Mayo 367, Excellent post, couldn't agree more. As you said, the so called "negative" posts indicate that the individual concerned doesn't have a good grasp of what option trading (or any trading for that matter) is about. daddy's boy
I'm glad this post is interesting to people, and I and many others are here to learn. I can also agree philosophicaly with some of the philosphical criticism raised. NTL, I have made a number of specific points in my initial and subsequent postings. Nobody seems to contest them, and nobody seems to offer any specific technical points of their own, or share much of their own experience. It seems like a bunch of hand waving. I still can't help but wonder, where's the beef, in this thread? I admit that I come off a bit negative, but at least I bring some beef to the sandwich. Since all the members of the optimist club above have such a commanding "grasp of what trading is about" would it be very hard for you to share your pearls of wisdom with us? Or address the technical issues? All I've really heard so far is "stay positive". What part of "read Baird's Option Market Making and learn about how market makers operate" is negative? Do you challenge the point that they get inside fills all day long and we never do? Do you disagree that it is a zero-sum game? In your positive world, do you think the market maker is your friend? Or, someone please tell us you've been making six-figures a year for 10 years trading options at retail. That would give us some real optimism. Tell us if you balance your greeks. Tell me you think options liquidity is just peachy. Simply saying, oh, ignore that negative person, he's trying to confuse us with facts, doesn't cut any ice. Yes, I'll continue to trade options, but only when I have a clear edge, and probably merely by going long a put or a call on a stock I admit that I'm speculating on.
Some of your points are well taken, philosophically, but my specific point is that options market makers get inside fills all day long, get them quickly, listen in on the futures pit (according to Baird) and balance their greeks. I'm willing to ignore the fact that they're all Masons, but all the optimism in the world isn't going to get very far unless we confont those specific advantages of theirs. And folks, is it really necessary to quote the entire text of the preceding post when you reply to it?
luh , did your ever considered just stop trading options ? Its not about MM , spread , greeks or other people's results. Its about your state of mind . Reread your last two post and you may agree with me.
based on personal experience i seriously feel trend following strategy,CAN be quite succesfull, and the performance data from http://www.mytradingsystem.net supports my claims, but their implementation require great trading skills
I completely agree! Several people on this thread have demonstrated a severe lack of understanding and experience regarding options. As hard as I've tried I cannot firgure out the statistical disadvantage that many people speak of. Most arguements have left out important details. Anyway, IMO the "big boys" only significant advantage over the reatil trader is in comissions. They aren't necessarily better traders. They are simply better/more experienced than the losing retail traders. Thus, if you're a losing retail trader, try to develope more skill and gain more experience. Don't lean on some weak excuse as to how the game is rigged against you.
Fundamentally, if the underlying moves in the right direction or to the right amount, and vega and theta don't fight you, you're in the black. Nothing to it. But there are still a few rules to follow, tricks of the trade from experience, to get around losing some extra to the market makers. I think thats the general point here. The game can definitely seem rigged if you're foolish enough to make market orders at the wrong times (especially when buying or selling cheap otm options).
u tell them , CL... I have a feeling that this thread is about to turn to another "Zero Sum game " bs , lol
Actually I haven't traded options for 2 months now, except for that INTC call I picked up a couple days ago. I wish people wouldn't blow this out of proportion; when I talk about some "axis-of-evil" we're trading against, I mean specifically the market makers and the banks. I don't know why people have to ridicule this, or me, they're qute real, whether or not they're all Masons. One specific point is that they have better spreads, but let's let that go. The other issue though is that they have better execution, and therefore can use this to balance their greeks. Everyone here is so proud of their understanding of greeks. But nobody admits that they don't balance them out daily or weekly. Why not? Because retail traders get poorer execution and this helps make it too difficult and expensive. Or maybe you don't do it because you always pick underlyings that move in your direction. If so, my hats off to you. If not, admit to us that you are speculating, pure and simple, and please post back when you blow up. Hear me now, believe me later. Or comfort yourselves and stay positive by ridiculing me and ignoring the substance of my questions and arguments.