macrocephalopod

18/ It shows you that the trades (i.e. the actions you take) are important but secondary. The thing that matters most is the position. You get paid not for the trade, but rather for the position you hold. “What should my position be?” is the most important question to ask.

19/ So that’s where I want to stop for today. Trading is misnamed. It should be called positioning. I’ll come back tomorrow with some interesting things that follow from this shift in perspective.

When I pitch I get questions like “what is your average holding period” or “how many trades do you have on at once”. Obviously I could calculate this, but it’s not how I think. My book is not a collection of trades, it’s a collection of *positions*. The trades are incidental.

Exactly This was a good thread bc I took for granted that positioning was the only way to look at trades. We always just think in terms of "just throw it on the pile" not individual trades

I did too, until I started talking to more people who didn't necessarily get the training we received.

guessing people would find it useful if they saw how option traders collapse/summarize positions and chunk exposures into butterflies and verticals then manage the residuals

i mentally summarize when i look at a position by option structures (probably similar to how a chess player would group familiar themes). It gives me a fast understanding of a position and the holes