OT: Options Trading

22 comments

• From978

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  2 years ago

  I did. It was a long time ago. I can't remember the best trades, but I absolutely remember a lot of the worst ones. They all started with me paying a few hundred dollars and getting back zero.
  
  I understand that that's how options work, but in my experience there were about enough winners to cover the losers. I couldn't see the point of taking on extra risk just to break even, and as a statistician I was pretty sure I wouldn't beat the house in the long run.
  
  It's a perfectly reasonable form of entertainment, but it's not an investment strategy for money you need.
• Papi_Chulo

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  2 years ago

  I haven't studied investing so I stay away from stuff like that - me only having very-basic investing knowledge I mainly stick to low-cost ETFs (hardly even do individual stocks) - options are a bit too-gambly for my risk-appetite and level of knowledge - seems options can make one lots of money but can also lose one lots of money - for my risk-tolerance/knowledge-level, I consider basic market investing is already risky-enough
• Tetradon

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  2 years ago

  I've done it, out of the money calls, sold covered calls on things that I own to make a few extra bucks. Win some lose some.
  
  I'm much more about long term investments and personal ventures now. I don't want to have to stare at the ticker screen all day.
• Uprightcitizen

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  2 years ago

  Sinclair I minored in options and derivatives for my MBA but sadly never put it to full use. I was briefly in my career on the trading desk of an energy company doing pretty much that but it was quickly bought out in less than a year and I ended up with what added up to 6 months eqivalent salary in the buyout (maybe that counts as fast trade money). After that went back into engineering. But I have bought/sold/exercised options but have made more frankly in just grinding value stocks and winning on a few long speculative winners.
  
  That's like an answer non-answer to your question.
• Mate27

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  2 years ago

  Covered calls are easier to utilize. If you play the other stuff long enough you win some and lose some, but after a while you’ll find there’s a time you’ll get your ass handed to you and wipe out all your earnings if you’re not careful. If it was easy then everybody would do it. Consider yourself one of the fortunate ones if you haven’t felt the sting of being on the rong side of a call. Word to the wise, limit or don’t attempt margin calls. Leveraged money can bankrupt your ass.
• misterorange

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  2 years ago

  CJKent, 2Icee, wld4horsecock... If you guys are reading this and want some easy money, the strategy you should follow is "writing naked calls". You just collect money, and the other party loses every time. Trust me, it's safer than CD's and pays a lot better. You'll clean up!
  
  PS: This is for informational purposes only and should not be considered investment advice.
• Uprightcitizen

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  2 years ago

  ^^^ This
  
  Don't worry about that potential infinite loss rumor.
  
  Oh btw if you really want to gamble buy some puts or calls on Gazprom from stuck hedge funds.
• Mate27

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  2 years ago

  Calls, naked or covered should be mad money for you to play with like you would with gambling. Congrats when you hit it! (That’s what she said)
• sinclair

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  2 years ago

  It is not terribly difficult, but I think most people are not very educated when it comes to finances or investing. Something like 75% of Americans live paycheck to paycheck. The average 65 year old's 401(k) is under $300k. When I have talked about options with people, they have no clue what calls and puts are or how to trade them. The is a knowledge moat. I don't win all of the time. I have taken losses, but my gains more than exceed my losses. I would say I have about a seventy percent success rate. My keys are keeping my eyes and ears open to what is happening in the world/economy, paying attention to unusual option activity, making plays in the money or close to in the money, and I generally do longer time horizons like three to six months, so I don't get banged by time decay. I love covered calls because those are like an extra dividend. Most of the stock I hold has calls sold on it.
• sinclair

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  2 years ago

  *There is a knowledge moat.
• shailynn

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  2 years ago

  If only Juice was here for this thread…
  
  TUSCL needs more Sinclair.
  
