tag:blogger.com,1999:blog-67884709739666931242011-04-21T12:53:03.072-07:00OPTIONS BLOGA community resource for exchanging info and ideas about trading stock options.S B Campbellhttp://www.blogger.com/profile/12573971852184620867noreply@blogger.comBlogger11100tag:blogger.com,1999:blog-6788470973966693124.post-67761139598518837362011-03-26T08:47:00.000-07:002011-03-26T08:47:05.409-07:00Well. as an intro to this blog let us say tha I sell options. I don't buy them.A stock can only go up, down, or remain about the same. The probabilities are about equal. that is 1/3 in each direction. Then it will either reach the options strike or it won't.<br />That is the buyer has 1/3*.5 = .17 of being successful<br />The seller has 1.0 - .17 = .83 chance of being successful.<br />If the underlying is trending that alters the picture. Suppose the trend is up & the last year's evidence was .90 up<br />and .10 down. Now we have ,9 * .5= .45 of reaching the call strike and only .1 * .5 = .05 of reaching the put strike.<br /><br />That's enough food for thought for new.<br />Any interested members are welcome to to post tid-bits, ask questions or contribute. I'm logging off and going for a drink.<div class="blogger-post-footer"><img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/6788470973966693124-6776113959851883736?l=sbcampbell.blogspot.com' alt='' /></div>S B Campbellhttp://www.blogger.com/profile/12573971852184620867noreply@blogger.com0