Best strategy for small moves ?

Riffraffpatrol · Apr 13, 2012

Quote from spindr0:

How can I say that $ .25 is not much of a gain??? I can say that because this is the internet where anyone can say anything that they want to.

But in reality, I didn't say that.

If you followed the context of this thread, you'd recall that the OP indicated that he has a simple screen where a typical trade yields 1 - 3% in 1 - 5 days. I provided some examples for one of his stocks (TEX) using a maximum 3% UL gain. Now if you are one of those people who is always right and gets that maximum 25 cts option gain on every trade then congrats. But I think that most of us have a fair share of BE and losing trades and therefore, 25 cts isn't a heckuva a lot of return from a 70 cts. move in the UL nor a great max return from a trading system (the OP's screen).

I've had stellar equity trading years where I made less than half that gain (25 cts) per 100 shares. Had I been using options, I would have made far, far less, if much, at all. As I posted, earlier in this chain, if his screen can reliably predict 2-3% moves in 1-5 days on low priced stocks, trade the stock. B/A slippage and commissions on equities are lower and you don't have to fight that pesky delta or IV fluctuation. You are free to feel and do otherwise. After all, this is the internet!
More...

There is no pesky delta and significant IV fluctuation when u work with deep itm...the capital outlay is far less....reducing exponentially the impact of a rare yet nonetheless very real black swan possibility, and the % returms are far far greater... Not sure your reasoning has legs.

Log in or Sign up

Best strategy for small moves ?

Riffraffpatrol