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BS"D
D. I'll join the 90% list.
Never gave much credence to the potency of the "fact". Always assumed that the "long options universe" is populated by a wide variety of traders, from volatility traders, to speculators and gamblers buying fistsfull of cheap (generally worthless) options, to hedgers of all sorts buying term insurance policies (i.e. intentionally held until expiration and then, often, "renewal"), protecting a futures position, and . . .
Even if it's true that 90% of all options die worthless, so what?
Asher
A.>As far as I can tell...the 90% comes from two areas.
>1. The fact that 90% of options go unexercised...this is factually correct. The
B.>> People love to throw out 90% numbers when it comes to derivatives. They
>> are almost always not based on fact. The common assumption is that 90%
>> of options expire worthless. That is also a fiction. 30% of options
>> expire worthless
Sound of throat clearing.
C.>> Does anyone out there know where this scary 90% (of options expiring
>> worthless) figure came from,
>> Just curious,
NIce thread!
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