  I’ve never dug into this - I probably should with the amount of time I blow on sportsbetting for fun… may be time better spent.
• rickdugan

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  2 years ago

  For retail investors buying options is like going into the casino and putting it on black. Except the house odds are slightly worse because the people on the other side of these trades are usually professional money managers with significant information and analytical advantages. They sit there all day doing this for a living and have vast resources at their disposal. Sure you may have one pop in your favor here and there, but on the whole the market wouldn't exist if the options writers (sellers) couldn't make a net profit.
  
  Writing (selling) options contracts is hugely risky because, on each contract, the seller has a risk of losses that can be many times the amount of premiums they receive. This is why the people on the writing (selling) side are almost always pros, with the exception of covered calls.
  
  No thanks. I enjoy the power of compounding growth over time and I'm young enough to weather short-term dips. I once had a portfolio of individual securities, but long ago switched to low cost index funds. Unless you can spend your day learning the companies and industries in which you invest you'll always be at a disadvantage to the full time pros. Besides, over time the S&P 500 has outperformed something like 70% of them anyway. I've made a few individual bets over the years when the time was right (BOA and RICK in 08-09, DAL and AAL in Spring 2020), but wasn't greedy and cashed out of each when I was up 40-50% in order to get that money back to work in the broader market.
• Mate27

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  2 years ago

  ^^ always listen to a Rick, even if he’s Ricksplaining a topic besides fucking sexy female hairless apes. Anyway, the facts are out there being the majority of people flopwhen diving into timing markets and this includes writing calls. Are there winners like Sinclair? Sure, just like there are winners in Vegas, but the odds over time are stacked against you when compared to just holding onto a security for the life of you needing those proceeds. If I have time to kiss away, I’ll write a call or two, but after the novelty wears off I find something else to play with. Titties!!
• rickdugan

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  2 years ago

  Mate, tell us you didn't just use a derivative of "mansplaining" to characterize what I was saying. It may be time to reach down for a genital check dude. 😆
• mark94

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  2 years ago

  Investing in a diverse bucket of large companies, typically through an index, is as close to a guarantee of doubling your money every 7-10 years as you can get. Any investment plan that claims to consistently provide better results is a scam.
• Mate27

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  2 years ago

  Dugan, did you roar after your feeble attempt to emasculate me. Purely cognitive dissonance is a pattern of behavior you can’t shake. Awareness is most of the battle, but you do you! Carry on wayward son.
• Mate27

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  2 years ago

  “Dugan did you roar”?
  
  More like meowed….
• twentyfive

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  2 years ago

  Bulls make money, Bears make money, but pigs still get slaughtered.
• rickdugan

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  2 years ago

  ^ You emasculated yourself Mate. No help needed from me. 😉
  
  You also need to get a better handle on the definition of "cognitive dissonance" dude. Has anything whatsoever in any post I've ever put on here make it seem remotely like I'm ashamed or conflicted about anything I do? I am what I am dude, for good or bad. Don't double down on your self-emasculation by adding "mentally challenged goofball trying to force a concept into a post to make himself seem more evolved" to the mix (really need to find a way to shorten that lol). 😆
• Call.Me.Ishmael

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  2 years ago

  TUSCL ... where every thread can be overtaken by a personality conflict.
• Mate27

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  2 years ago

  Hubris isn’t as funny online as it is in person, but I guess you need to wear a 3 piece suit to make you feel better about yourself. Rotflmfao!!
• DenimChicken

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  2 years ago

  A seventy percent success/profit rate would almost imply that you have no reason to be posting and should be reinvesting and amassing tremoundous profits. Easy to call bullshit.
  
  Equity market making with retail customers is a huge thing - but the profits for a market maker are juiciest from Options in the past few years - because of the wild retail Options gambling.
  
  Stay out of Options trading unless you are really digging into the DD or if it's being used as part of a hedge....but I doubt most people here are doing this.
  
  It also has been easy for a lot of people to convince themselves they are god tier investors back when money was free. The next few years will be fun to watch.