What is a reasonable expectation of rate of return?

Mike Thompson ‏ @mjtco: teaching self options trading strategies (weekly-swing time frame) – what is reasonable expectation of rate of return?

ANSWER:

Your expected rate of return is negative 100%. You are going to lose all of your money. Fist off:

A) Every CEO lies about their company. So strike one.

B) Ever bank lies about the companies they cover. Strike two.

C) Every stock is manipulated by various parties that have huge amounts of money at stake. Strike three.

D) Options are further manipulated by hedge funds because they are less liquid and any move in options will create a corresponding move in stocks because of automated arbitrage strategies. So Strike four.

But in baseball, it’s three strikes and you’re out. Here you have four strikes. Maybe there’s even more strikes I’m not thinking of. Like most option experts at banks have PhDs in Math. Strike five.

Ok, now you’re out. Negative 100 percent.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: