The option strategies I listed are real strategies experts use to actually reduce risk.
They are explained 20 pages into Wilmott.
If anyone is serious about using them, then they had better understand options completely
What does understand option completely mean?
know how to do technical analysis
Extensive research has been performed on technical analysis. the results being that its bull. It doesnt even make sense, because, if there were +ev patterns, theyd be traded to saturation by noon (by computers owned by hedge funds programmed by c++ superstars).
and practice with a simulation account first.
Give a winning pokerstrategy to someone. Make sure that he understands it entirely. 9 out of 10 will still fail because of the psychological issues that come with gambling ones own money.
The Think or Swim platform allows advanced option strategy trading with play money. These strategies are golden for option trading experts, but dangerous for anyone who doesn't fully understand them.
calling something expert is calling yourself out on your own bullshit. the term expert is not well defined for a reason.
your so called strategies are just basic patterns that can be formed with put/call-options. Options arent so much traded as they are used for hedging exposure and arbitrage opportunities, among other purposes youll never understand because you lack basic mathematic ability that is important to understand the pricing and trading of financial instruments.
If I wanted to just deliver a blueprint for a gambling style high-risk option trade I'd say buy a Put on FAS when you think the market will fall, or buy a Call on FAS when you think the market will rise.
If i wanted to just deliver a blueprint for a way to lose all your money, Id say burn it. Or donate it to some cancer research foundation and brag about it. What you strategy mongers dont get is that any kind of non-discretionary "strategy" that can be written down like an algorithm can be programmed into a computer by people who know more about mathematics, computers and how the exchange works than you ever will. They rent facilities physically close to the exchange to get an edge in execution time.
The nature of options makes it very easy for the trader to get out of the majority of his trades with a small win. Thats because all financial instruments bounce around a lot. But this does not constitute a winning strategy. Its a lot like the guy who reads about the martingale approach to roulette. You win almost nothing almost all the time, but there will be that one time when you lose your entire roll.
Theres lots of not yet discovered arbitrage opportunity in sports betting. Check out Betfair. At least you wont compete against a couple financial institutions.
