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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe
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To: David Lind who wrote (430)3/14/2002 2:03:58 PM
From: KFE  Read Replies (1) of 1064
 
David,

Based on the tone of your message I am not sure that it is worth replying to you but I cannot let some statements go.

I am very ashamed at all the self appointed "experts" on this thread that somebody has not set you straight

I don't post here often but maybe you can back that up with some examples. There are many "self appointed experts" on message boards but they are usually trying to sell something and there is none of that here.

All the options strategies and knowledge in the world will not save you if you do not have a strong opinion of the direction of the underlying stock

Not true. Actually many option strategies will allow you to be slightly wrong on your prediction of the underlying and still be profitable. Other strategies such as straddles can let you profit from a large move in the underlying even if you don't know the direction.

and complete confidence in your knowledge of TA and FA

I couldn't disagree more but that is not a discussion for this board.

Two years ago I lost well over six figures when the market tanked, in options strategies that were advised by very well meaning people on threads like this.

First, no one should ever invest based what they read on an internet message board. Maybe it had to do more with your money/risk management ability than with options trading. It is impossible to be successful long term without practicing sound risk/money management. To use your analogy of a blackjack card counter I will give you a real life example of the importance of money management. When Atlantic City casinos first opened the rules were very favorable and a skilled card counter had a 1 1/2%-2% advantage over the house. I played on a team of mostly wall street traders who were very successful but I saw many skilled teams go bust because they did not understand proper money management
principles and bet too much for their bankroll. Whether you trade equities or options if you do not practice sound risk/money management you are doomed to fail.

There has been some good information on this board and if you took the time to read all the posts and understand them you might have a better understanding that options can be used to reduce risk and formulate a better risk/reward profile than just owning the underlying.

Regards and good trading,

Ken
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