"trader" is a uselessly broad term
Biotech Sizing - Accept Individual Losses
You have to accept you’re going to get a 10SD loss. You can’t expect to do that risk-reward thing on one stock... You have to do that over a whole bunch of stocks and say on average, if I do this on a 100 stocks, I’m not going to get a 10s.
You have to accept you’re going to get a 10SD loss. You can’t expect to do that risk-reward thing on one stock... You have to do that over a whole bunch of stocks and say on average, if I do this on a 100 stocks, I’m not going to get a 10s.
Kris Abdelmessih • "trader" is a uselessly broad term
Position Sizing and the Yield Hunting Trap
People decide they want to make a certain amount. You can’t make a certain amount. You can only make what the market’s giving you... If you go basically yield hunting and try to make the same amount of money each time, you are going to blow up. I guarantee it.
People decide they want to make a certain amount. You can’t make a certain amount. You can only make what the market’s giving you... If you go basically yield hunting and try to make the same amount of money each time, you are going to blow up. I guarantee it.
Kris Abdelmessih • "trader" is a uselessly broad term
Zero DTE Warning
Don’t trade zero DTE... The amount of money you can make is pretty small because the premiums are pretty low and the costs relative to the amount of money you can make are huge
Don’t trade zero DTE... The amount of money you can make is pretty small because the premiums are pretty low and the costs relative to the amount of money you can make are huge
Kris Abdelmessih • "trader" is a uselessly broad term
Transaction Costs
With trading, you become a better trader by taking your hands off the keyboard and letting things play out because every time you touch the keyboard, it costs you money... You might make 5,000, but whether you make 5,000 or lose 5,000, you’ve got that 50 bucks always. And it adds up.
With trading, you become a better trader by taking your hands off the keyboard and letting things play out because every time you touch the keyboard, it costs you money... You might make 5,000, but whether you make 5,000 or lose 5,000, you’ve got that 50 bucks always. And it adds up.
"trader" is a uselessly broad term
Risk Management - Small Losses vs. Catastrophic Risk
Retail is too averse to small risks and leave themselves open to catastrophic risks... [Professionals] don’t think of losing a million dollars in a day as a risk. That’s just what happens if you’re tossing a coin.
Retail is too averse to small risks and leave themselves open to catastrophic risks... [Professionals] don’t think of losing a million dollars in a day as a risk. That’s just what happens if you’re tossing a coin.
"trader" is a uselessly broad term
Hedging
If you go to a firm like a Jane Street or a SIG, their idea of hedging isn’t so they don’t lose money. Their idea of hedging is so they take away all the risks that they don’t want so they can isolate the exposure to the one thing they do want.
If you go to a firm like a Jane Street or a SIG, their idea of hedging isn’t so they don’t lose money. Their idea of hedging is so they take away all the risks that they don’t want so they can isolate the exposure to the one thing they do want.
"trader" is a uselessly broad term
Event Premium - Earnings and Announcements
Selling options right before earnings is a good trade. Selling biotech options right before FDA announcements is the same thing... Whenever there’s an event and you don’t know what the outcome’s going to be, but you know when the event is, sell V.
Selling options right before earnings is a good trade. Selling biotech options right before FDA announcements is the same thing... Whenever there’s an event and you don’t know what the outcome’s going to be, but you know when the event is, sell V.
Kris Abdelmessih • "trader" is a uselessly broad term
Volatility Rank vs. Variance Premium
If you’re just looking at the vol of a single stock through time, selling it when its vol gets high is usually the wrong way round... Usually implied vol is understating, you know, implied vol might do this when the realized V is doing that.
If you’re just looking at the vol of a single stock through time, selling it when its vol gets high is usually the wrong way round... Usually implied vol is understating, you know, implied vol might do this when the realized V is doing that.