Today's action is a classic as to why most do not make money trading options.
Last week I ran a post here about not able to roll the GDX because of so far in the money. Well if anyone seriously could have predicted today's drop in gold, give me a heads up. Seriously, while nothing goes straight up (or down), gold is in as much of a bull as you will see yet we have a correction. To an investor this is time to acquire more, as an option trader this is killing because now you have to have the underlying move back up all the while time is eating away at your premium. You may have the direction eventually but lose to time decay.
This is why over the years I have decided to trade the way I do. Still getting the leverage, while not too concerned about each and every tick. All the while collecting premiums from those that still think they can time the markets short swings. To them I say good luck and I will keep rooting for you. Meanwhile will you buy my options on the 5 min cross over?
Subscribe to:
Post Comments (Atom)
2 comments:
Dell,
What I've been doing is buying gold on the dips and wait for it to go up to sell the short month...basically legging in.
You taught me well.
Mike
Good for you, I am not sure I could trade that way but then there are many ways to do this.
Legging in and out is not my forte.
Post a Comment