybe I am an expert at options, and maybe I am not! But, for the benefit of the readers it does not matter a damn, all that matters is the answers for learning purposes.

Also, if the majority are against the minority that does NOT make the minority WRONG. For it is a well known fact that the MAJORITY lose in OPTION trading!

The minority will always be the winners in Options. What is more, the very small minority, as with all circles in life, consist of an Elite club that know exactly what they are doing.

This Elite club, does indeed, keep their shop doors tightly closed, for if they were to open them there would an influx of SALE seekers – those looking fore that once in a lifetime bargain.

To maintain this level of Trading Mastery, this Elite club operates to the strictest rules and highest principles, and in order to gain entry, one has to show that they are willing to abide by these strict rules.

I can say no more, as I may well and truly regret it, but then again, I have a flaw, and that is I always tell THE TRUTH, but so be it, for that is what I am.

So, maybe in fact I can offer a lot here - or maybe not?

I must now finish for the day, but I will return tomorrow.

Have a nice evening all, and that includes you PT, as I am really a nice fellow if you just get to know me.

Regards,

Profittaker, in relation to the “ARGUMENT” question I will shed some light here to assist.

What do you think goes on in the house of parliament?

Do you think they are all there to have a discussion, or telling jokes to each other, or are they arguing points :idea: Should they be made to stop arguing because PT thinks its wrong or T2W says it’s wrong to argue? Do you prefer we all said YES to all your points?

Now, please explain to us all the meaning of your thread?

After all, you are the one that came up with the title. This thread became dead when BULDOZER asked to be banned by Frugi?

That brings me to another point. You seem to have a habit of twisting facts to LIES!

You said on here that Bulldozer got banned and he is not welcome here. Whose voice was that opinion from? Was it 5, 6, or even 9 members, and who elected you to speak for the people? Now just to clear up the situation and bring the TRUTH out , was Bulldozer banned or did he asked to be banned? Do you know the difference between the two questions?

Now let me ask you this PT. Is this thread better off without him?

Are the members better off without his talents and knowledge? After all he did beat 7 of you single handed, did he NOT, and make you all look like ye had no idea as to what ye were talking about in front of 50,000 members.

Personally, I think this thread, and all other derivatives threads are dead without people like him and me. After all, we are all entitled to our opinions, are we not, or is the reign of The Thirty to continue :?:

 

[CYOF]

A full and frank discussion would requier relative strikes & maturities non?

As the tap is open at the moment, so as to speak, here goes:

I can’t partake in a full discussion as I am already breaking the rules of the Elite club for posting my last few posts on T2W. I risk getting kicked out or banned for 6 months from the ELITE 3.4S CLUB, and this is something that I do not want to happen, for obvious reasons. I hope you guys understand & APPRECIATE the risk I am taking.

However, I will clarify the question further for those who are NOT to the ELITE CLUB level standard, which, I can tell you, is VERY HIGH indeed

THE STRIKE IS 6025 AND FTSE EXPIRED AT 5975

The SHORT PUT EXPIRES ITM BY 50 PTS ON FTSE. [WAS A CREDIT OF 120 INITIALLY]

The LONG PUT HOLDER POSITIONS EXPIRES ITM BY 50 PTS ON FTSE [WAS A DEBIT OF
120 INITIALLY]

THE LONG POSITION HOLDER PAID THE SHORT POSITION HOLDER THE INITIAL 120 PTS

So, who made a profit, and by how much?

Once you guys answer the questions I will take another risk and go to the next stage, but remember, if I get spotted by some of the other few Elite 3.4S members, I will surely be told to shut up – just in case you are wondering what has happened. But I will argue that this is all basic educational material only, and is not divulging any REAL SECRETS, which are so closely guarded. They can not throw me out for this, I hope!

Regards,

 

[CYOF]

CYOF

And this statement is based on what evidence?

If we assume that for every seller, there must be a buyer, then simple addition suggests equal numbers of buyers and sellers, thus, how have we moved to a majority/minority distribution with regards to "winning & losing"?

jog on
d998

Let me ask some questions of you d998,

Question No.1

Will all authors of options books will tell you the TRUE figures of the losing majority?

Question No.2

Do you believe for every winner there has to be a loser in Options. If that’s the case than each year there will be no minority or majority. Why then, are people trying to improve their trading if the final results will 50-50 winners and losers?

Question No.3

10 people walk into a betting shop. We don’t know how much cash they each have in their pocket. But, only 2 people come out winning a total of £500 between them. How many losers and winners are the in this scenario?

Question No.4

Out of every 100 accounts that are opened in Options / Futures trading, HOW MANY of the 100 accounts will go bust in first 2 years, do you think?

