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That is just not true. One of your primary advantages as a retail trader is that your positions (being much smaller) don't move the market anywhere near as muc

That is just not true. One of your primary advantages as a retail trader is that your positions (being much smaller) don't move the market anywhere near as much as if you're a big institutional investor. So you can pursue strategies that are off limits to institutional investors. Options on small cap companies tend to be illiquid and traded in small quantities, so they often won't be touched by big money. This presents an opportunity for retail investors.

mrfredward 8y ago
It's true that being small is an advantage, but there's something else to consider: Long-term investing is a positive sum game--companies grow and return money to investors, so most investors make money over time. Short-term trading is not like this, it's zero sum. Every quick profit comes at someone else's expense. As they say in poker, if you don't know who the fool at the table is... ...it's probably the guy trading on an app he downloaded 5 minutes ago, whose brokerage doesn't even let him use limit orders.
- bunderbunder 8y ago
  Well, sometimes it's going to be that little guy, but not always. You can also, for example, try to skim off the moves of big institutional players, whose activity frequently moves prices, by trying to get in there and be the one who reaps the benefit of that price shift. The ultimate seller maybe gets a little bit less than they might have, and the ultimate buyer maybe pays a little bit less, and there's maybe a small gap in between those prices that reflects the trader's take. I do agree that there can be nooks and crannies with ample room for small players on the equity options market. I'm just not convinced that someone who thinks they have the skills (and guts) to reap a reliable reward in that space should be going straight to Robinhood without at least submitting an application to Citadel first.

mrfredward 8y ago

It's true that being small is an advantage, but there's something else to consider: Long-term investing is a positive sum game--companies grow and return money to investors, so most investors make money over time. Short-term trading is not like this, it's zero sum. Every quick profit comes at someone else's expense. As they say in poker, if you don't know who the fool at the table is... ...it's probably the guy trading on an app he downloaded 5 minutes ago, whose brokerage doesn't even let him use limit orders.

bunderbunder 8y ago
Well, sometimes it's going to be that little guy, but not always. You can also, for example, try to skim off the moves of big institutional players, whose activity frequently moves prices, by trying to get in there and be the one who reaps the benefit of that price shift. The ultimate seller maybe gets a little bit less than they might have, and the ultimate buyer maybe pays a little bit less, and there's maybe a small gap in between those prices that reflects the trader's take. I do agree that there can be nooks and crannies with ample room for small players on the equity options market. I'm just not convinced that someone who thinks they have the skills (and guts) to reap a reliable reward in that space should be going straight to Robinhood without at least submitting an application to Citadel first.