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Probably you are correct. But that illustrates my point even more, I have made absurd amounts of cash by believing in the power of QE and the FED. Its not rocke

Probably you are correct. But that illustrates my point even more, I have made absurd amounts of cash by believing in the power of QE and the FED. Its not rocket science, its just accept that the fear mongering of "you are too dumb to use leverage" is false. But I will say, I have had huge returns on QQQ calls. Its working just fine for me to buy LEAPs 10-20% out of the money.

short_sells_poo 5y ago
You can certainly make a lot of money on options, but the behavior may be non-obvious to someone who doesn't have experience with them. If you buy a 10% OOM call and the market stays flat, you end up losing the entire investment even though the underlying hasn't moved. Do you know how does that 10% relate to the current implied or realized volatilities, are you actually buying the optimal strikes or have just gotten lucky? If this was just a fraction of your portfolio, then it's no harm done, but if you repeatedly punt your entire portfolio into OOM options, you are running a serious tail risk of being completely wiped out even if the market goes up! Options absolutely are rocket science. The actual pricing is anything but obvious and requires undergraduate level math. More advanced models require graduate level math and focused study. Yes, making money on stocks is easier than ever, but please for the love of God at least use something like levered ETFs or futures and don't bet the entire farm. The bubble is going to pop. Inflation is picking up, and the moment central banks step off the gas pedal (which they will have to), there's going to be a de-leveraging. Retail will almost always end up holding the bag one way or another. You can generally get 2-3x leverage with futures or ETFs as well and they are a linear instrument with obvious payoff characteristics. Informed players absolutely know and track the amount of flows that these super leveraged retail traders are injecting. Make no mistake, you are being monitored and trades are being done in anticipation of the flows you'll generate. And once the bubble pops and you are forced to liquidate, you are going to be liquidating at a really bad price.
- fdgsdfogijq 5y ago
  Again, I understand the risks. I about 15xed my starting principal from bottom in march 2020. My approach is to put all of my eggs in one basket and then watch the basket closely. While your post is rational, I can only say that OOM call buying continues to work out extremely well. And thats the point, it goes against every reasonable investing rule, but works extremely well. In some ways it is the truly rational decision to combat wage debasement (precipitated by asset inflation and fed money printing). The typical profile of what is too risky (OOM call buying), simply no longer applies when there is a FED backstop. People need to understand this, as surely many wealthy people and traders in NYC do. During the last FED meeting, when they double downed on transitory inflation, it was a heavily dovish outlook. Right then and there I went all in, and made a massive profit. The markets continue to hang on their every word, theres no reason to overthink it, when the FED speaks dovishly, believe them and buy calls.
  - ed25519FUUU 5y ago
    What specifically are you buying?

short_sells_poo 5y ago

You can certainly make a lot of money on options, but the behavior may be non-obvious to someone who doesn't have experience with them. If you buy a 10% OOM call and the market stays flat, you end up losing the entire investment even though the underlying hasn't moved. Do you know how does that 10% relate to the current implied or realized volatilities, are you actually buying the optimal strikes or have just gotten lucky? If this was just a fraction of your portfolio, then it's no harm done, but if you repeatedly punt your entire portfolio into OOM options, you are running a serious tail risk of being completely wiped out even if the market goes up! Options absolutely are rocket science. The actual pricing is anything but obvious and requires undergraduate level math. More advanced models require graduate level math and focused study. Yes, making money on stocks is easier than ever, but please for the love of God at least use something like levered ETFs or futures and don't bet the entire farm. The bubble is going to pop. Inflation is picking up, and the moment central banks step off the gas pedal (which they will have to), there's going to be a de-leveraging. Retail will almost always end up holding the bag one way or another. You can generally get 2-3x leverage with futures or ETFs as well and they are a linear instrument with obvious payoff characteristics. Informed players absolutely know and track the amount of flows that these super leveraged retail traders are injecting. Make no mistake, you are being monitored and trades are being done in anticipation of the flows you'll generate. And once the bubble pops and you are forced to liquidate, you are going to be liquidating at a really bad price.

fdgsdfogijq 5y ago
Again, I understand the risks. I about 15xed my starting principal from bottom in march 2020. My approach is to put all of my eggs in one basket and then watch the basket closely. While your post is rational, I can only say that OOM call buying continues to work out extremely well. And thats the point, it goes against every reasonable investing rule, but works extremely well. In some ways it is the truly rational decision to combat wage debasement (precipitated by asset inflation and fed money printing). The typical profile of what is too risky (OOM call buying), simply no longer applies when there is a FED backstop. People need to understand this, as surely many wealthy people and traders in NYC do. During the last FED meeting, when they double downed on transitory inflation, it was a heavily dovish outlook. Right then and there I went all in, and made a massive profit. The markets continue to hang on their every word, theres no reason to overthink it, when the FED speaks dovishly, believe them and buy calls.
- ed25519FUUU 5y ago
  What specifically are you buying?