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captkirk1767 (November 30, 1999 at 12:00 am)
@sjoptions And of course it is just as realistic to point out that 'buy and hold' would have worked quite nicely if different points for entry and exit are selected on any chart. I'm with you though, I am not a 'buy and holder'.
sjoptions (November 30, 1999 at 12:00 am)
Yes, obviously looking back in time, buy and hold may have worked a year or two, but in general, it doesn't work anymore. For example, look at the SPX in 07. What if you bought then and held until now? In three years of waiting you would be down about 30%. If you bought in 08 and sold in 09 you could have lost about 55%. Those are also realistic scenarios based on facts. Just look at the price charts.
sjoptions (November 30, 1999 at 12:00 am)
Sure, IV can be your friend and also your enemy. Not everyone can predict a 300% increase in volatility before it happens. If it was that easy, we'd all be rich and fast. Just imagine how much we all could have made if we knew about the "Computer Glitch" a day before that happened. We don't teach or trade that Micky Mouse Trade. To me, that is exactly what it is.
captkirk1767 (November 30, 1999 at 12:00 am)
@sjoptions Again, volatility is the option trader's friend, not his enemy. It's actually the bread and butter of the game. Having said all that I appreciate your efforts to point out the danger of some strategies. Been there, done that. In ad copy "today's market" can be said of any market at any point in history. Anyway, I might still look at it at some point. I've seen mickey mouse and mighty mouse ears....etc.... different variations on spreads.
captkirk1767 (November 30, 1999 at 12:00 am)
Well, I appreciate the feedback. If I were you I would avoid saying 'always' 'never' '99.99 percent of' something, traders, markets....etc... "Can't buy and hold"....yes you can. Many funds do. If you would have 'bought and held' in March of '09 you'd be sittin' pretty right about now. "99.99 percent of traders do not know how to deal with this market"- I just can't hang with that statement.
sjoptions (November 30, 1999 at 12:00 am)
It's great if you are able to trade with volatility. Most option traders have a basic understanding of it,but they still construct risky trades. If I said that 99.99% of option traders lose money, well that is pretty close to the truth, but I do not know the exact number. In my profession I speak to traders every single day, and I hear the same story over and over again. In the business there are very few that make money each year. That is a fact. If you are one, I applaud you. Keep it up.
captkirk1767 (November 30, 1999 at 12:00 am)
Ouch. A couple of false statements here. "99.99% of options traders cannot trade this market successfully." DOH! Completely false. Here's another one "how do we combat volatility?" The implications of the statement is that options traders cannot deal with volatility. False. Savvy options traders use volatility to their advantage. That's pretty much the name of the game. I know of no faster or safer way to make money than with volatility collapse. |
