macrocephalopod

There’s a big difference between selling when you’ve modeled a hefty perceived premium vs always doing it and assuming the buyer systematically ‘bad at math’.

ok, but isn't selling potentially better than buying the same thing with a negative premium. If your going to do one all the time, isn't selling the right one to chose, and then just size the amount you sell appropriately for your total portfolio?

Matt, a point that is more experiential than math even though you could just say pareto. There are many people with long track records of consistent profitability despite being long options. And their career p/ls are still dominated by a few months...

It's just that the times when being long those options are so insanely valuable that it's kinda hard to be like these things are overpriced. I could find many people skeptical of the backtests (maybe they don't respect intraday data enough) because we have seen the value of...

Being long options. Many of them are on here outright or lurking. I've been net long options for the bulk of my career (although often short time premium). Nobody knows what those tails are worth in a vacuum. But there are opportunities to load up at relatively attractive price

I think the tails probably ARE overpriced, but I'm long them all the time cos I have to be... Not least cos my expected returns are way higher when the market goes crazy and arb relationships break. So I want the most buying power then.

Yea this. You want the wing so you don't trade with a trapdoor beneath you. You wanna be in control of the wheel when the storm comes. Owning the tails when they finally pay makes up for the rest of the time (if you can survive til then and get your timing reasonably ok)...

The thing is you can get your timing ok if you have a team that can see everything.