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At Thu, 19 Jul 2001 14:25:11 -0500, Brian Eckert <bjeckert@xxxxxxxxxx> wrote:
>>I attended the Optionetis workshop this week. A few of you expressed
>>interest in what I thought of it.
I noticed that John Lothian asked you whether the "results" of some strategies presented at the workshop were hypothetical or actual. Did you reply to his question?
Many of the current options "strategies" taught by various options gurus are based on Black-Scholes notions of "volatility". I suggest caution in applying such option price "models". Stated simply, the assumption of Gaussian distribution of price changes is incorrect. Thus, the Black-Scholes model is simply bogus. (The more accurate price change distribution, with its infinite "fat tails", negates Black-Scholes as a valid model.)
For a more complete discussion of this, see "Nonlinear Pricing", by Christopher May.
The effect of applying the Black-Scholes assumption in practice is illustrated by the Long-Term Capital Management fiasco. Scholes and Merton (Black is deceased) used the Black-Scholes assumptions at LTCM. Read "When Genius Failed", a book recently mentioned on this list, for more on this.
Be careful out there...
Good trading,
OM
At Thu, 19 Jul 2001 14:25:11 -0500, Brian Eckert <bjeckert@xxxxxxxxxx> wrote:
>I attended the Optionetis workshop this week. A few of you expressed
>interest in what I thought of it.
>
>They present a good, clear explanation of how to make low risk, high-reward
>options trades. The trades are categorized, the risks are explained, they
>teach you the exact way to place the order, etc.
>
>I have not started to trade using these techniques, but I am
>encouraged. Their "calendar spread" technique averaged a 300% return on
>equity last year.
>
>I was bothered by one thing. Throughout the seminar, they pitched their
>other seminars, web site, newsletters, etc. I would have been a bit more
>comfortable if the seminar came with a 4 week free subscription to their
>news letter.
>
>A friend of mine attended. He recently purchased OptionVue. In looking at
>the "platinum" service of their web site, he said that he would have
>preferred using it to OoptionVue.
>
>You may also be wondering if I think George is honest, i.e., does he use
>these techniques in his trading, or he is just hawking a system for the
>sake of the money he can raise from these workshops. I think he really
>trades them.
>
>Hope this helps.
>
>I'll let you know what success I have when I begin trading options.
>
>
>
At Thu, 19 Jul 2001 14:25:11 -0500, Brian Eckert <bjeckert@xxxxxxxxxx> wrote:
>I attended the Optionetis workshop this week. A few of you expressed
>interest in what I thought of it.
>
>They present a good, clear explanation of how to make low risk, high-reward
>options trades. The trades are categorized, the risks are explained, they
>teach you the exact way to place the order, etc.
>
>I have not started to trade using these techniques, but I am
>encouraged. Their "calendar spread" technique averaged a 300% return on
>equity last year.
>
>I was bothered by one thing. Throughout the seminar, they pitched their
>other seminars, web site, newsletters, etc. I would have been a bit more
>comfortable if the seminar came with a 4 week free subscription to their
>news letter.
>
>A friend of mine attended. He recently purchased OptionVue. In looking at
>the "platinum" service of their web site, he said that he would have
>preferred using it to OoptionVue.
>
>You may also be wondering if I think George is honest, i.e., does he use
>these techniques in his trading, or he is just hawking a system for the
>sake of the money he can raise from these workshops. I think he really
>trades them.
>
>Hope this helps.
>
>I'll let you know what success I have when I begin trading options.
>
>
>
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