ITT: Ask a professional options trader anything. I'll start with some common stuff:

ITT: Ask a professional options trader anything. I'll start with some common stuff:

>How old
24
>how much money
$200k/year
>what did you study
Financial Mathematics

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Explain why TA is bullshit before you do anything else.

>$200k/year
AHAHAHA, i make that by flipping shitcoins in a week!

No you don't. You are gambling.

The burden of proof is on proponents of TA to prove it works. There is no evidence that a head and shoulders pattern will predict future price movement for example.

what would be your strategy for trading bitcoin. when to take profit, how to hedge.

The only profitable way to trade bitcoin would be to market make it or do cross exchange arbitrage. Buying cryptocurrencies themselves is for the most part stupid. They basically have no utility. By all means, do research and if you come across a coin that could actually be useful, buy it.

Bitcoin has no utility.

>no esoteric/detailed knowledge to verify his cred
Confirmed LARPer. Get the fuck off my board.

How much capital do you work with? What have been your most successful strategies?

I'm not giving away any industry or company secrets but beyond that I should be able to answer any questions.

I always wanted to trade options on expiry day but the brokers I know won't let me buy for example:
BABA Call 187.5 options expiring in 1 hour
BABA at 186.3 at like 3:13 pm, options going for let's say 10c each

when I try to buy, my broker warns me I don't have enough funds in case they go into the money
>i dont plan on excercising them, just using the volatility to make easy money

You know a broker who allows this?

> How much capital do you work with?
Essentially infinite

>What have been your most successful strategies?

There is only one successful strategy. Find a good way to price options, then buy options below that value and sell them above that value.

>BiTcOiN hAs nO uTiLiTy

>you know a broker who allows this?

Nope. Ask reddit/options

alright
btw: buy Shipchain if you want to make big money in crypto

larp

Thanks, I'll bear it in mind next time I'm in the mood to gamble.

what a load of trash
OP is larping

>There is no evidence that a head and shoulders pattern will predict future price movement for example.
there is, it's called statistical evidence and self fullfilling prophecy.

stay mad nocoiner

Chad degree lad

>Essentially infinite

Piss off you larping fuckin faggot nigger panjeet. Bitcoin has no utility ye. At the very least its the world fuck drug market you fuckin mongoloid.

Is studying the math behind stochastic processes worth my time? Do you use it in your trading?

>there is, it's called statistical evidence and self fullfilling prophecy.

By all means show me the evidence. From what I know there is none though.

By that I mean if I see an opportunity to make money, my firm can allocate basically any size of money to that opportunity if we think it is profitable enough.

Sure it's worth your time but it would be only one of many steps before you would really understand options and know how to make money.

Looks like some people got triggered.

There's no internal logic to TA, but the way the risk guy at the Prop firm I used to be at explained it was

>Everybody else using TA
>Therefore pivots and shit will have momentum since other people will follow them
> Therefore self-perpetuating, despite no real logical basis.
> Therefore you might as well be aware of them, since trying to trade fundamentals and having your obvious play bounce off a 100% retracement since there's a massive level of idiots is no bueno.

To me what you are saying is verbal diarrhoea. You just wrote a bunch of garbage. It doesn't matter one dime why TA might work, the only thing that matters is EVIDENCE. If you have evidence that TA actually works (statistical, backtested evidence), that is proof that it works. Your post is nothing

How much did you initially start with?
How long practice before trading?
What did you use to study?

How do I buy options, like what broker should I use?

If Gold is going to pump like crazy in March, how would you take advantage of this?

If European banks will collapse from mid 2018 to early 2019. How would you take advantage of this scenario early?

Would options give you huge returns if you got some out of money options for these scenarios?

I want to see if I can use options to make some decent dough without risking too much.

There's a bunch of dude with 20 year+ careers that rely heavily on TA? I fully agree there's no logical reason for it, but there are enough professional trading bodies that need to lean on it as part of their risk-assurance policies that it does have some effect on the markets.

Even though it really shouldn't.

It's particularly big when you're trading Asian currencies, as their banks barely algo and make a ton of trading decisions based on old-fashioned TA. There's no reason it should work, but markets stay irrational longer than individuals stay solvent.

I work for a firm.

>How do I buy options, like what broker should I use?

