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RE: 7/31/17 Follow along as @alexmorris and I try to save J.C.Penney (JCP) from Jeff Bozo and Amazon

in #jcp7 years ago (edited)

Oh, as far as options go, the reason 99% of all people lose trading them is becuz they enter a call option (buy) before a price target that is lower than where they bought which still needs to get taken actually does get taken out. Until the low actually is breached it is "unlikely" that a strong rally can begin. So as the price moves down to take out the number below that needs to be taken out (while they hold their call option)... they lose $$$ as the time premium of their option deteriorates. So it is the Ty Ming of options trades that create the losses. And that can be rectumfied by making sure you do not enter your call option unless prices below that need to get taken out in fact DO get taken out. Or if entering a put option, a high price above that needs to get taken out will prove fatal to your put option if you enter it before that event actually occurs. UVXY is a good example, people "likely" getting excited about piling into the VIX and VIX derivative trades via call options right now becuz they "think" there is still a shitload of downside left in the markets. But you and I both "know" that UVXY is coming all the way back to set a new low. There is still "likely" a bit more upside in the sexy VIXens. But if you enter an out of the money call option for say Sept expiry...you may just as well flush your money down the toilet becuz the result will be exactly the same.