I like the exchange of ideas too.. this will be my last post on this thread though(not trying to be dramatic), unless I see further mistruths that I feel I need to fight off, because I’m burnt out and I think the information has pretty much been exchanged. I’m not debating whether or not you should buy options, it doesn’t matter to me what you or anyone else does, I only want everyone to be successful. At this point I’m just tryign to defend what I believe to be truth, and it’s not a question about options risk, it’s a question of certain statements and assertations.
The 90% number has been repeated over and over… are we willing to take Chris’ word for it? Have you found a source that backs up his claim? 90% sounds like a very *sensational* number, and it’s round too! I didn’t take his statement as fact, but as hyperbole…
I also think some responses are under an assumption that one must hold options to expiration… just because an option expires in Nov doesn’t mean the purchaser has to hold it until then, option holder can sell it yesterday or tomorrow next week or any day the market is open.
The plane scenario was to show that even if Chris statement that 90% of options expire worthless is true, it’s not synonmous with 90% of PEOPLE holding options will have them expire worthless… possible outcome % does not take into account the ENDLESS number of scenarios… just as you described… (See http://airsafe.org/ I put in about 40 hours of near non-stop time into that site before I flew the first time!!! 🙂
“He was saying that it is not risky in the way he does it with a max 5% trade and a stop loss, but it could be risky and irresponsible without those measures. I didn’t interpret him to say your trades are risky.”
He warned me about my risky situation, prior to me providing any further information about the % of my cash to option investment ratio. What does telling me that options are risky accomplish? I mentioned volatility enough to bore a person in my first post… That’s partially where some of the confusion came from, most importantly thank you for taking the time to even adress my post Chris.
“It does not however, have volatility that extreme, unless it is maxed out irresponsibly.”
I don’t feel that volatility has anything to do with $ amount of a persons portfolio, I believe that it descries past or present how much up or down a stock can go. Given that I described the stocks, and provided %, what other information can be associated with the “maxed out irresponsibly” claim. I am not trying to prove Chris wrong or challenge him, I’ve already conceeded experience and knowledge, I am genuinely interested in what he was trying to communicate by that statement in response to my post, without him knowing what % of my capital was invested in options.
“You have a 90% chance of your options expiring worthless because 900 out of every 1000 options expire worthless.”
I can’t address that statement again, because it’s been repeated at least 4 times now, and I feel that it’s slightly deceptive(this word might be a little strong, but I’m limited on vocab) and not true. Should someone else provide multi-sourced evidence that it’s fact, I’ll accept and learn from it.
The good thing is, we’ve explored lots of different opinions.. and we can for what it’s worth, use hindsight to grade our decisions based on our objectives.
Thanks everyone who read my posts, for having the patience to navigate my atrocious grammar!! 🙂
I don’t have time to scan this for broken sentneces right now my gf wants to go watch fireworks and we’re about to miss them! Happy 4th everyone!!
