Author Topic: How do they get away with this? (Blatant lie)  (Read 1855 times)


  • Bristles
  • ***
  • Posts: 451
  • Age: 136
  • Location: North Carolina
  • I think we can make it
How do they get away with this? (Blatant lie)
« on: June 07, 2014, 07:45:26 AM »
While it is a fact that 80% to 90% of options buyers lose money, there's a flip side... It means that 80% to 90% of options sellers make money.

No, it doesn't.   

Got an email touting option selling strategies.   52 of her last 52 trades were profitable.  Gee,  put writing "works" in a raging bull market.   But that statement, quoted above,  is so not true it made me gag.  Options are zero sum,  so $$ made = $$ lost.    But just because 90% of buyers lose money does not mean 90% of sellers make money.  Maybe 90% of the sellers lose money too.  Maybe ALL of the money is made by a small number of sellers.


  • Handlebar Stache
  • *****
  • Posts: 1444
  • Age: 41
  • Location: Texas
Re: How do they get away with this? (Blatant lie)
« Reply #1 on: June 07, 2014, 01:13:16 PM »
Option sellers make money in normal markets, only to give it all away in stressed markets. They can consistently make 1-2% a month for years and then lose 80-100% in 6 months or even 6 hours. The best way to make long-term money in options is to be a dealer that sells them while hedging with the stock and pocket the commission/spread :)

Taleb was running his hedge fund buying way out of the money options in anticipation of a crash where they would make hundreds if not thousands of a percent return at the expense of option sellers. However they recently shut it down. I guess it just bled to death without having a crash in the past few years.