Hint: Ask a broker and he will tell you the truth in confidence, and then come and share that news with us.

Regards,

 

[neil]

CYOF
Are the son of our very own Soc?

 

[CYOF]

CYOF
Are the son of our very own Soc?

Good morning Neil,

Read your own slogan :cheesy:

Have a nice day - I will return later for busy day ahead.

 

[SOCRATES]

CYOF
Are the son of our very own Soc?

You ought to know better than to ask impertinent questions.:cheesy:

 

[trendie]

is it possible to "walk through" an example, by showing the options being bought/sold BEFORE they end up expiring? ( otherwise this may end up as any other "look what you could have done if..." threads )

also; by identifying yourself as a member of the Elite S-Club, ( Rachel Stevens was my fave although a bit flat-chested for my liking ), havent you marked yourself out already for reprisals by the Thirty?

ducati has made some good points about equal wins/losses which havent been addressed.

are we ever going to "learn" anything ?

 

[SOCRATES]

is it possible to "walk through" an example, by showing the options being bought/sold BEFORE they end up expiring? ( otherwise this may end up as any other "look what you could have done if..." threads )

also; by identifying yourself as a member of the Elite S-Club, ( Rachel Stevens was my fave although a bit flat-chested for my liking ), havent you marked yourself out already for reprisals by the Thirty?

ducati has made some good points about equal wins/losses which havent been addressed.

are we ever going to "learn" anything ?

This is not an options trading school, let us make it clear, it is a discussion about option trading only.

The answer to post number 245 has already been adressed in post 250.

You ought to read it again, or several times if necessary to ensure you understand it.

 

[CYOF]

is it possible to "walk through" an example, by showing the options being bought/sold BEFORE they end up expiring? ( otherwise this may end up as any other "look what you could have done if..." threads )

also; by identifying yourself as a member of the Elite S-Club, ( Rachel Stevens was my fave although a bit flat-chested for my liking ), havent you marked yourself out already for reprisals by the Thirty?

ducati has made some good points about equal wins/losses which havent been addressed.

are we ever going to "learn" anything ?

As Socrates rightly says, this is not a school, but a discussion about the subject matter, for it is, after all, a public forum for discussion. The Thirty will only reign as long as the people allow them to reign

If you wan't your hand held all of the time, then you will end up the same as many others do.

But, if you wan't to start thinking for yourself, and start questioning what others say, in relation to what is factual, then you will indeed learn something of value.

As Socrates again noted, I have made a reply to Ducati's #245 post in my #250 post.. Perhaps you should change your way of thinking and read it again Trendie, if you really want to learn something :idea:

On that note, do you agree with his analysis, and what about you Profitaker, what do you think?

Are Ducati's comments 100% correct in post 245?

 

[A Dashing Blade]

. . . But I will argue that this is all basic educational material only, and is not divulging any REAL SECRETS, which are so closely guarded. . . .

Huh, unless I'm mistaken, you're implying that you know stuff that option market makers with getting on for 25 years experience don't? ?

 

[grantx]

CYOF,

Put buyer = -70 (loss)
Put seller = 70 (gain)

At expiry, put = strike - underlying or zero. Or is there something more?

Grant.

 

[andycan]

If we assume that for every seller, there must be a buyer, then simple addition suggests equal numbers of buyers and sellers, thus, how have we moved to a majority/minority distribution with regards to "winning & losing"?

jog on
d998

How many of you go along with d998 comments.
I am trying to figure out how you guys think and what you guys believe to be the TRUTH !!
now this should be interesting.

 

[A Dashing Blade]

THE STRIKE IS 6025 AND FTSE EXPIRED AT 5975

The SHORT PUT EXPIRES ITM BY 50 PTS ON FTSE. [WAS A CREDIT OF 120 INITIALLY]

The LONG PUT HOLDER POSITIONS EXPIRES ITM BY 50 PTS ON FTSE [WAS A DEBIT OF
120 INITIALLY]

THE LONG POSITION HOLDER PAID THE SHORT POSITION HOLDER THE INITIAL 120 PTS

So, who made a profit, and by how much?

Taken at face value and unless it's a trick question . . .

Writer takes 120 in, pays out 50 at expiry so makes profit of 70 (you can argue the toss about the percentage profit made).
No risk of assignment as they're european style.
I'm unsure as to how margin requirements work in ftse these days but would imagine that, net net, there's a bit of positive investment income to come if the margin is able to be funded by money market instruments.

Buyer pays 120, recoups 50 so is down 70

Other things to consider . . .
What the market did between taking the position and expiry and how that imapcts margin funding (ie market could have seriously dumped out so increasing required margin, may have dumped out so far that margin rules were changed - something I've seen twice in my careeer -).