Convinced nothing works

[orix]

Straddles, strangles, bull spread, bear spread, iron condors, butterflies...... Its all ****e over the long run.

 

[nunthewiser]

ya might need to get a job then champ

 

[skyQuake]

ya might need to get a job then champ

I lol'd

 

[Chris45]

Straddles, strangles, bull spread, bear spread, iron condors, butterflies...... Its all ****e over the long run.

Probably the best example of the Zero Sum Game you'll find. The only winners are the brokers.

 

[mazzatelli]

Straddles, strangles, bull spread, bear spread, iron condors, butterflies...... Its all ****e over the long run.

Unless you're a MM, they are -expectancy. Learn to adjust/lock
Otherwise take nuns advice

 

[wayneL]

Nothing works.
Everything works.

The toughest thing is that there is so much BS out there; which prompts people to do the wrong things.

 

[Grinder]

Straddles, strangles, bull spread, bear spread, iron condors, butterflies...... Its all ****e over the long run.

Don't know how you trade but if your banking on a strategy to get the job done for you, you might as well take nuns advice. Like mazza said it's all about adjustments & risk management, untill you get that down pat it is all ****e.

 

[Cartman]

Straddles, strangles, bull spread, bear spread, iron condors, butterflies...... Its all ****e over the long run.

]


Hi Orix ..... first post ... trading options !! .. More info required on your predicament/dissatisfaction methinks !!

 

[Timmy]

Orix sounds like a client/victim of <insert name of any dodgy 'educator' here>.

 

[Buckeroo]

There seems to be a couple of first timers coming in with a bang just recently. Don't say a lot, just the initial tyrant

Coincidence?

Cheers

 

[wayneL]

Straddles, strangles, bull spread, bear spread, iron condors, butterflies...... Its all ****e over the long run.

There is actually an error of logic in the OP.

Let's look at the example of straddles and let's say some trader took every long ATM straddle over a long period of time.

Well guess what? There are two sides to every trade.

If those long straddles are a loser over the long run, what does that mean?

Yep! You guessed it, if you wrote every corresponding short ATM straddle, in other words, you took the other side of every one of the first trader's trade, YOU ARE A WINNER OVER THE LONG RUN.

(N.B. This is just an example and not a suggestion to trade short straddles)

If you're losing on bull spreads, somebody else is making money on the bear spread etc etc.

This is what I mean by:

Nothing works.
Everything works.

FWIW

 

[cutz]

hi orix,

If you don't mind why don't you tell us what went wrong, at least maybe we can all learn something from it, i can only assume you've been caught out in this rally.

 

[orix]

Hello Wayne,
Your analogy of being on the right side of a straddle as being proof that systems do work seems to me to be the same as saying if you bet on black when the balls rolls onto a red number your system is still a winner. Everything works.... but does it work above and beyond chance.

 

[gooner]

There is actually an error of logic in the OP.

Let's look at the example of straddles and let's say some trader took every long ATM straddle over a long period of time.

Well guess what? There are two sides to every trade.

If those long straddles are a loser over the long run, what does that mean?

Yep! You guessed it, if you wrote every corresponding short ATM straddle, in other words, you took the other side of every one of the first trader's trade, YOU ARE A WINNER OVER THE LONG RUN.

If you're losing on bull spreads, somebody else is making money on the bear spread etc etc.

This is what I mean by:

Nothing works.
Everything works.

FWIW

Except of course when both sides are dealing with a provider who charges huge margins and brokerage and thus is the only winner.

 

[wayneL]

Hello Wayne,
Your analogy of being on the right side of a straddle as being proof that systems do work seems to me to be the same as saying if you bet on black when the balls rolls onto a red number your system is still a winner. Everything works.... but does it work above and beyond chance.

Yes.

The key is in pricing, viz, volatility. You take a volatility bet every time you trade options, whether aware of it or not.

To be successful in options you have to get good at trading volatility... (or be very good at picking direction). Straddles are a prime example of this.

The really big problem in Option Land is how they are being taught. Going back to the straddle, what "The Big O" teaches is a disgrace and a certain loser. It's not just them either, there are clowns everywhere. The Aussie scene is full of them.

If you can find the *right* information and grasp the right attitude to options trading and you're set IMO.

 

[wayneL]

Except of course when both sides are dealing with a provider who charges huge margins and brokerage and thus is the only winner.

Well I can't help it if people insist on dealing with sheisters.

I pay 75c per contract and refuse to play with super wide spreads.

 

[cutz]

refuse to play with super wide spreads.

LOL,

Only last week i commented on how XJO's on the ASX aren't too bad only to be tripped up yesterday with a half baked spread with way too much negative theta (the WOTM short leg was a problem i chickened out).

Time to scale back on the ASX i think and start getting accustomed to early starts.

 

[orix]

Wayne

If historic volatility is at an all time low.... so what. It doesnt mean that volatility will turn around and move higher (it may go even lower). Its as meaniningless as a share price being at a 52 week low. I bet if you trade volatility in that manner, that if you were to turn your thinking around and sell when volatility is low and buy when it is high you will end up at the same place. Sounds crazy but nearly everyone is wrong half the time so how can you go wrong?

Short term (and to an extent long term) sharemarket movements are so full of noise and chaos i dont believe the key lies with trading greeks or trying to predict price fluctuations. Perhaps it lies in risk management but I'm not convinced there is such a thing. Its a buzz word in my opinion that doesnt really mean anything. If there is a risk management system that works over time on a 50/50 win/lose ratio.... show me it.

 

[Knobby22]

Orix

You should read "The way of the Turtle". An excellent book with a lot of practical knowledge and experience. You need a different view on this. This will help.

I'm not a short term trader but the point is you need an edge. I have my edge. Others have theirs.

 

[mazzatelli]

If historic volatility is at an all time low.... so what. It doesnt mean that volatility will turn around and move higher (it may go even lower). Its as meaniningless as a share price being at a 52 week low.

Sorry. Vol [implied or stat] exhibits different sylized facts to financial time series.
Vol tend to vary within a fixed range [weakly stationary] and mean reverts, which stock prices do not [non stationary data].

Greeks are part of risk management

If you believe your statements, don't trade