I don't know anything about brokers, I use direct market access through a prime broker.

>If Gold is going to pump like crazy in March, how would you take advantage of this?

If you are confident that this will happen, then buy gold. If you want less risk just buy gold, if you want more leverage you could buy some calls.

>If European banks will collapse from mid 2018 to early 2019. How would you take advantage of this scenario early?

Buy puts on banks

>Would options give you huge returns if you got some out of money options for these scenarios?


If you you were right, yes, you would make a lot of money.

Chances are though, the guys on the other side of your trade know more than you.

How often do you make delta neutral trades? What % of your portfolio would you have in such trades? And what criteria do you pick to enter such a trade?

I usually hedge my delta using stock. I generally avoid large delta positions.

Well that still counts. Could you give us an example trade you made?

I don't get how to stay delta neutral and not bleed away the profits due to the premium decay.

I have ten blocks of my employer's stock (TRI) because of the ESPP. TRI isn't a great stock, mediocre divs and low growth potential.

I have been thinking about covered calls to make this holding work for me. Is this a good way to go? Should I just liquidate and buy stock I believe in? If I do covered calls, should I do near term or long term?

What textbooks/resources were most important in your studies? Looking to self-study some of this

Example:

Call Option A is worth 0.50 according to my model. An order comes in selling it for 0.40. I buy it, making 0.10 of expectancy. I then sell stock to hedge my delta.

u wot? you're a pro and you only go long never short theta?and you don't have limit on your account? my buddy is a market maker at optiver even he has account limit. sounds like larping to me

I didn’t say I only go long never short theta. You misunderstood.

you still havent shown the fucking HARD evidence

This LARPing nigger can't even post the textbooks he used save your breath

In that example, you're buying an OTM call it seems. How long do you stay in that trade? Because the longer it goes on, the 0.4 would decay to 0.

>Because the longer it goes on, the 0.4 would decay to 0.

You need to do some more reading.

OTM options will expire worthless.

Perhaps you are making this trade on a distant expiry?

Why do OTM options have value?

what are some good option books

What are stupid things to never do? and any other advice you have?

have like 70k in stocks started in august

Are you certified as an actuary

No.

Everything I learned is from inside my company. I would say stick to stocks.

Why do people come to Veeky Forums just to lie?

I am not lying, but if you don’t believe me you don’t need to post here.

So I lay out a softball question with specific details and I don't get a reply? Yeah this seems legit...

regarding stocks what are some things the company looks at that the average joe does not?

Where do I start when I just want to have some fun?

Instead of arguing with you about TA what are some good books to start with financial mathematics?

Okay here’s my reply. Don’t trade options. Or do if you want to make people like me money.

It’s not in my interest to tell you that. But with that said, not many people beat the market and a simple investing strategy works best unless you are smart enough and have the resources to find an edge.

>They basically have no utility
Anyone who says this deserve to lose on every margin trade they make.

What are the predictions for crypto on the pro side.

Financial mathematics is an extremely broad field. What do you want to learn specifically and why?

>tfw I make more than OP just by having bought eth early last year

ahahaha

I guess this is now "Ask an amateur options trader anything" thread. Shame.

Anyway since this one of the few non-crypto threads we have here, I'll answer for anyone reading.

OTM options will hold value till the expiry, since probability that the stock will reach the strike price and become ITM is always non-zero. However, as the expiry gets closer, the probability shrinks further. Hence the decay.

Good for you, join the line with the roulette and lottery winners.

Obv for winning trades. Most likely with eventually using successful models for programming a bot

I know more about options trading than you ever will.

Your suggestion that I should not own OTM options because they decay to zero is idiotic. Your questions are also stupid.

Options have value because of the volatility of the underlying stock. My model calculates the value of these options, regardless of whether OTM or ITM.

Do you know why options trading firms make lots of money?

Because of people like you.

Wouldn't the expectation be that the stock will rise at a rate that meets or exceeds that time decay on average, eventually surpassing the strike value?

If not why would anyone buy the option in the first place?

Yeah
Having a neutral world currency sounds like garbage to me, too.

Not much money... I make more than you at my sales job. You should find something you are more suited for.

I only buy calls and puts because the other options strategies, long term, will eventually net you $0 or negative returns in a monte carlo simulation.

