Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 214.87

-0.1%

Dec 23 3:59 PM EST

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To: Elmer who wrote (72994)	3/2/2002 8:49:49 PM
From: minnow68	Read Replies (1) of 275872

Elmer, You wrote "For options there is no "house"" Unless you are trading commission free, the percentage of your trades you are paying in commissions is quite possibly larger than what the "house" takes in many casino games. Did you know that the house take on some casino games can be as little as 1%? If you paid a $10.00 commission on a $1,000 _round trip_ option trade, you have a "house" taking just as much as some casino games. You wrote "You are claiming that there is somewhere out there that 1% of the options traders who are making all the money that 99% is losing." Not at all, it's those pesky commissions that slowly eat things away. I say again, options are not a zero sum game unless you are not paying commissions. As far as the precise percentage of those who lose money, the 99% figure was given to me from an employee of a big brokerage house as the result of an internal study of their customers. Other sources give wildly varying numbers. For example, Motley Fool in this article fool.com says that only 80% of those who trade options lose money at it. In any case, I've seen other numbers in the 90%+ range. The 99% figure seems the most credible to me, obviously you disagree. Put this all another way, since the percentage of trades taken in commissions is of the same order of magnitude of the house take in a casino, why would you not expect the majority of long term customers in both venues to show the same profit/loss profile? Mike

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