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Posted

Dear community!

I would like to get an opinion about the following video. I posted the link below. 

After making some research, I made the following assumptions and conclusions. 

- Options are probability-based financial instruments. The premium paid for buying a straddle is supposed to include all risks related to the potential change of IV, theta, gamma. 
- The chances of gain are 50/50 similarly to any short time predictions of the market price. Besides, you lose the spread and pay commissions. 
- Options pricing already includes any potential increase in IV and time decay is more likely to kill the potential trade.
- As the markets are very efficient, Options pricing already includes information about historical volatility. Even if we find stocks with high historical volatility during previous earnings, the greeks are always balanced between each other to make your chances of win to 50/50 minus spreads & commissions. 

So, what you think?
 

 

As options are 

 

 

Posted

Take a look:

 

 

I debunked tastytrade studies many times.

 

We will let them to do their studies and will continue making money with real trading, not theoretical studies. We prove the sceptics wrong every day - just look at our performance page.

  • Upvote 1
Posted (edited)

he looked at 4 earnings cycles for 5 stocks to write off a strategy?  Is he serious?  haha

 

this clip is a perfect example of everything that is wrong with tom sosnoff. 

Edited by RapperT
Posted

Not only he selected 5 random stocks (which among the worst for this strategy) and random time to enter - but he also tested it with Future ATM straddle.

Are you getting it?? He gives an example of AAPL trading at 92, and if you knew it would be at 94 before earnings, you would buy 94 straddle. I couldn't believe it, had to watch it few times.

Posted
1 minute ago, Kim said:

Not only he selected 5 random stocks (which among the worst for this strategy) and random time to enter - but he also tested it with Future ATM straddle.

Are you getting it?? He gives an example of AAPL trading at 92, and if you knew it would be at 94 before earnings, you would buy 94 straddle. I couldn't believe it, had to watch it few times.

supposedly his data guy has a phd...I wonder how he feels about whoring himself out to support Tom's crazy dogmatic (and usually fallacious) proclamations .  Then again most phd are meaningless these days.

I stopped watching when he cited his sample size and called people who disagree with him "monkeys" so i missed the part about the straddle prices.  That is hilarious and scary.

Posted

"Half of our team went out, .... 'cause this requires a crap load of work" for 5 stocks and 2 years of data? Amazing.

We can be happy though, less chance that these trades get too crowded over time.

Posted
13 minutes ago, Christof+ said:

"Half of our team went out, .... 'cause this requires a crap load of work" for 5 stocks and 2 years of data? Amazing.

We can be happy though, less chance that these trades get too crowded over time.

Even better they provide liquidity for the straddles we want to buy heading into earnings 

  • Upvote 1

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