I used to lose money so consistently buying options I thought, “Hey, I should sell options”. Now I make money pretty consistently.
Most underrated comment, this is hilarious. "More than 80% of options expire worthless!"
How to Lose Money
181–190 of 300 posts
Re: How to Lose Money
#182Earlier quoted context omitted.
May I ask how you're able to make a living for several years with only 400 students? Do you sell each course for like $500 or more?
Not OP: Probably a monthly membership program, $25 per student per month would be $10k gross. Ionic Academy is a good example I can think of, I was a member for just under a year, super helpful and regular content and probably doesn’t need huge amounts of members to be viable
I guess that's true. I didn't really consider monthly fees for a course from one person. But then I would say that he/she probably didn't have 400 students in total, but instead 400 subscribed students at all times. Unless each student stayed subscribed for several years, which I find unlikely unless he/she releases new high quality content every week.
Re: How to Lose Money
#183Earlier quoted context omitted.
But the truth is all the awesome analyses with those programs still cannot actually predict the STOCK PRICE right? If I truly believe I have a better guess about whether a stock is going to go up than the general market conensus (which is what I'm assuming is powering options pricing), then I do stand a chance of making money right? None of what you say seems to change anything about how a regular investor looks at a…
> If I truly believe I have a better guess about whether a stock is going to go up than the general market conensus (which is what I'm assuming is powering options pricing), then I do stand a chance of making money right? Yes [1]. But a one-way single-leg options bet is far less likely to make you money, in that case, than just going long or short the stock. [1] I am going to parse “truly believe” as have an informat…
Makes sense. My limited understanding is that with options I don't just have to guess that the stock will go up but also by how much and when. Agreed that many amateurs (like me) don't realize this well enough.
Re: How to Lose Money
#184The "fastest" way of losing money - which the author says is trading options, is naive. Even with a margin account, your purchasing power is 4:1, at best! Now - if you have _enough_ money, you can write uncovered(aka 'naked') option contracts and open the possibility of unlimited losses at least, but that won't afford you any more leverage. IMHO...that "fastest" method to lose money(in the markets) is the commodity f…
>Even with a margin account, your purchasing power is 4:1, at best! [...] IMHO...that "fastest" method to lose money(in the markets) is the commodity futures market. You get 200:1 leverage there Shouldn't margin be weighted against volatility? Part of the reason why they give you that much margin in the first place is that commodities are presumably less volatile.
Commodities are infinite more volatile than stocks - mostly due to the sheer [large] volume of market participants. For example, today the nasdaq 100 future moved 22 points in the first 60 seconds of the day session. That's $480 gain/loss, per contract - in the first 60 seconds. Within 180 seconds, it moved a further 50 points. To recap...within the first 3 minutes, the futures market moved 72 points, or $1,440 per contract.
Some extra information (in case you are curious)... the symbol I mentioned above is "NQ", it's the commodity future for the Nasdaq 100. Margin requirements are (on average) $15,000 to $20,000 per contract, which will vary by the broker. There is a catch though...during the hours of 9:30-4:00p EST, those margins drop to $500-600 per contract. These are "day margins", ie for "day trading". So in those first 180 seconds, you could lose 3 times the margin required for a small(1 contract) position.
edit: updated margin requirements to include day margin
Re: How to Lose Money
#185The "fastest" way of losing money - which the author says is trading options, is naive. Even with a margin account, your purchasing power is 4:1, at best! Now - if you have _enough_ money, you can write uncovered(aka 'naked') option contracts and open the possibility of unlimited losses at least, but that won't afford you any more leverage. IMHO...that "fastest" method to lose money(in the markets) is the commodity f…
I think shorting a stock is even faster.
Re: How to Lose Money
#186> Do things because you have genuine interest in them... Don’t start out with a singular goal of making money. I really hate advice like this. Have you ever seen a business before? Have you ever met a person? Pretty much no interests are monetizable and almost all companies are doing really boring work. I don’t believe anyone in the world is truly passionate about things like payroll software. If I followed my intere…
I like to code. It hasn't made me rich but I've made a good living. If I had my choice I wouldn't be coding to the whims of the publishing industry, but I still enjoy it. Much more than I would, say, the construction work that my father pointed me at. So the "genuine interest" advice has been good for me.
Re: How to Lose Money
#187My experience with Options was pretty frustrating. I had a couple of big wins, but those mostly evaporated by a couple of bad trades. So while I haven't lost money (yet), I've fared much better with simply investing (buy and hold). Now with so much volatility in the market, I'm trying to take advantage of it by using a backtesting tool to become more consistent. So far it's been worth the fees. The gains aren't as ou…
The problem with back testing is you can never know if or when the conditions change such that it no longer works. A useful tool, but more for figuring out what not to do than what to do.
Re: How to Lose Money
#188A secondhand anecdote: An acquaintance of mine used to be a professional options trader. A fairly successful one, too. He retired from the job in his early 30s. After that, he tried doing a little options trading on his own behalf, for old times' sake. The look on his face as he recounted how that went down was a sight to see. I don't know exactly how much money he lost, or how quickly, but my take-away was, roughly,…
depends on the strategy. if you have fairly good predictions about the future, you don't need any of those things. If you are into HFT, you need exchange colo. etc
Re: How to Lose Money
#189> Do things because you have genuine interest in them... Don’t start out with a singular goal of making money. I really hate advice like this. Have you ever seen a business before? Have you ever met a person? Pretty much no interests are monetizable and almost all companies are doing really boring work. I don’t believe anyone in the world is truly passionate about things like payroll software. If I followed my intere…
This is way, way, way less true than it used to be. There are pro and semi-pro leagues in lots and lots of games, YouTube and Twitch make getting paid for entertaining rather than competing possible. Patreon, Instagram and TikTok makes getting paid for your lifestyle far far easier and more lucrative. Getting paid as an independent developer on open source projects is possible these days, sadly there's precious little there still for free software.
None of it is easy, but nobody promised anyone an easy life.
Re: How to Lose Money
#190"Build a following first" Easier said than done, why would people follow you if you don't have anything interesting to share? You have to start somewhere
You need to start by doing something interesting. There are lots of things that qualify. Most are hard work. People will follow you if you spends days or weeks learning about something and then giving the 5-30 minute summary of the interesting things. Interesting is in the eye of the beholder, so you can pick which parts you want to call interesting - the important part is to make it interesting to your readers. (Truth is not a requirement, though I would urge you to stick to the truth)