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The market is not as efficient as you think. There is a lot of money to be made in options, but no one wants to give you free alpha. The market like any other s
by zelly 6y ago
The market is not as efficient as you think. There is a lot of money to be made in options, but no one wants to give you free alpha. The market like any other system can be reversed engineered. I'll give you a hint, learn how the VIX is calculated.
Also if you believe just buying the S&P 500 is going to be most profitable, then why not buy deep ITM calls on SPY. You'd at least 2x your exposure at the same cost.
- sombremesa 6y ago> why not Because time. Options expire, shares don't. When you own shares, time is your friend — if the market goes down and you still believe your thesis holds, just wait. When you own options, time is your enemy. Should anything happen at just the wrong time, you have no choice but to take a hit.