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Stock/Option "trading", I mean, gambling

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Re: Stock/Option "trading", I mean, gambling

Postby betterchange » Wed May 13, 2020 3:40 pm

Hi wiserman,

Long time no chat - I remember we had a related conversation here quite a few years back. Amazing how time flies. It's interesting you say you still play some limited gambling games too, but with less of the old problems I presume.
I really think it's all about knowing yourself, and knowing your life outside of gambling too. If life is still a mess, then anyone's gambling is almost certain to be so too. I realise however that gambling addiction can also cause a mess in peoples lives, and for some it will never be an option like you say to stick to a new controlled form.
I'd also agree that none of us completely get over this addiction (or other addictions) even if we learn to control them. The fact that we have to control in the first place shows that. Normal (non-addicts) gamblers/drinkers etc don't need to control their behaviours. So, I'm not complacent even though I feel in so much a better place with most of my choices these days.
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Re: Stock/Option "trading", I mean, gambling

Postby 1wiserman » Wed May 13, 2020 4:56 pm

Hi betterchange,
Yes, I guess one man's "bad habit" or "entertainment" is another's addiction. I suppose it is all relative to being problematical. Got out of stock market 12 years ago and into CDs only. To me, the stock market is too hard for this little guy. If it was buy and hold probably would still be there. Between ultra fast trading, insider info, bad news, too many variables for me. I am not advocating controlled casino play, but for some it is a viable option just like drinking a beer once in a while can be as opposed to getting wasted all the time. Sometimes it takes a lot of hard knocks to understand the options and I have been to that school. People generally figure things out when they have had enough of the bad results of their behavior. I have seen people I know ruined by alcohol and drugs and many really crushed financially by gambling to understand there are consequences if you go on tilt with any of this stuff. Life is its ownself as Billy Clyde Puckett used to say in Goat Hills Texas. There aint no free lunch. LOL.
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Re: Stock/Option "trading", I mean, gambling

Postby curseofthecatwoman » Mon Sep 07, 2020 7:17 am

This is a very interesting topic that I can relate to. I started option trading in 1997; after finishing my thesis on the Black-Scholes Option Pricing model. I was over-confident and wanted to test my skills. Nevertheless; l lost my paycheck month over month and would lose more than I won. I ended up 1997 with a loss. For the next 10 years; I would lose money year over year. I didn't bother to invest in stocks; just option trades. I tried reading CNBC, Bloomberg and Marketwatch articles; charting stocks, following message boards, etc. None of this worked and I found myself neglecting relationships. Missed out on going on vacations, buying a new car, developing a relationship, marriage, starting a family. This is my biggest regret; not living life and focusing on option trading. My total loss over a 10 year period was probably $400,000.

In 2008; an option trade changed my life. Whether is is luck or fate; I made over $100,000 on Google calls. The underlying stock jumped 20% and my calls went up 8X. I closed my office door and took a deep breath; finally something is going right. I made the decision not to risk it all on the next trade and made a promise to finish the year in the green. I banked over 50% of my winnings and only risked 10 to 15% on a option position with the rest. Some of the trades where wins and some were losses. I ended up 2008 in the green and bought some stocks to have equity in my account.

From 2009 to present; I realized that option trading is a game of singles and once in a while you hit a home run. Also, I know that 40% of my trades will end up as losses. This took years to understand that you can't risk it all on any trade; no matter how confidant you are when you push the button. One bad streak can bankrupt you. During the 12 year period (2009 to 2020); I am fortunate to end up with 10 years of wins and 2 years of losses. The two losing years; I was not in a good state of mind (another lesson). I was working for over-bearing bosses who were insecure and always put you down - even when complimenting you. When I got a series of negative performance reviews; I took a three month break from trading - I was losing too many trades and stressed up. At this point; I realized that I may have a problem.

I started thinking about trading and missing the option action. I fought my urges and had some deep conversations with friends and all of them said; buying stocks and holding them for years is investing. When you buy a stock; you don't care about day to day; week to week or even month to month. You hold for it for years and you know it won't go to zero. Stocks go up in the long run. I didn't want to get wiped out by option trading so I turned off the feature in my account and just check on it once in a while. Long term stock portfolio only.

I decided to open up a new account and deposited around $8000 to trade options. The one I chose is popular with the young crowd and I wanted to feel young again so I began trading options on the platform. After twenty plus years; I admit that option trading is gambling. Somehow, my subconscious knew that.
Last edited by NewSunRising on Thu Sep 10, 2020 9:56 am, edited 1 time in total.
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