Better than selling IMO bit still so so difficult to make work long term. Not only do you need direction in your favor...but you also have to predict volatility...fuck man. Oh yea, And clocks tickin dude...one more element of difficulty. So much respect for options traders making money as it just seems like the most difficult trading to learn and execute.
Many of you should ask yourselves why are you selling an option or a spread,and why on over the other... I haven't heard one person mention gamma, delta, theta,nor anyone mention how many spreads one would have to sell for an equivalent theta position as a naked option.. There's no free lunch,and what all you guys are glossing over is delta hedging and hopefully capturing theoretical edge
My my, THREE replies to two of my posts. This is a record!! I need to take a screenshot. LOL You had hope for me?? I didn't know that... LOL Yes you are my guru. As I said, And hence I suggest trading with option spreads instead of selling naked options. If you can lose more from shorting straddles which is really TWO sales of naked options than iron condors, then yes shorting straddles is an inferior strategy than iron condors. Glad you mentioned that not all option spreads are created equal. Yes Why not?? It shouldn't be the ONLY job or goal of a trader but maximizing win rate can still be nice as long as it contributes positively to your bottom line. As I said, No programs like Orats are designed for you to maximize your win rate AND the profit that you make at each win. Ok now I want a bigger cut. I seem to recall somebody who used to say to me: I am now following your advice to keep things simple and this is what I get now. There is no way to please my guru...
Well last time when I mentioned gamma, we all know what happened. LOL But seriously, how do we calculate how many spreads one would have to sell for an equivalent theta position as a naked option? Can you illustrate with an example? I am really curious to know. And what kind of spreads are we comparing to which naked options? Because there are many many many kinds of option spreads combinations. Exactly!! That's why one needs to be extremely cautious when selling naked options. theoretical edge? How is it theoretical? How would you confirm it in a practical sense? Great time to illustrate with ORATS. Still waiting for my cut.
Hi Andy, if I can give you an advice start to trade option using spread. Ie. If you are bullish on S&P500, you short a put at 3800 strike make sure you buy a put at 3700 or 3600. You keep under control your max loss. If you want some more insight let me know.
You only make money when you are right and the whole world is wrong. That doesn't happen too often, especially for us amateurs.
@zghorner, A few humble suggestions from this retail: 1. Get off the beaten path. 2. Read Taleb, Fooled By Randomness. 3. Hunt for special situations. Maybe you can pick up some bread crumbs the pros discarded.