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Post by huh on Apr 18, 2016 23:11:46 GMT -5
I'd definitely be interested in selling them, and I'm going to look more into that. Buying them though, not so much. It just doesn't make sense to me that the further out they go the more expensive they get. They should be cheaper because everyone knows time will decay them - therefore, less premium paid. It's like the whole system was designed as a cash flow machine, and that cash flows almost entirely in one direction - to the sellers. I don't know the formulas those prices are based on, but I'll bet it WASN'T designed by option buyers. LOL
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Post by huh on Apr 18, 2016 23:18:58 GMT -5
BTW, SPX finally hit the 2094 upside target for the 01/20-02/11 Double-Bottom. Now things should get interesting. I don't think this market has seen capitulation yet. Maybe many bears have given up, but it doesn't feel like we've seen capitulation buying yet. |
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Post by walnut on Apr 18, 2016 23:49:41 GMT -5
I'd definitely be interested in selling them, and I'm going to look more into that. Buying them though, not so much. It just doesn't make sense to me that the further out they go the more expensive they get. They should be cheaper because everyone knows time will decay them - therefore, less premium paid. It's like the whole system was designed as a cash flow machine, and that cash flows almost entirely in one direction - to the sellers. I don't know the formulas those prices are based on, but I'll bet it WASN'T designed by option buyers. LOL As a buyer, you're buying time.. So yep I'd want to be a seller. Better yet a hedged seller. If you can figure out a way to do it you will have your own ATM. In the 90's as a stockbroker I had lots of people in long-term call options and every one of them made money during that crazy market, buying TXN, INTC, MSFT MU etc calls. It was so easy it was crazy. Made some of them millionaires. I didn't ever do it myself at that time. Didn't really have the money then too young. Also not sure you can trade so fearlessly with your own money to do that. I don't know why but this market seems different, it is not easy like that anymore. Or maybe it is? I don't risk my own money like that but I know much more about options now than I did then, shows how easy it can be with a little luck. |
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