I don't do options but I have been hovering within the sub.
The ones who made a lot of money in a short amount of time (as they intended) are called lucky and the ones who blew up their account — it was inevitable.
Doesn't sound like people know what they are doing cause the ones who get too quantitative psyche themselves out and the ones who know absolutely nothing are expected to lose all their gains the longer they play. I've heard here the comparison of buying options is like buying a lottery ticket.
If most general traders lose more than they make: the net losses are even higher with options traders. Thing with regular traders though is that most are not very knowledgeable in trading, don't have enough capital, have high expectations, and don't have enough time in the game so the failure rates are very high. But the ones who make it (and very few of them do) are apparently doing just fine.
Is it the same with options where only when you truly understand the science of options coupled with risk management (which i hear is slimmer than regular trading) and experience can you be consistent? I'm just trying to filter out the large portion of people who YOLO options/never studied it and see what the view is from there.
knowledgeable options traders: are you consistently profitable?
byu/AceDenied inoptions
Posted by AceDenied
6 Comments
those of us who SELL options are
Even with an edge, you can always have losers. If you cut losers quick and let your winners run, the gains tend to offset the losses. You can always come back from a 10-20% drawdown, but it significantly more difficult to come back from a -50% loss, -66% loss, etc.
You do not do options.
How about you contribute to the Expecting Mom’s page, I am sure they will care much more about what you think than we do.
*Is it the same with options where only when you truly understand the science of options coupled with risk management*
Yes. It takes years.
Whenever a new thread appears that starts with “I bought calls in….” then its a newbie buying lottery tickets.
It’s all a zero sum, market is efficient, every option trader goes bust eventually even if it takes years.
A trader needs to be exceedingly careful around this concept. It’s entirely realistic to be consistently profitable but it’s important to define what that actually means.
Defining the timeframe of consistent is really important. Amateur traders hate losing. Not that any of us enjoy it, but as you become more seasoned you learn that each trade is only one individual part of a broader system that will have thousands of samples over time. You learn to deprioritize the outcome of any one trade, and focus more on consistently deploying your system.
Tons of traders underperform or even go broke trying to never see a losing trade. Longterm system performance is the key here.