Options Action on CNBC

Discussion in 'Options' started by syswizard, Nov 14, 2009.

  1. Anyone watching it want to comment on the same-old, same-old trade recs week after week ? I'm talking about the collar positions they recommend: high margin requirements, low profit, but low risk.
    I don't quite "see the point".
    Latest one was ERTS - sell a low strike put to fund a high strike call.
  2. erol


    trades are too risky for me, but i'm still a noob.

    I guess they don't mind being long below the puts' strike

  3. whats so bad about that?
  4. It's too slow to make a decent return, no ?
  5. Jesus


    Jeez man. You have a lot to learn.

    Sometimes slower and safer is better. Like you said, it has a smaller reward but it RISKS LESS, and the traders on option action think their trades have a good probability of being profitable. You don't need to try to shoot for the moon on every trade.

    But then again,
    Thats why they are on TV and you are on ET.
  6. You got me there....but let's go back to that disasterous trade by Stacy Gilbert on the long bet on Bidu....right before earnings.
    So now who's got a lot to learn ?
    Answer: even the best pros.
  7. Jesus


    I agree, everyone has a lot to learn. But you much more than the people on options action. So what if she made one bad trade. We all do. But she likely limited her losses and moved on.
  8. I didn't see the specific show, but from other episodes I've seen I suspect she knew earnings were coming up, her losses were limited, and she made a bet on which way things would fall out.

    If so, that's not a disastrous trade, just one (of many if you trade) that didn't work.

    BTW: the cynic in me suspects Susquehanna took a chunk of the other side.

    I actually think the show has something to offer to the option newbie. I don't recall anyone on there advocating buying a lot of far-OTM calls just because they're cheap.

    As far as CNBC programming, that's about the only show I ever watch (from time to time) and one of the few regular programs that offers anything of value, and not just boo-rah entertainment.
  9. drcha


    I don't mean this in an insulting way at all, and I hope you don't take it as such.

    Really? Would you actually send a newbie to watch this show to learn how to trade options? Seems kind of like sending someone to the South Pole with no clothes.

    I admit I have not watched the show many times or that carefully, but I have seen little if any discussion of volatility, skew, Greeks, adjustments, when to close trades, money management, etc. A newbie would be much better off reading Options for Rookies or even digging into the first few chapters of McMillan.

    It may be best not to give newbies here the idea that the show is a legitimate way to learn options. There already seem to be people blowing up on this site on a weekly basis.
  10. Agreed. No mention of bet-sizing. No mention of stop-losses. (although we know in the options world, you can get filled WAY OUTSIDE your original stop...thus making it somewhat worthless)
    Example: in Stacey's failed BIDU long call options bet....there was no way any stop loss order would have helped her. The loss was almost "instantaneous".
    #10     Nov 17, 2009