stocks vs options

Discussion in 'Wall St. News' started by dealmaker, May 13, 2020.

  1. dealmaker

    dealmaker

    ""
     
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  2. what do you mean convexity? How would it benefit trader?
     
  3. xandman

    xandman

    Imagine a return graph where X is the stock price and Y is the profits. Trading the outrights will have a graph that is a linear function. Long options (long volatility) strategies will have a graph that is an exponential function.

    We see that slope of that linear function is a constant multiple.

    However, the variable rate of change of that exponential function shows convexity.
     
    Last edited: May 13, 2020
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  4. kmiklas

    kmiklas

    I don't like option premiums, and don't like how they expire.
     
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  5. guru

    guru


    Fluctuations in options pricing, not always directly related (or not linearly related) to the stock price.
     
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  6. Amun Ra

    Amun Ra

    I like making a 1000% return in a week. I don't like making a 10% return in a year.

    but also...

    I don't like losing 100% in a week. I do like having all my money at the end of the year.
     
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  7. Stocks are boring. Options are amazing.
     
  8. ironchef

    ironchef

    The secret is out. :wtf:
     
  9. So wayne is complaining ?
     
  10. xandman

    xandman

    He is extolling the use of options.
     
    #10     May 13, 2020