Design a guaranteed losing trade - Page 2 - Business, Finances and Investing Forum

This is a good idea. I wonder what the lowest % is here where you are guaranteed to lose? For example, there is absolutely zero chance the market will be 5% higher by Friday. There is nothing that could possibly happen that would make the make market move up 5% that quickly in this environment. Yet there is plenty that could move it down 5%, if not that often.

Quote

08-01-2017 , 07:59 AM

#27

mrbaseball

Carpal \'Tunnel

Join Date: Feb 2003 Posts: 13,090

Quote:

Originally Posted by ToothSayer

This opportunity likely doesn't exist. The first SPY call offered at .01 for this Friday is the 252 call which is only a little over 2% move. Only way to buy the 100% move call would be to massively overpay. But if the 100% move call is the first offered at .01 there will be a volatility event like nothing ever seen before.

Quote

08-01-2017 , 03:37 PM

#28

wheatrich

Carpal \'Tunnel

Join Date: Sep 2005 Posts: 21,239

there's plenty of stocks that seem like no brainers here

ie, buy sears and hold on to it

Quote

08-02-2017 , 12:28 PM

#29

Mr. Small Blind

enthusiast

Join Date: Mar 2017 Posts: 96

Ive found stop loss triggers to be losers a high percentage of the time.

OTM calls/puts not so much.

Quote

08-03-2017 , 11:55 AM

#30

jukofyork

Carpal \'Tunnel

Join Date: Sep 2004 Posts: 11,749

Quote:

Originally Posted by ToothSayer

A question from this: how can you possibly design a losing trade if the efficient market hypothesis is true? At any moment, under the EMH, the instrument is correctly priced. Be interesting to hear this explained.

It's still efficient if an edge can't be exploited because it becomes -EV after commission and/or spread is taken into account (for example: "Overnight Long/Intraday Short Gold Fund" - sorry can't find the page where somebody reran it with commission and/or spread included).

There are also many arbing edges that nobody can afford to exploit after you factor in other costs, so in these cases one (or both) of the prices must technically be wrong.

Juk

Quote

08-03-2017 , 12:56 PM

#31

Sokz

old hand

Join Date: Feb 2012 Posts: 1,331

Long 4x levered SP500 ETF.

Quote

08-03-2017 , 01:43 PM

#32

ibavly

2010 PSOP Champion

Join Date: Feb 2010 Posts: 24,513

Quote:

Originally Posted by Sokz

Long 4x levered SP500 ETF.

Assuming 0 fees as in the OP this is close to historically optimal

Quote

08-03-2017 , 02:40 PM

#33

rand

Pooh-Bah

Join Date: Feb 2007 Posts: 4,137

Are we still playing this game?

This one might be cheating buy a limit order to go long at the ask and a OTO (one triggers other) contingent order to go flat at the bid. You pay the spread, not sure if its 100% guaranteed (but its pretty damn close).

Long a levered ETF and long the appropriate amount of puts on the same ETF. Either way you have decay.

Quote

08-03-2017 , 03:29 PM

#34

Sokz

old hand

Join Date: Feb 2012 Posts: 1,331

Quote:

Originally Posted by ibavly

Assuming 0 fees as in the OP this is close to historically optimal

Hmm remember another chart. :P Is this when stopped out at 0?

Quote

Page 2 of 2

First

1 2

Last

Post Reply Subscribe

...

Page 2 of 2

First

1 2

Last