Options are kind of a bitch to trade unless intraday then a lot of the complexity is moot. And not cheap, fees and navigating horrific spreads But the leverage is nice. Im probably too stupid to trade an always depreciating asset successfully tbh
Options are fascinating-it's like understanding how your car works. Most people can drive but they have no idea about the mechanics. I'm cheap and hate to pay for expertise I can attain myself! Aim for 2% a month, those guys who make billions -that's a lot of luck and cojones.
Fortunately - unfortunately - I dunno which is best - I was indoctrinated early in my trading adventure not to touch Options as they were a losing strategy. What wasn't mentioned so is Gold trading, but I digress. My experience, my plate is too full learning how to navigate the sea of Stock trading. Stock trading, learning how to know direction is a full time job in itself. I'm too old now to educate myself on Options, besides, after decades of trading, I'm still learning how the markets operate, so I still can't afford the time.
Well, those of us who persevere for a couple of years and didn't give up, eventually figured it out. I changed strategy and started hunting for black swans (special situation trades), simply using options as a tool.
Retail options traders normally get crushed. There are many reasons for this but the reoccurring frictional costs are an underrated one, and the speedy and fierce competitions from algos is another.
That's great. We don't all need to use them the same way, nor should we. There wouldn't be a market if we all wanted to do the same thing at the same time. We all need to manage our own risk.
Ok I have been perusing the book and it seems like the tos option analyzer tool will accomplish most of what is being talked about. For EOD profits and losses you can use a simple spreadsheet. Option Volatility & Pricing on page #504 he is speaking about selling strangles/selling kurtosis. The issue would be that you would have a very negative vega so to neutralize this if you wanted to focus solely on kurtosis you would open ATM straddles with the same delta. So basically if stock abc is trading @ 195 the strangle would be: Sell 1 call option @ 198 Sell 1 put option @ 192 Then open the straddle: Buy 1 call option @ 195 Buy 1 put option @ 195 Isn't this is the same as just opening 2 vertical spreads? Buy 1 call option @ 195 Sell 1 call option @ 198 Buy 1 put option @ 195 Sell 1 put option @ 192
Yup. The same as a Condor. It doesn't matter what structure you open with (butterfly, diagonal, vertical, calendar), or if you makeup your own customized structure. Just assume it's at parity. It only matters how you manage it against market fluctuation.