OMG I can't believe this fallacy still exists in trading!

Discussion in 'Trading' started by wxytrader, Oct 14, 2023.

  1. vanzandt

    vanzandt

    2% yes. 50% no.
    I already told you that, I gave you TSLA as an example.

    And before you even go there with "it's the same concept"... NO it's not. 2% is not 50%.
    If it's the same concept... then it would apply to a 90% drop.
    ~case closed.
     
    #121     Oct 15, 2023
  2. vanzandt

    vanzandt

    Those option writers don't have a clue. They need to read his article and adjust accordingly.
     
    #122     Oct 15, 2023
  3. newwurldmn

    newwurldmn

    Market makers are mispricing options by a factor of 10 or 20. Skew is way to cheap.
     
    #123     Oct 15, 2023
  4. vanzandt

    vanzandt

    This entire thread may turn out to be a goldmine for @destriero as we have uncovered a huge arb opportunity. I want in. :mad:
     
    #124     Oct 15, 2023
  5. Exactly..they just don't seem able to grasp the concept. You are better at giving examples than I am so perhaps I should let you carry the torch from here. :)
     
    #125     Oct 15, 2023
  6. vanzandt

    vanzandt

    If NVDA drops 50% tomorrow... I'm going all in on the November $460 calls.
     
    #126     Oct 15, 2023
    taowave likes this.
  7. Overnight

    Overnight

    You're suffering from the non-sequitur fallacy, which is you, as I pointed out on page 1, incorrectly concluding that the paragraph you used to start this thread was saying anything about the "difficulty" of a stock recovering 100% after a 50% drop.

    It did not.

    What the paragraph is pointing out is that some people seem to blindly sell their stocks after a large drop at an incorrect price point, thinking they have recovered their losses. It specifically states that some people whose stock drops 20% one week and then see it go up 20% the next week might think they will be able to sell at break even at that point.

    The paragraph/article says NOTHING about probabilities. This whole thread is YOUR folly, in that you are trying to use the wrong end to justify your mean.

    There is absolutely nothing wrong with what Investopedia wrote there. The problem is YOU.
     
    #127     Oct 15, 2023
    vanzandt and rb7 like this.
  8. SunTrader

    SunTrader

    Yes, because it is against the ttttttrend.

    YOU are thinking in terms of $50 up, $50 down, what's the difference. Of course they are equal.

    Where they are not equal is with context.

    Anyway like I've said and Overnight and others this has nothing to do with your OP.
     
    #128     Oct 15, 2023
  9. You are not even in the relm of the conversation.
     
    #129     Oct 15, 2023
  10. Sort of correct..as far as not relying on erroneous math to justify your opinion.
     
    #130     Oct 15, 2023