SPI 200 and Futures Options

[Pit Trader]

Are you familiar with the phrase "picking up pennies in front of steam rollers"?

Don't get me wrong I don't have a problem with the premise of the trade, it's the hedging strategy and margin implications that we all think will blow you up one day.

Also don't get us wrong, I don't anyone gives a rats about you and your capital, but in a discussion on a public forum, there are lurkers watching and listening. The discussion and criticism is for the benefit of all.

I do understand your point...and it is valid.
My role here is an insurance business .
I realize this and aware of the risks.

Understand this...

My brother works for JP Morgan in NY in the derivatives dept.
He deals with hedge funds and the like.
You guys need to confront the fact that they have so many more
resources at their disposal.There is no way you can compete long term with these guys using your computer models ect.

 

[mazzatelli]

My brother works for JP Morgan in NY in the derivatives dept.
He deals with hedge funds and the like.
You guys need to confront the fact that they have so many more
resources at their disposal.There is no way you can compete long term with these guys using your computer models ect.

lol, you're bro is not the only one who works in a deriv dept of an iBank

Hedge funds, with other resources at their disposal, wouldn't go shorting otm vanilla index puts when they can use binary exotics instead.

You should get some education from your bro, because a trader who can't comprehend the basics of Greek risk shouldn't be trading derivatives

 

[wayneL]

I do understand your point...and it is valid.
My role here is an insurance business .
I realize this and aware of the risks.

Understand this...

My brother works for JP Morgan in NY in the derivatives dept.
He deals with hedge funds and the like.
You guys need to confront the fact that they have so many more
resources at their disposal.There is no way you can compete long term with these guys using your computer models ect.

LOLOL

It's nothing to do with trying to compete with JPM GS et al with models.

Retail option traders learn models to:

a/ understand options pricing and risk via Greeks

b/ to model returns versus risk in given situations - if/then analysis.

c/ devise an appropriate strategy in a given market and volatility environment

d/ manage risk as events unfold

JPM is irrelevant to that.

 

[wayneL]

lol, you're bro is not the only one who works in a deriv dept of an iBank

Hedge funds, with other resources at their disposal, wouldn't go shorting otm vanilla index puts when they can use binary exotics instead.

You should get some education from your bro, because a trader who can't comprehend the basics of Greek risk shouldn't be trading derivatives

Indeud.

 

[Pit Trader]

lol, you're bro is not the only one who works in a deriv dept of an iBank

Hedge funds, with other resources at their disposal, wouldn't go shorting otm vanilla index puts when they can use binary exotics instead.

You should get some education from your bro, because a trader who can't comprehend the basics of Greek risk shouldn't be trading derivatives

I understand all the risks and am aware of how the deal with them.

My education is money in the bank.

 

[wayneL]

I understand all the risks and am aware of how the deal with them.

My education is money in the bank.

My feeling is that you haven't received "an education" yet. That much is obvious.

 

[Pit Trader]

My feeling is that you haven't received "an education" yet. That much is obvious.

Lol, i've got another 6 years and 10,000 posts to get a good education.

 

[wayneL]

Lol, i've got another 6 years and 10,000 posts to get a good education.

Resorting once again to amateur and childish straw man arguments doesn't help your standing here on ASF Pit, it rather cements the perception of your lack of knowledge.

If you want to play with adults you should do so on the basis of sticking to the topic at hand - option risk and reward.

 

[Pit Trader]

Resorting once again to amateur and childish straw man arguments doesn't help your standing here on ASF Pit, it rather cements the perception of your lack of knowledge.

If you want to play with adults you should do so on the basis of sticking to the topic at hand - option risk and reward.

Scroll through the post and check where the hostility has come from.

Knowledge comes from being in the market every day and surviving the bumps
and bruises.Do you think the traders in the early days used computer models to the earn a keep.I have friends who used to be on the SFE floor they dont use models ect to feed themselves.They still rely on their intuition.

 

[nunthewiser]

intresting thread ...... heres a summary so far.

