Larry’s new book Trading Options in Turbulent Markets
Based on his 25 year career as an options trader, Larry starts with some simple concepts and takes the reader through multiple option positions such as back spreads and ratio spreads. I learned a lot from this book and I’ve been dealing with options throughout my career. This book is very well written and will make a great textbook for an aspiring options trader – a great reference book – a keeper.
Some items that are especially juicy:
– probabilities don’t matter with options
– where and how novices get killed (things to avoid)
– how pros make an asset class out of theta (things to do)
– misconceptions about cheap options
Total length is about 25:34.
Hi Michael, I will definitely buy his book since he seems to really know what he is talking about, but it bothers me to hear him saying that “propability doesn´t matter”. I think that probability always matters a great deal in trading, however I think he might be refering to the diference between High Probability vs High Expectancy trades, as any trend follower would do, as George Soros would say: “The important thing is not how many times you win or lose, but how much you make when you win and how much you make when you lose. What are your thoughts about it? Do you also think he is avocating to lean towards buying options (like Taleb)?
I asked him directly about probability, and I think what he was getting
at is that if you have a 1/10,000 chance of losing an infinite amount of
money, then probabilities go out the window for that trade. He was
coming from managing the equity in your account and avoiding the risk of
ruin at all costs.
I believe Taleb sold options in his past to pay for the bleeding, but he
was most likely hedged. To my knowledge, Taleb is done trading as is an
Advisor to Universa.