Submitted by Aimadness t3_124al2j in wallstreetbets
To all the successful options traders what is the measure to be considered an above average trader? I have been trading for 3 years. I spent 2 years getting destroyed, a lot. Somehow adapted and now I am having some sucess. I feel like a king. I really have no idea of what above average results look like. I am interested in someone starting off with 500 to 1000. I did this 3 times. Currently I place 5-14 different strategies (?) a week.
Not above average. More successful than 80 to 90% of traders.
Nice, ty
Consider this...no billionaires have ever been created by strictly trading options. Options are a tool to use as part of a larger financial strategy. The long term outcome of purely option trading ends in you fighting other degens for space next to a Wendy's dumpster.
Shhh tell ‘em about the potential on a 50% OTM 0dte though
From a start of 1k, only need to be right on a full yolo 34 times with a 50 % return, copium
The rise in 0DTE contracts may soon see its first options billionaire.
We just need that black swan circuit breaking -20-25% day ofc.
Annnny day now.
when you say "the rise in 0DTE contracts"
do you mean like "with 0DTEs becoming more popular..."? or do you mean "since 0DTEs are somewhat still a relatively new strategy that retail investors can use..."
I've only been trading em for 3 years and was under the impression ppl have been doing it longer than i
Lol no, they came recently. I know in 2008 there used to be just monthlies.... Today around 50% of the trading happens in 0DTE. Also, daily options are not counted in VIX so vix is artificially suppressed even after so much volatility.
A tool, nice
Jim Simons would disagree.
Simons, and Renaissance in general, does not rely on purely option trading.
Wasn't Carl Icahn an options traders when he was young. If I remember right he did very well and then lost it all lol.
There wasn’t anything like 0DTE when he was young.
He probably hedged his portfolio with long dated puts and sold covered calls, the usual thing to do with options.
Oh yeah, he definitely didn't buy 0DTE haha.
It’s like a rollercoaster still, just reaaaaaaaally slow and going uphill instead of downhill
Pure adrenaline
Haha he said that he lost it all thought, so I guess he took a good trip downhill at some point. Reminded me of myself when he said that.
Didnt bill huang trade options a fuckton? Granted he did lose hes billions again.
I'm sure he did use options here and there, but it was the overuse of leverage that blew him up. The smart use of options as part of a hedging strategy might have saved him.
I lost 3 k bc I lost cell service for 6 min while going around a very small mountain.
everyone knows the first rule of trading 0dtes is "whenever youre ready to take profits.. make sure you are in your car driving"
I’m not that sophisticated. One day perhaps…
You got this! Here’s a pro tip- if you’re ever lost in the woods and looking for cell service…go to the top of the mountain and not around it. But don’t sweat it dude, some people probably have paid way more than $3,000 to learn that if you want to use the internet then you need the internet.
I do that too lmao
Expensive trip...lol
I hope he enjoyed his trip ??
I don’t leave the screen when option trading
Did you not set up a limit buy/sell order
I am not that Sophisticated. This was one of the big moments where I knew I was good enough to find the value but I sucked at execution. I alllowed this pain to sink in deep. I continually reminded myself how I could have used that money or if I had it I could xyz, I used it as fuel. It took another 3-4 months before I could find or identify when I should contemplate exiting a trade, and to justify it with reason or logic or whatever. I still could not exit at the best time or anywhere close to it. I still lost but was no longer bleeding.
At this time I was deep in therapy for an injury that fucked me up. I went through CBT and it dramatically changed my life. I started taking care of myself and a year later things started changing and I started making better choices and was growing my ability to exercise discipline. Since then things have been better. Sure I may still suck but I’m making better decisions, using less money to make more consistently and love trying to find the value.
100% chance you don’t know how to trade and are lucky. Losing 3K that quickly means you are gambling and not treading. Theta gang thanks you for your money.
1v1me
I don’t gamble at the fucking casino son. I am the fucking casino. I always win. I use only theta gang with wheel strategies on companies I like.
You seem trustworthy. 1v1me
-100% every trade
Buy high.
Never sell.
​
This is the way.
So let's put it like that. The most successful trading company ever lead by Jim Simons and a bunch of actually very very smart people could produce a reliable 50.75% win rate and made insane returns with that. Everyone else is extremely likely way worse. Don't ever think it's anything but a casino if you're trading.
Your best bet is actually finding some arbitrage opportunity in a niche which are the only "traders" that are actually successful and pray it never goes away.
I like extracting value, wherever I find it. .75 was all it took. How? Volume?
>As described by Zuckerman, Medallion’s strategy involved constantly opening and covering thousands of short-term positions, both long and short. According to Robert Mercer, one of Medallion’s key investment managers, Medallion was right on only about 50.75% of its trades. Nonetheless, he stated that taken over millions of trades that percentage allowed the firm to make billions. It is worth noting that engaging in millions of trades suggests that the transaction costs would be significant. The fact that the reported gross returns are after trading costs, makes Medallion’s performance even more extraordinary. It also implies that Renaissance was apparently particularly effective in minimizing such costs.
If you can actually reliable make 50.75% of your trades successful all it takes is making enough trades and reducing costs. The moral of the story is anyone who talks about a 50.80%+ success rate is lying to you. I would go even further and even say the ones talking about a 50%+ success rate are probably lying.
I don’t know much, but if you can reliably bag a net 10% return annually you’re essentially winning big.
That's buying the S&P 500 over the long term. Trading is about being successful on trades and scaling it with volume. If you trade to get the S&P 500 return stop trading brother and become a long term investor.
My bad, thought it was slightly lower than 10. My point was reliably beating S&P would be a win.
>The historical average yearly return of the S&P 500 is 10.326% over the last 20 years, as of the end of February 2023.
