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> There are low risk strategies […] that basically guarantee you income for doing nothing Listen to yourself.

• highwaylights 4y ago
  You owe me a $10 keyboard. This one’s covered in coffee now.
• logicalmonster 4y ago
  What is your issue with my comment? What I said is true. You can essentially guarantee yourself an income. The risk comes from anytime you're holding stock and the stock value decreases, but you can sell calls on that and earn an income on that until a company goes out of business. This type of wheel strategy is inherently less risky than merely buying stock. There's obviously a lot of nuance to even simple options trading and I don't want to write out 100 paragraphs for some casual comment.
  • jnwatson 4y ago
    That's like saying you can rent out a burning house. It is technically true, but folks usually like to preserve their initial capital while making income. There Ain't No Free Lunch in options. Covered calls give up potential upside gains for income now. You still have the same downside risk as the underlying stock.
    • logicalmonster 4y ago
      > You still have the same downside risk as the underlying stock. Taken as a whole, it's not the same exact downside risk because the premium you collect can make up for whatever downside that exists anytime you're holding a stock. I'm not here to tell you what to do with your money, but all I'd say is that using a wheel strategy is inarguably less risky than buying stock outright.
    • SilasX 4y ago
      That is a good point, but is in no way evident from the initial reply[1] and its quotation of the objectionable part. [1] https://news.ycombinator.com/item?id=33548323 https://news.ycombinator.com/item?id=33548323
  • kelseyfrog 4y ago
    Right, so in case it's not clear, people are asking you to quantify "basically" and "essentially" with math to get a number out. English words aren't going to make your point. They want you to back it up with a statistical analysis.
    • logicalmonster 4y ago
      > people are asking you to quantify "basically" and "essentially" with math to get a number out You're hoping to see a specific number? What number are you even asking for? To me, your comment doesn't make even a tiny bit of sense because we're not talking about a specific quantity of a stock at a specific price for a specific time period, we're just talking about the general principles of basic option strategies.
      • kelseyfrog 4y ago
        That's the beauty of outlining a methodology. You'll need to answer a few things but most importantly, how do you quantify risk when executing your strategy ie:selling calls? It feels like you're going off vibes, which is fine, but what's irking people is that "basically" and "essentially" are weasel words that make it seem like you're trying to launder gambling as investing. Maybe a better question to start with is, which measures of quantitative risk are you familiar with and how to they play into your strategy?
  • mikestew 4y ago
    ...but you can sell calls on that and earn an income on that until a company goes out of business. ...or the buyer of the contract exercises the option. And yes, there's a lot of nuances, there exercise of options being just one of the nuances. That's why "you can essentially guarantee yourself an income" simply isn't true. Starting with the obvious fact that if it were true, everyone would do it.