Risk reward sucks for options

Discussion in 'Options' started by wxytrader, Jul 29, 2024.

  1. Overnight

    Overnight

    Conversational flow is being restored. it is a great thing.
     
    #51     Jul 30, 2024
    MACD and spy like this.
  2. poopy

    poopy


    Wow, they invented digitals!
     
    #52     Jul 31, 2024
  3. wxytrader

    wxytrader

    Code what? I don't use rigid trading rules so automating not really an advantage.
     
    #53     Jul 31, 2024
    spy likes this.
  4. spy

    spy

    Multivariate calculus, and math in general, involves a lot of rigid rules... so it's a fine line. If you literally want to use pencil and paper, that's OK too. You might be/become a great mathematician. IDK

    I'm sure you'll find your niche. I believe in you!
     
    Last edited: Jul 31, 2024
    #54     Jul 31, 2024
  5. poopy

    poopy


    The dude is trading CFDs and calls you a hobbyist.
     
    #55     Jul 31, 2024
  6. wxytrader

    wxytrader

    Here is what would have happened with the price drop on Tuesday:

    upload_2024-7-31_5-34-22.png

    AUG9 111 atm put on Monday was @ 4.87
    On Tuesday it would have been @ 9.21 when price was at 103.73
    So we have a Pnl of 4.34... not even a 1:1 reward.


    Here are the results of the gap up this morning if you purchased a call yesterday.

    upload_2024-7-31_5-43-41.png

    AUG9 103 atm call on Monday was @ 4.89, and today is @ 8.95
    So we have a Pnl of 4.06... again not even a 1:1 reward.

    This is best case scenario too lol.
     
    #56     Jul 31, 2024
  7. poopy

    poopy

    Buying 103 in a cash account will earn you 8-9% based upon current marks (NVDA?). Synthetic digital (103/104 cs) made 30%. The call doubled.

    WTF is your point?
     
    #57     Jul 31, 2024
  8. ironchef

    ironchef

    @padutrader? :D
     
    #58     Jul 31, 2024
  9. wxytrader

    wxytrader

    (Yes NVDA)

    My point is that buying options suck as the title suggests when you take into account the probability of making profits versus the risk.
     
    #59     Jul 31, 2024
    MACD and MarkBrown like this.
  10. wxytrader

    wxytrader


    Well I watched a video on multivariable calculus. I went in knowing nothing at all, and somehow now I know even less. :)
     
    #60     Jul 31, 2024