>
>The average annualized return since its inception in 1928 through Dec. 31, 2022, is 9.82%.
No problem here are the actual returns.
I have done this
It depends. Are you a day trader exclusively? Or can you see macro positions and trends. Are you a Micheal Burry type, or a bunny hoping from position to position.
My biggest trades this year: Southwest airlines after the Christmas screw up, SLV run up after one year beat down, and Nortfork Southern derailment.
It took me 25 years to see this trades develop. Now it's like looking at the obvious. Trade on osmosis.
Everybody has a different style. 500 trades a year, or only 10. Find your lane and crush it. Nobody really cares..so just get better each day. Enjoy the ride.
That’s awesome. I think I see it. I use available information to understand as best I can then find a way ,hopefully to extract value. It is an amazing puzzle. Even when I lose or miss I still enjoy the puzzle.
I don’t day trade. When I want to I get the warning and then wait until the appropriate amount of time. I would love to make and execute a trade every time is saw one.
Be patient. There's a hundred life changing trades every year. It's been that way since the early 1990's since I've been trading.
Keep building your skills. Enjoy the ride. It's a puzzle that's only available to the few who can "see the pieces".
You have a gift..most people don't have. Trust me.
What options strategies do you use?
Coach me
I thought you traded futures for insane returns? Not that penny stock called Southwest Airlines
The pilots union at Southwest was not backing down on the company mandate to receive the COVID vaccine. It was well researched and pretty simple thesis. The company needed humans to fly their planes and 60% of the pilots said..nope.
I just got lucky on the Christmas computer cancelation and delay fiasco that dovetailed into the position.
Rather be lucky than good.
Wow
I want 300% daily returns.
Above average is when you can stop after 3 trades because the 4th one is always a loss, always.
Sucessful option trading? Is that possible?
People actually make money doing this? I thought it was just to gamble
Yes on both accounts.
The only sure one is breaking even. If your profiting, you are better than the average. Most fail.
>There is no definitive answer to this question, as success in options trading depends on a variety of factors. However, some measures that could be used to gauge whether or not someone is an above average trader include the following:
-The percentage of successful trades relative to total trades made -The profitability of each trade on average -The ability to consistently generate profits over time
Thank you
What is your "Strategy"? I am a member of /r/Options and /r/Thetagang are you buying lotto tix or selling?
(I sell CC and CSP, my returns are pretty good)
Anything better than -100%
-1% weekly
I dunno, I think I usually get 5 cents for returning cans
You think?
Anything better than -100%
>The salaries of Options Traders in the US range from $29,313 to $791,198 , with a median salary of $141,954
Sounds about right to me.
0% is very good.
-100%
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10000%
What kind of options are you trading? It’s all relative. If you’re strictly buying OTM puts and calls, you’re all but guaranteed to lose money over time.
I think it is called naked call or puts. I purchase other a bunch of calls or outs. Nothing else.
An option can either be in the money (ITM) or out of the money (OTM) which refers to the strike price of the option in relation to the market price of the stock.
Naked refers to writing call options without owning the underlying or writing put options without being cash secured. Selling naked options exposes you to unlimited risk.
If you are buying options, they aren’t naked since your max loss is your premium.
If the options you buy have low premiums, they are likely OTM. Do you pay attention to Delta, Theta, Gamma, and Vega when you look at options? If you aren’t using the Greeks or looking at ITM/OTM, whatever run that you’re currently on is unsustainable.
I do this. I don’t completely understand the language I need to explain it. But I’m understanding itm otm and the implications with the Greeks (somewhat). I will look into this more.
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The big drop was cause I stupidly opened a spread while flying and the internet went out and when it came up I was way down.
15% is a win
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I trade spxs weekly. I usually shift what contracts (and which way they go) at least once a week. Try to be out by the morning on Fridays. Think I’m on 7 weeks strait of profitability. I expect 40%-100% returns usually, but on the big fed days it’s been turning into 200%-400%. Very small account. Just trying to catch the trend changes and riding the waves. Almost no actual day trades. I pick the moves the day before and shift on the fly.
This is reasonable, I have seen this.
I would say, being down only 50% for the year makes you a successful options trader...
-50
That’s a lot of trades in a week.
If you are green are better than average
Looks negative
Bet
-90% to post on WSB
From experience and talking with friends, those committed to buying options generally have a return of -99.7%.
Those that sell options generally make a few % more than what the market returns
Lose everything
+0
Well, hardyrekshin here on WSB claims a ~65% win rate with his daily wrinkle plays posted here. However backtesting his 0317 plays shows win rate closer to 40%. Still green overall at expiry, though so there we some big winners.
Wut?
I started with 1k, dogecoin popping got me to 1.5k, Embraer got me to 7k, a mix mash of options got me to 18k, Activision got me to 8k before announcing Microsoft was going to purchase, got me to 42k in a morning. From there I thought I was a genius, pulled 20k out, lost 17k on Adobe, Ford, other options... Was down to about 4k in the pot at the beginning of this year, now I'm at 9.6k.
I'd never say I'm successful. With confidence. I'm up and was able to pull some money out. Successful? Yes, I didn't lose. Yet.
Wow,
8%
Rate of return will vary greatly depending on your trade style and account size. I don't know what the benchmark is, but I personally consider 1% monthly growth to be very manageable with short options, not including any other income like dividends and interest on currency positions.
Can you please laborate on the term benchmark?
Benchmark in the sense what is a common baseline to compare with, e.g. most people use the yearly average S&P500 returns, or maybe the ytd return. Some people are happy when they beat the SPX even if they are still in the red.
Middle_Name-Danger t1_jdykrov wrote
If you’re not in the red, you’re above average