Writing options sureshot way to lose money

Dear Sir,
Can you throw some light on benefits of guts over strandles? More the details, better.
Thanks

Hey,

I am currently pursuing Masters of Finance in University of Melbourne, Australia. We have a course know as Portfolio Management. In that course first topic about options is people who buy are like buying lottery tickets. Just hoping they can win the lottery which happens very rare. And it have positive skewed outcome which has low variance. Which investors like. But in long run they never succeed. But institutional investors are like people who sell lottery tickets they never loose. If they loose why would they even sell lottery tickets. Just stick with basics. And if you are worried about downside risk derivatives are not for you. And you have no right to decide or influence other investors risk. Itā€™s upto their utility function.

Thanks,
Prasanth Annepu

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Forget options. Every trade has a risk reward ratio. Its upon you put a stoploss and define your risk.
Take a print out and paste this anywhere: Risk in a position is defined by you and not the instruments.

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@ksksat I am a Option writer more then 10+ years , i am living through option writing , every year 50% of profit i am earning ,

your argument , if option buyer is safe in your mind , option buyer is always a gambler , he will try to make quick profit its will not happened , in your minds set is option buyer have limited risk , if you loose continues loosing in option buying your account also will wipe out slowly , option seller can do adjustment and come out of loos , option buyer cannot do adjustment , you dont know about option

I seen all black swan event in the 10 years period . in black swan even i always come out of loss . trik is with me i need not to worry ,
if you donā€™t know how to drive a car , then you need to fear for accident
if you know to drive a car, then enjoy the RIDEā€¦

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what is the trick ?

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Can i ask something? Iā€™m a beginner on a decent learning curve with a strong back groundā€¦ Initially was really attracted to Undefined Risks strategies but the black swan worries meā€¦Now Iā€™m researching more defined risk strats. I guess the question I ask isā€¦considering we are in a synthetic bull market with money being dumped in a 2008 kind of situation could be around the cornerā€¦with all the experience you have do u err on condition selling naked options in the current enviornment or you confident you can just roll out the swan?

Nowadays option buying also has restrictions like increased margins in the last 4 days of expiry. Also in India options have some serious liquidity issues in the near month expiry as well.

What kind of setups (spreads, calendars, diagonals) in index options, nifty or banknifty, can achieve this?
Any examples pleaseā€¦
Thanks.

Is this strategy developed with two different expiries?

Maddy, give some gyan to the guy who strated the thread ā€œbig losers of Stock marketā€ :joy:

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Its a reverse double calendar spread.
Simple.

Itā€™s calendar spread.
So yes, itā€™s created using diff. experies.

iron condoring simply?

New traders & overnight billionaires donā€™t allow words like ā€œhedging, stop lossā€ in their world.
& no one can make positive attitude who has been filled with full of negativity. the peoples with this mentality first trade without taking proper knowledge, & after result they starts spreading negativity.
many peoples donā€™t want solution, they just want to highlight problems.