But I do agree that options are not simple, and one should do a lot of paper trading, and only invest small amounts of money, before assuming they know what they are doing. I think when you get into multileg options, you really need a lot of knowledge. That's why I never attempted a simple vertical spread, which is not even considered complicated.
I would be happy with the return of the stock, plus 1.5% a year. I don't expect to get rich selling covered calls and cash secured puts.
Why are you such a negative Nancy? The man asked for help. If he doesn't have the aptitude for trading, he will learn. It's wrong to put someone down because you know more than they do. I bet even you had to start somewhere or you one of the math genesis that you so fondly mention. One person's opinion. Geez
Why the smartest math people in the world? I looked at the black sholes pricing model, which I am sure a computer will compute for you. It's sophomore level math. Clearly, you can't be innumerate to understand it, but I would think people in the top 25% in math ability would not have too many problems with it assuming they were a stem major and had the classes. There may be other skills that make option trading hard, but I don't think math is one of them. My gut sense is that for everyone who makes money, someone else loses money, and then you lose money on spreads, commissions, taxes, etc., and that may be the real problem.
Reading Rich dad poor dad when I was younger is a big part of why I was able to retire in my 30s. I would ignore his advice on options...and I would definitely ignore his example on purchasing properties. He loves debt...borrows a ton of money to purchase properties. This can work and I get that sometimes debt is needed, but he has also gone bankrupt several times... #1 takeaway from RDPD: Rich people get money and spend it on things that put money into their pockets each month (assets). Poor people get money and spend it on things that take money out of their pockets each month (liabilities).
BSM modeled the ideal world. As you said a high schooler can do the math. The real world is not normally distributed and it is where all the PhD physicists and mathematicians are trying to model. The good news: You don't need a PhD in physics to make money trading options and you can make money writing or buying single legs or combinations..., a gambler's paradise.
the math is in the forecasting of vol and perhaps in the understanding of the partial derivatives that make up the taylor expansion of the generalized black scholes model. but it’s nothing a mechanical engineer or physics majors couldn’t figure out. the application of it is the harder part.
Yes, that is what I meant. I learned all the math for that, in my sophomore year of getting my BSEE degree. I think only a very gifted high school student could do it. I certainly would have been clueless if I saw that when in high school.