To his credit, he is smart enough to trade a size that won’t shut him down when wrong.. He’s really an investor , and doubles down when wrong..
That's it. No need to use margin / leverage when you don't look to 10x. But someone going 200% or more into an underlying is definitely going to use stops. However the cash trader might hit 10x before the margined one.
Exactly.... If you are a directional trader shooting for outsized returns,you need to knock the cover off the ball when you are right....And to accomplish that,you better be fairly quick on the trigger when wrong. He takes the exact opposite..Most of the time hes short 1-5 puts looking to get in at a cheaper price.When wrong,he sells another put or 2 to lover his cost basis.If he was truly a directional trader, bare minimum he would be using the puts to finance long calls or verts.. He takes a value investor approach,but for some reason speaks EW
Stops are kind of dumb and short sighted. That's like a boxer saying to himself...if I get hit 9 times... I'm walking out of this ring and arena. Cutting my losses short. The collective picture landscape horizon, ability to reasonably win, should have been established much earlier. Instead of a gambley happy go lucky approach Continually understand and refine and question things, to reduce dumb bloaty random outcomes
That’s like saying short vol/gamma shouldn’t be hedged Maybe so, but short gamma in meaningful size and let me know how it works out
I can understand that Stops with Indexes maybe less necessary, but Stops on individual Stocks which can go to almost Zero quickly is necessary imo.
10 stock portfolio, 9 stocks unchanged, 1 goes to zero, you are down 10 percent on a portfolio which is basically exactly what you said