Like this gem of a advise. https://www.elitetrader.com/et/threads/amateurs-have-no-chance.331011/page-11#post-4838419 "dozu888 said: fundamental valuation wise, again, imagine if the 10 year yield doubles from 2.5 to 5, bonds will need to collapse by 50%?"
what's the point... you know what I meant and I already explained what I meant... unbelievable.. how about producing something constructive and creative for a change, instead of wasting time on semantics.
Point is you don't know what you are talking about and can not perform simple bond math. What is so constructive and creative about following your mysterious "pro boys"?
well - if you cared to pay attention to the right stuff instead of wasting time on semantics, you'd have read the details I laid out on how to figure out my pro boys plans lol.
It is not semantics when you say bond falls by 50%, instead of around 20%. It might be semantics to you, not anyone followed you and your "Pro boys" advise would have lost ton.
It may work only if you have years of experience, especially when developing a systematic strategy where you’ve tested specific way of trading and see for yourself whether something like this works, or find any other specific way of trading and don’t need to ask such questions. When you do ask such question then you don’t have sufficient experience or a trading method that will work, especially for buying options. It is easier to make money selling options and even then you have to have a hedging strategy and/or some trading experience. And whether buying or selling options you might’ve not survived high volatility years like 2018. If you’re just an investor who wants to mostly buy and hold for more than a week, there is probably nothing worse then buying and holding options/calls. Most people sell options for a reason. As an example, if you buy stocks directly, they will occasionally move 20% up and down and you’ll have problems trying to decide when is good time to sell at profit, or if you’re losing and your account is down 20% you’ll get scared and also may want to sell, or simply won’t sleep worrying about how much more you may lose. But if you hold ITM calls, your option value or whole account may be 40% down or even 70% down or 100% down if the price really drops, even temporarily. There is no way you’ll survive even a 40% drop in option price (vs 20% in underlining stock for example), either psychologically or financially or margin-wise. In my opinion your question doesn’t even have a place here because the only way to understand the implications is to have minimal experience trading options in variety of ways. So either do paper trading or invest less than 1% of your account info “playing” and learning options, or do some testing on ThinkOrSwim demo platform where you can backtest an options strategy based on past data using their “ThinkBack” feature. That feature lets you pick any past date and buy/sell options, then see how it would perform going forward. So try buying any ITM options in January 2018 or Sept-Nov 2018 and see what would happen going forward. You can also test buying or selling options each week, each month, etc (just manually keep changing dates and buying/selling options for each one). In fact, learning the ThinkBack feature may be the best investment you can make right now.
ok can we move on now... something like how to figure out my boys next move lol... and who give a s about bonds anyway, other than using as a yield reference.
You should never think in terms of buying is better than selling and vice versa. Once you have a view of what you think will happen, use the correct option(s) to carry out your view. The caveat is, now you have extrinsic value, which may be over or under priced. You can most definitely be successful buying options but it will take more than just having a directional view
Thanks This is really useful. So if not just taking a directional view what else do you need to consider? Thanks.
You should be able to bring any options symbol, check open interest, check spreads, time and sales and get an idea during any trading day.