I totally agree with ALL of the above post. However, you have seriously digressed from your initial assertion.... namely that a negative expectancy can be turned into a positive expectancy. You had the fascination of EVERYONE here. No wonder it's such a long thread. But let's leave it there shall we ? No winner, no loser, just traders learning / sharing / debating. Which is the whole purpose of any BB. Thanks Mav. Can you publish your last positive expectancy trade here ?
I thought my post was abundantly-clear with the bold-text. There is often a difference between belief/faith and reality.
I think we got lost in semantics. There are two separate ideas I was trying to get across. One which was that the individual parts all have negative expectancy. But the sum of the parts can have a positive expectancy. Like Riskarb said, we would traders continue to adjust a position if they believe it wasn't allowing the position to move closer to a positive expectancy. Nobody wants to throw good money after bad. And the reason this thread is so long is not because of this little detour, but rather many on ET thought there was some implicit edge in just selling premium. But let's not go back there.
Mav, positive, zero, or negative expectation is a mathematical term, can you show us the mathematical proof how to get positive expectation from adjustment. Or some experts in financial engineering have proved it? do you mean you can any how(randomly) add or leg in? ---------------------------------------------------- http://www.fengshui-123.com