Hello EliteTraders! I haven't really researched/studied on options until recently even though I started learning the basics in 2006. I happened to noticed on Reddit there are three options "camps": buyers, sellers and mixture of both. I also noticed that options sellers seem a larger audience. There are several sub reddits for the options sellers like thetagang, Optionswheel, etc. However, I'm not aware of a sub for options buyers. There seems plenty of options selling books and mixture of both (buying and selling) however, I'm not aware of a good book that only focus on options buying. I'm curious on this forum, which do you considered yourself as a buyer, seller or both?
Not aware of the biggest subreddit (WallStreetBet) ? Both Selling and Buying works. Under the right conditions. & … For every buyer, there is a seller ! Books that cover only one side are biased.
@Sekiyo: Thanks for your insights! I've heard of WSB but didn't realize it's an options sub. It's good to know what information is being biased on. I would try only "listen" to each sides and yet remain open to buying and selling under right conditions. I guess good books that cover both sides are the usual recommended by many: McMillan, Natenberg, Hull, Cottle, Sinclair, etc.
Most strategies involve a combination of both. Those subs that run strategies like the wheel are selling against the underlying, but the others taking the bet also want to protect themselves, so they run the opposite strategy. Buying wins less often, but when it does, the profit is larger. On the opposite side, sellers win more often, but a loss can wipe out months of running the strategy. So everything is balanced at the end, regardless of what percentages might show.
@traider Why not strangle? Unlimited reward both direction moves while limited risk for neutral move?
r/WSB has slowly become a long options sub mainly due to the rise of the 0DTE options phenomenon especially betting on SPX directionality. WSB is all about YOLO bets so selling options is waste of their time. I mean on a 0DTE SPY call/put you can make 10-100X if the move is significant enough. What is call writing going to get you? 100% max. I started reading WSB around 2015 and it slowly went from buying low priced stocks like RAD, BB, etc. to buying everything hyper growth tech like CVNA ROKU FAANGs. Then during the pandemic they splintered into many groups due to the emphasis on the meme trades like GME & AMC. Then in 2022 they became suicidal since every thing tech collapsed and they focused on Powell machine gun memes. Since the massive rise in 0DTE options it has become a heavily weighted options sub. r/WSB is first and foremost a YOLO sub so options makes sense. Its scary to believe if the CME rolls out single stock futures and they are liquid these people will start betting using futures with its 20+:1 leverage.
I've been playing with whispertrades backtester recently. They produce nice reports for very basic option strategies. Nothing too fancy, just the usuals. There is a way to avoid the YOLO degenerates if you want to write puts, just exit on 1DTE and you will avoid the noise. https://whispertrades.com/backtests/HL3SCLXRCY/view