1. Brokers post there clients statements on websites.

2. family member works for JPM

3. have friends on the sfe floor

4. makes a sheetload of cash.

5. WayneL has lots of posts and educated.

All of the above have been posted during this discussion to validate that the poster is correct and has the relevant trading experience and contacts to educate us mere mortals into being Guru options traders also .

Please continue.

 

[wayneL]

Scroll through the post and check where the hostility has come from.

Knowledge comes from being in the market every day and surviving the bumps
and bruises.Do you think the traders in the early days used computer models to the earn a keep.I have friends who used to be on the SFE floor they dont use models ect to feed themselves.They still rely on their intuition.

There is no hostility, just differences of opinion.

We're talking options still?

Floor traders have a thorough theoretical grounding in options pricing, they are so-called conscious competents. They have a rich mental map of how prices move through this ground. IOW they have their own computer program - AKA the brain.

Retail traders also develop this over time. I rarely refer to my modelling software because I have developed a rich mental map. This is just a function of time and expreince.

Of course most on the SFE floor were straight out futures traders. As futures pricing is linear, there is no requirement for any model knowledge.

If you went to any MM or specialist and said you don't need to know option models (ie the justification for the option price at that point in time), they would laugh you off the floor.

 

[Pit Trader]

intresting thread ...... heres a summary so far.

1. Brokers post there clients statements on websites.

2. family member works for JPM

3. have friends on the sfe floor

4. makes a sheetload of cash.

5. WayneL has lots of posts and educated.

All of the above have been posted during this discussion to validate that the poster is correct and has the relevant trading experience and contacts to educate us mere mortals into being Guru options traders also .

Please continue.

Na your missing the point........point is no one trades options this.

That tells you something too obvious to ignore.

 

[wayneL]

Na your missing the point........point is no one trades options this.

Eh?

Something missing there. What are you trying to say?

 

[Pit Trader]

There is no hostility, just differences of opinion.

We're talking options still?

Floor traders have a thorough theoretical grounding in options pricing, they are so-called conscious competents. They have a rich mental map of how prices move through this ground. IOW they have their own computer program - AKA the brain.

Retail traders also develop this over time. I rarely refer to my modelling software because I have developed a rich mental map. This is just a function of time and expreince.

Of course most on the SFE floor were straight out futures traders. As futures pricing is linear, there is no requirement for any model knowledge.

If you went to any MM or specialist and said you don't need to know option models (ie the justification for the option price at that point in time), they would laugh you off the floor.

At least we agree on something.

 

[Pit Trader]

Eh?

Something missing there. What are you trying to say?

According to the posts from the experts on this forum,no one trades options like I do !!!

 

[mazzatelli]

According to the posts from the experts on this forum,no one trades options like I do !!!

Definitely not iBanks, MM's and hedge funds - you seem to assume that all of us here are mom & dad investors/traders and aren't employed in the industry

I forecast an outside handle will arrive in the forum sometime soon

 

[wayneL]

According to the posts from the experts on this forum,no one trades options like I do !!!

Maybe, maybe not. So what?

 

[Pit Trader]

Definitely not iBanks, MM's and hedge funds - you seem to assume that all of us here are mom & dad investors/traders and aren't employed in the industry

I dont assume anything...Anyone who is brave enough to trade their own account needs to be taken very seriously,risking your own hard earned is not to be taken litely.

I take comfort in the fact no one trades my style.

 

[Pit Trader]

Maybe, maybe not. So what?

Well no one has put their hand to to support my method...only torched it.

So I assume I'm the Lone Ranger...This gives me comfort.

 

[mazzatelli]

I dont assume anything...Anyone who is brave enough to trade their own account needs to be taken very seriously,risking your own hard earned is not to be taken litely.

I take comfort in the fact no one trades my style.

Didn't you say hedge funds trade the same as you??

I never mentioned being a big player.
I have seen the statements there is no reason for me to
make any of this up.It's fact.

Anyway - I've had my fun