4 ms·

Frankly, just reading the headline, I disagree. First of all, yes in a broad sense most people are gonna get fucked trading options if you don't know what they'

Frankly, just reading the headline, I disagree. First of all, yes in a broad sense most people are gonna get fucked trading options if you don't know what they're doing. I know what I'm doing and my strategy is exclusively long equities. But you can absolutely make metric fuckloads of money trading options and there are some trades out there that ain't that hard to figure out. For example, you can print money on a regular basis trading puts on UVXY when volatility spikes. You just need to understand what you're doing. Now trying to predict earnings and all that bullshit -yeah that's a suckers game. But there are plenty of options strategies that can make retail traders a lot of money. (BTW you may ask why I don't trade uvxy options if I'm so confident in its profitability - well I can't conduct the above mentioned strategy without violating regulations because of my occupation. But I did prior to my employment and consistently made double digit % returns in 1 trade every 2 months or so.)

highwaylights 4y ago
Double digit percentage returns every two months you say? Why with a starting balance of $10,000 that would be (at the very lowest end of that range) over $1.25 billion dollars after 20 years. If you don’t mind me asking, what was the offer that tempted you to give that up?
- bena 4y ago
  I feel a sort of gambler's mindset here as well. I'm sure you can get the occasional double digit percentage return every couple of months, but it is also couple with a lot of losses as well.
  - DontchaKnowit 4y ago
    Definitely has the potentially for loss, but it was pretty damn consistent while I was doing it. As awful as it is, this trade is basically just taking advantage of retail options traders that fundamentally don't understand how UVXY works
- DontchaKnowit 4y ago
  To be clear I was talking returns on the trade - not returns on my portfolio. The distinction here is that you could not throw your whole bankroll at this trade, because there is limited liquidity on both sides of the trade : e.g. when uvxy spikes, you are buying from the hand full of suckers that are willing to sell cheap puts. When it starts to trend back down, you are selling to the hand full of suckers that are willing to buy expensive puts. I was trading positions worth under 5k with this strategy when I was getting those returns. So yes, you are correct, this sounds too good to be true cause it is. you wouldn't be able to pull this strategy off with much more than what I was trading because the liquidity just wouldn't be there, so you could not compound these returns over time really, it would be a constant, fairly reliable source of high returns on a small amount of capital. And the offer was for a job in the industry that would afford me the opportunity to learn a lot more about investing in general, especially about volatility based securities, while I was on the clock. It roughly doubled my salary too, so it was hard to pass up.
mellavora 4y ago
> First of all, yes in a broad sense most people are gonna get fucked trading options if you don't know what they're doing And this is exactly the problem. Most people don't know what they are doing, and it isn't easy to learn. Even if you have a positive expected value bet, if you aren't using Kelly bet sizing, the odds are you end up bankrupt. I notice your post only mentioned a positive outcome bet, but does not even hint at risk management tools.

highwaylights 4y ago

Double digit percentage returns every two months you say? Why with a starting balance of $10,000 that would be (at the very lowest end of that range) over $1.25 billion dollars after 20 years. If you don’t mind me asking, what was the offer that tempted you to give that up?

bena 4y ago
I feel a sort of gambler's mindset here as well. I'm sure you can get the occasional double digit percentage return every couple of months, but it is also couple with a lot of losses as well.
- DontchaKnowit 4y ago
  Definitely has the potentially for loss, but it was pretty damn consistent while I was doing it. As awful as it is, this trade is basically just taking advantage of retail options traders that fundamentally don't understand how UVXY works
DontchaKnowit 4y ago
To be clear I was talking returns on the trade - not returns on my portfolio. The distinction here is that you could not throw your whole bankroll at this trade, because there is limited liquidity on both sides of the trade : e.g. when uvxy spikes, you are buying from the hand full of suckers that are willing to sell cheap puts. When it starts to trend back down, you are selling to the hand full of suckers that are willing to buy expensive puts. I was trading positions worth under 5k with this strategy when I was getting those returns. So yes, you are correct, this sounds too good to be true cause it is. you wouldn't be able to pull this strategy off with much more than what I was trading because the liquidity just wouldn't be there, so you could not compound these returns over time really, it would be a constant, fairly reliable source of high returns on a small amount of capital. And the offer was for a job in the industry that would afford me the opportunity to learn a lot more about investing in general, especially about volatility based securities, while I was on the clock. It roughly doubled my salary too, so it was hard to pass up.

mellavora 4y ago

> First of all, yes in a broad sense most people are gonna get fucked trading options if you don't know what they're doing And this is exactly the problem. Most people don't know what they are doing, and it isn't easy to learn. Even if you have a positive expected value bet, if you aren't using Kelly bet sizing, the odds are you end up bankrupt. I notice your post only mentioned a positive outcome bet, but does not even hint at risk management tools.