I disagree, it doesn't matter how many time you are right or wrong, the only thing that matters is the bottom-line. Its a given that a seller will win much more often but small amounts everytime but the buyer on the other hand... I still think there are no inherent hedge, only a poorly evaluated premium can give hedge but its not inherent.
That is no argument. Obviously if a trade occurs, the buyer and the seller have different view on market direction. Since neither of them is reading into the future, it is only an estimation. That does not give either of them an inherent hedge. Now you are right, if one has a time machine then yes he has an hedge to begin with
Hahaha! Your only arguement relies on not knowing the future! Keep on buying you fool. Please, don't encompass everyone within your own train of thought. You will never be the best trader, and you will never be the richest man on earth. Deal with it. Dackster.
There are basically 6 variables in the price of an option. 5 of the six can move will always be changing and they can move such that the buyer or writer of an option would profit. Direction of the underlying is just one of the variables and its not always the one you have to trade. But again, none of that has anything to do with inherent edge in either side.
On page 109 of his book, Gallacher has produced a table of values mathematically derived from 15 commodities (financial, resources and food) individually. "Average premiums received and average payouts made during calender yesar 1996 have been calculated for straddle positions on 15 actively traded commodities - from a total of 3781 independent observations. To make the results directly comparable and to accord the same weighting to each commodity in the overall result, the ratio of average payout to average premium has benn calculated for each commodity, with a ratio of 1.0 indicating the break-even condition. Surprisingly, the overall average of this ratio turns out to be almost exactly 1.0 (a statistical flute), indicating a fairly priced overall market ." "This rather surprisingl conclusion can be sumarrised as folllows: The conventional wisdom that indiscriminate option buying is a losing play is incorrect. At the most general level, the option market is remarkably efficient, neither favoring the buyer nor the writer, and equalising their expectations at zero.
Dackster what makes you believe everyone else here is a buyer of options? I never mentioned my trading style, I just pointed out the FACT that there is no inherent edge in being a buyer or a seller. No one here is going to be the richest man in the world nor would the richest man in the world get that way via trading options.
I do not find that surprising, like I said earlier, there is always a price that can be reached between intelligent buyers and sellers that will make any hedge impossible. Only a poor pricing will lead to a statistical hedge but again it is not inherent...
'His' tables! There's always some non-trading f*cker with a 'table'. Gallacher is obviously the richest man on this earth with his tables. Whatever! Dackster.