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I use Robinhood app to gamble on options, most of the times I lose and sometimes I won big to cover all losses. I don't understand options, other than a few th
by econcon 7y ago
I use Robinhood app to gamble on options, most of the times I lose and sometimes I won big to cover all losses.
I don't understand options, other than a few things about them which help me trade them
It's ok to ignore the big picture. Not everything has to have a profound meaning behind and similar are the stock moves. I believe most of the movements are irrational, so studying fundamentals or anything is going to offer nothing other than wasted time.
I love the crazy vibe of that subreddit which motivates me to take crazy positions which I'd have never taken if I carried on with my risk averse friends.
Even if probability of becoming double digit millionaire from a single digit millionaire is small through options trading. It's well worth it because once you've saved enough to retire, why not bet on random positions? You never know when you'll fall on the long tail end of the game and experience the Black Swan event which changes your life forever.
Then I am also doing other things which people might consider crazy like steroids to maintain Greek god physique - considering neither I am model, atheletic or body builder.
YOLO is not bad way to live if it gives you the highs you need move out of sorrows and sufferings.
- vijucat 7y agoSince you work out: you must have seen that results accumulate (such as being able to lift more). The problem with the WSB style of trading is that the knowledge doesn't accumulate. It's just gambling all the way down. And you still end up spending time on it! If you'd like an easy-to-read + thin first book on options, I'd recommend Frans De Weer's "Introduction to Options Trading": https://www.amazon.com/Introduction-Options-Trading-Frans-Weert/dp/0470029706 https://www.amazon.com/Introduction-Options-Trading-Frans-We...
- econcon 7y agoLook into Green Lumber Fallacy.
- vijucat 7y agoGood one! This actually does apply to options trading. Pricing quants may need to be masters of stochastic calculus, Ito's lemma, et al, but if you're trading and not pricing them, this analogy applies: even riding a bicycle, when described with physics equations, probably involves higher-order calculus that would put 2nd order options greeks to shame, but one does not need to understand the maths to learn cycling or even be the world's best cyclist! Similarly, if you trade the same instrument enough, you build "muscle memory" for how it moves, i.e., you get a feel for vega, vanna, et al which is almost visceral. The practitioner may use informal descriptions like, "uh oh, I can feel it bend now" rather than calculus to refer to a gamma-based acceleration of option price, but it is perfectly good enough.