We can debate this all you want, but my question is: how do find the fair value of an option give expected volatility?

In other words, give us a simple model that you would use when calculating expected fair value.

I make easily within the top 1% of my age group. I will likely earn more than you when I am the same age and my job is more intellectually stimulating.

Again, you do not understand options. Let’s make that clear.

>MUH MODEL
You mean your model of skimming fees off your unlimited funding base while you make a paltry 4% return on your trades to barely keep folks at present value? That model?

Nice LARP

Options are a massive scam industry where 90% of users lose literally their entire account.

fca.org.uk/scamsmart/binary-options-scams

Post proof or LARP.

>I only buy calls and puts because the other options strategies, long term, will eventually net you $0 or negative returns in a monte carlo simulation.

>We can debate this all you want,

This is wrong actually and is a pretty stupid comment.

Whether you make or lose money trading options in the long run depends on what level you buy or sell them at. If you buy options cheap or sell options rich, you’ll make money in the long run. All other options strategies are just a mixture of calls and puts.


> but my question is: how do find the fair value of an option give expected volatility?

The most basic way is the black scholars formula. There are other ways, and variations of the black scholars formula used in the industry, but they all have broadly similar results.

Yeessssss, you will make SO much more than me in 6 years, because your unlimited funding at present is just waiting for you to get older to make more money on.

Fucking.lame.

>binary options
>professional options trader

Lol. Binary options are indeed a scam.

I mean the model used to calculate the fair value of an option, brainlet.

larp confirmed at post 3
fuck off back to

Thoughts on the DJI

Good time to buy or wait til 22k?

Just buy. You’ll make money in the long run. Unless you have some solid reason for believing it is too rich right now.

Maybe so, but I think I got my money's worth in getting u mad. Love it.

Actually, I wasn't suggesting anything. I was *asking* you how long you stay in that kind of trade to ensure the natural time decay would be negligible. Stupid question maybe, but you still haven't given an answer for it. That's alright though, I think I got it.

True, that would be the expectation but doesn't always work out.

What assumptions in the Black-Scholes model are the most important in pricing to you personally?

Why would I have a personal opinion like that on a mathematical formula?

OP how do you feel about smart contracts making your job obsolete within 5 years?

There is no reason to stop “holding” the trade at any point. That is how customers who lose money think, not how professional options traders think.

If I buy an option, I will hold it forever until someone tries to buy it for what I think is too high a price.

I thought you would say that. Your hubris is actually predictable.

Imma say constant volatility

Not really I'm just not trying to have the market crash on me

My firm is hiring more people as time goes on. I’m not worried for the next 5 years. Obsoletion would happen gradually.

You can’t stop the market crashing on you sometimes and you can’t predict when it’s going to crash.

before this thread dies give us something useful other than just dont do options.

crypto threads are cancer but I wouldnt want to see this opportunity wasted.

Just the usual.

Save 10-20% of your income or more if possible, invest it in the market. Avoid actively managed funds. For 98%+ of the population this is what you should be doing.

What do you think will be the effect of interest rates finally going back up?

OP here.

I am the 1% of the 1% of the 1%.

The 1% who get top grades in high school, the 1% of those who study a top tier degree at a top tier uni, and the 1% of those who make it into a top tier financial institution.

Bullshit. My cousin was a director at Goldman Sachs at 26. You are nothing special.

>director at goldman sachs

aka never traded in his life

Your hubris knows no bounds.

Hopefully you'll drown like Narcissus or burn alive like Icarus.

Go fuck yourself. Or as Veeky Forums would say, "get reked kid".

Stay poor and LARPed.

>stay poor

I am not poor. I am in the top 0.1% of my age group.

one of the gayer larps. exquisite.

Not a LARP. Tell you what, next time I’m in work I’ll take a time stamped pic of my Bloomberg terminal.

do you have any tips for a beginner?

This ain’t your board. Do you own it cunt?

Do you know something about arbitrage? Recommended lit? Recommended lit to learn statistics (comp sci masters with statistics deficiency here)?

Thoughts on ChainLink?

Bitcoin has no utility, but do you honestly think ETH doesn't have any either? The amount of things you could build on it is basically
unimaginable.