I agree with you 100%. It's one of the great things about modern Online Trading. Everyone can find a way, or ways, which suit their own personal Trading Psychology. BTW - As you may know, Trading used to be much more limited and expensive! One was forced to be a long term "Buy and Hold" Investor, just because of the exorbitant commissions involved. Not so now.
Quckless: Thanks for taking the time to explain! Like I said, I have nothing against The Greeks, and if any of them can help and don't add unnecessary complications I'll gladly make use of them. Will study what you wrote and try to apply it. Thanks again. cactiman
I've been a professional in the biz for 35 years. And yes I too have studied the BSM and greeks in the hope of finding some value...something that provides real value in my trading decisions. I've wrote detailed VBA to analyze the model over an extended time, and posted the results here. As a supervisor of options trading at many firms I've had the chance to observe thousands of other options traders. Of all the option traders I have know, the ones who continue to attempt to find some formula...some new calculation, some software that tells them when to jump...and then jump, are the ones who continually get wacked. It's not a question of ignoring the value and utility of the Greeks, it's more of a failure of the Greeks to show any real value. You disagree? Prove me wrong.... with c-r-e-d-i-b-l-e and i-n-t-e-l-l-i-g-e-n-t real world, real time examples. I've asked for this before and I'm sure I'll get the same result.....zip.
Actually, you're totally right. It's good to have people like you in the market - you put bread on my table. Keep up the good work. PS. Really, you saw thousands of options traders?
The fact that you don't understand Greeks doesn't make them useless. But, please, do continue to have the courage of your convictions. I am with sle on this. The more people like you out there, the more money for people like me.
I trade options as a replacement for the underlying when I intend on holding a position overnight. I usually only buy calls or puts by themselves. The price of the underlying relative to the strike, and the amount of time to expiration is all I really look at. I typically do not even look at the greeks, but this may just be a consequence of understanding them so well that I do not need to look at them anymore. It is hard to judge whether I could have gotten away with never learning the greeks in the first place though. IV/HV receives far more of my attention.
Can you drive a car without knowing how the automatic transmission works? Yes Can you trade options without knowing all the details about the Greeks? Yes
Ofcourse you can. Can you play baseball in the street Yes Can you play with the pros if you know how to hit a ball?? A little bit of knowledge is a dangerous thing.