Do Option Sellers Have a Trading Edge?

Discussion in 'Options' started by xelite777, May 9, 2014.

  1. #171     May 17, 2014
  2. TskTsk

    TskTsk

    I've read about the The Wörgl Experiment before, and all it does is prove the gold bugs dead wrong.

    I mean, you have towns that issued their own currency with a negative interest rate attached to it, which meant it circulated extremely fast because nobody wanted to hold it long-term unlike the official currency. As a result, it created 12 to 14 times more employment than the regular Austrian currency. See http://www.lietaer.com/2010/03/the-worgl-experiment/

    In fact all currencies today function like in this experiment. That is what the equilibrum models between inflation and unemployment are all about. Milton Friedman made a convincing argument in that regard, that there is indeed a correlation between unemployment and inflation and it's proven by the above experiments.

    That rises another interesting point; during the gold era, how much of the money supply do you think was on the US government? It was in fact less than 15%. Nearly all of it was on unofficial currencies that were designed just like todays fiat.

    Just another nail in the coffin for the gold theories. They are dead, kaput and burried and anyone with a hint of economic knowledge would understand why. When even the unfettered free market tends towards fractionality, you know your theories are fucking done for.
     
    #172     May 17, 2014

  3. If they were tinned tomatoes, yes, probably.
     
    #173     May 17, 2014
  4. Inflation is theft, period.

    Prevent banks from creating money out of thin air (via the fractional reserve system, which is nothing more than the biggest Ponzi scheme on earth) and restore the Gold standard and you will have virtually zero inflation forever.
     
    #174     May 17, 2014
  5. TskTsk

    TskTsk

    Read my post in it's entirety again. As explained, even the free market prefers fractional banking.

    Where is your God now?
     
    #175     May 17, 2014
  6. Oh boy, don't get me started with the FED (Federal Reserve system) again.
     
    #176     May 17, 2014
  7. Handle123

    Handle123

    I have just spent nine months designing an option system. I started with very little experience dealing with them as I generally only used options strictly as hedging instruments to cover Commodity Futures positions. And I am still learning each day cause options by far has been most difficult to fully to appreciate. Value is truly what market will bare and there are times when pricing is absurd. But after testing few hundred ideas, my knowledge is this, as market falling-Puts increase in value and wait for a signal, that's where I start selling Long Term Puts, but depending on signal, I will be buying weekly OTM Calls. Several "tests" were very profitable of just selling options based on the underlying, so I will agree overall, selling has the best percentages of profiting, BUT, if one doesn't have a defined Trading Plan, one's stats can be opposite. I think the same goes for buying options, several methods showed very consistent gains, but I do know most who buy options, lose. Buying will always produce highest returns but like it should be offer greatest possibility of losing.

    I think the bottom line in any trading endeavor is the experienced do the best over time and the inexperienced lose.
     
    #177     May 17, 2014
  8. In essence, buying deep out-of-the-money call or put options is like playing the lottery, it's exciting of course but the odds are against you.
     
    #178     May 17, 2014
  9. REAL money has to be a store of value and maintain its purchasing power over a LONG period of time.

    History shows that only gold (and silver) have been able to accomplish that goal for centuries.
     
    #179     May 17, 2014
  10. Full reserve banking is incompatible with free mkt capitalism. This has been demonstrated empirically, but it also is a matter of basic common sense. Trying to prevent fractional reserve banking through regulation is like trying to outlaw fornication. And the most ironic thing is that, even if you were to ban fractional reserve banking and adopt the gold standard, you still could easily have inflation. There's ample precedent for that as well.

    The Gold standard, while it has some advantages, is just not viable in the modern competitive global economy. If the US ever decided to adopt it, they should save everyone time and declare themselves a Chinese protectorate to get it over and done with.
     
    #180     May 17, 2014
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