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apopilot

Registered: Nov 2009
Posts: 2

11-02-09 09:51 PM

Over the past 4 years I have been involved in options trading. A friend of mine told me about this site and it looks like a great location to share ideas. My training included premium selling techniques. Are there other types of options trading like inventory building using volatility? Do most options traders sell premium?

Thanks

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riskfreetrading

Registered: Jan 2008
Posts: 3886

11-02-09 10:36 PM

#sellers = #buyers

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lindq

Registered: Mar 2002
Posts: 1948

11-02-09 11:11 PM

Quote from riskfreetrading:

#sellers = #buyers

#sellers / (VIX * TC) = BA

Where TC=Trading Capital and BA=Busted Account

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nazzdack

Registered: Jul 2004
Posts: 5009

11-02-09 11:59 PM

Quote from riskfreetrading:
#sellers = #buyers

1) The number of contracts bought equals the number of contracts sold.
2) The quantity of traders/investors would hardly ever be equal on the buy-side and sell-side.

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dagnyt

Registered: Nov 2003
Posts: 1773

11-03-09 12:22 AM

Quote from apopilot:

Over the past 4 years I have been involved in options trading. A friend of mine told me about this site and it looks like a great location to share ideas. My training included premium selling techniques. Are there other types of options trading like inventory building using volatility? Do most options traders sell premium?

Thanks

the answer to your question is that most experienced individual investors sell options.

Newbies buy options because they don't understand what they are doing.

Don't misunderstand. selling premium does not mean selling naked options.

By the way, the jokers who believe the number of buyers = the number of sellers don't understand your question. MOST individuals sell. Much of the buying is done by market makers and professionals who use the options to hedge their portfolios.

Mark

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TraderZones

Registered: Mar 2008
Posts: 5093

11-03-09 12:28 AM

Quote from dagnyt:

the answer to your question is that most experienced individual investors sell options.

Newbies buy options because they don't understand what they are doing.

An uninformed response. Selling options has little edge over buying. And requires a lot of capital to hold for any length of time.

Lots of EXPERIENCED people buy options to hedge a position, or as part of a strategy, etc. Calling them newbies is bizarre for someone like you, claiming a lot of experience.

Personally, I don't buy or sell options.

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