Traders who are firm believers of Technical Analysis and try to trade Greeks of Options, they feel option trading is a science. They try to derive a formula so that they come out winners every time.
Traders who trade on hope think option trading is an art. They “Feel and Trade”.
As it is obvious they both lose money.
No one can predict what is the future option Greek for a given option. Neither can anyone predict what premium the option will have in 2-3 days time. This is the reason most option traders who trade on hope or who trade trying to manage Greeks lose money.
One of the biggest losers are the Delta Hedging traders. This sounds so technical that traders get attracted to it.
In US Delta Hedging is automated. It is done my software perfect to manage Delta of options. The trades are so fast that humans will not be able to manage it. Within milliseconds an option is bought and sold which is impossible to be done by humans.
On top of that the automated system keeps a check on Delta of every option strike of that stock or Indices. As soon as the Delta is breached, it gets out of one position and gets into another in less than half a second.
However these are done by high net worth individuals or finance institutions. It takes millions to make a automated system to trade.
Since it is out of reach for retail traders they should trade with a proper plan, else there can be losses and it may continue for years.
Trading on hope is self-explanatory. Another great way to lose money trading the stock markets.
So who makes money? Trades who trade with a plan. Without planning you cannot manage your finances so how can you win trading options?
Want to learn how to trade with a plan? You can do my make monthly income from options course. Traders who have done it are doing well today. They were losers before doing my course. For any questions contact me.
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