Options as a lottery ticket

Discussion in 'Options' started by billb2112, Mar 26, 2010.

  1. This is the best lottery option strategy. To really double your fun, make it a long strangle and hope the market touches both of the options before cashing out.
     
    #11     Mar 27, 2010
  2. zdreg

    zdreg

    it is not a lottery ticket but a black swan strategy.
     
    #12     Mar 27, 2010
  3. Instead of buying lottery tickets monthly (which many people does)
    you can buy OTM options every month (works best with OTM puts, as panic is too strong a psychological reaction).

    You can get your lottery tickets (puts) for free if you buy them with the proceeds of bonds interests, or stock dividends.
     
    #13     Mar 27, 2010
  4. Ha-ha, you're just full of absolute pearls of wisdom like this, aren't you?
     
    #14     Mar 27, 2010
  5. As a broad generic approach, these strategies don't work. There's a whole plethora of research/data to support this conclusion. The most ironic bit of anecdotal evidence is Taleb's own performance during the years he traded (before he became a pundit).

    This is not to say that outstrike options are never mis-priced. Occasionally, they are and money can be made buying the right lottery tix.
     
    #15     Mar 27, 2010
  6. Can you point me to some of that research? I'd really like to give it a read.

    Thanks.
     
    #16     Mar 27, 2010
  7. #17     Mar 27, 2010