Daily Speculations

 

Overlay, Play!!!

 

 

By Ed Gross

6/24/2003

 

        Normally don't like to announce victories, at the risk of coming across as a bragger, but I just beat the biggest game at the biggest poker room in the world this weekend, at my best poker game, Texas Hold'em, limit, so I thought I'd share part of the lesson that I think got me there, as it applies to trading.

 

Overlay, play, no overlay, well....

 

To win it can help to have lost, and then to despise the feeling.  I played in the big game before and lost. Why talk of poker overlay, and how does it apply to trading????

 

Well, when I used to trade stock options, there where times when the action was well almost gluttonously scrumptious, and then often these times would be followed by a painful drought.  Some traders stood with strong resolve, adjusting the interest rates in their models, fine-tuning their assumptions on volatility in their model, and then on a dragging slow day might even whip out their sheets and double-check trades and position inputs.

 

Other traders chose to laugh and giggle, or play distracting games and pranks, some even said that they'd buy some of this option or that, or maybe even put on a “delta’ or a sports bet with a buddy to entertain themselves, heck some went and had a puff of cannabis or a drink.

 

I bet you can guess which traders stayed in business and which traders lost. Why? They chose to just play, didn't want or have the patience to wait for an overlay.

 

 

So, I recall the pro who asked me a couple weeks ago if I had a twin high-stakes brother, when he saw me at the smaller stakes table, and I just laughed and said how ya doin’??

 

That weekend I made the same amount that I did this weekend, why, because the overlay was huge in the smaller game that weekend, and I was close to break-even in the big game, maybe a slight favorite, but just as likely a slight dog, so I chose not to play.  Edge times volume equals profit.  It feels good to be the winner at the biggest stakes table, it even cheered me up (had a rough personal week) when strangers came up to me and said what a big game you guys are playing, wow!  And, seeing people looking at the stack of chips that I had felt as I imagine a little Prozac might too, but next week if the top players in the world decide to join the big game you won't see me there, if the overlay is in the 5/10 table that's where I'll be, laugh if you want, but I am happy playing my way, if others wish to take a "stab at the moon," or “play ‘just for fun,’” that's their prerogative, and it is fun when a beautiful lady looks at you in amazement when you’re playing in the big game with the most chips at the table in front of you, but I am fine playing the way I like to play, heck, the shirt I am wearing that I bought from making a few small profits

feels good overlaying me and well after last weekend the shirt isn't the only thing that will subside the laughter, I think next time I might get a few more respectful nods even if I do chose to play in a smaller game.

 

Back to trading. There were times when there were only a few small trades that I knew had edge, and so I played, but then people laughed when sometimes I would pass on the biggest trade of the day. They'd even look at me as if to say, how much did you make last month, and since I know you did why the heck are you “pussin’ out” on this trade??   Well, I left with the chips that year, and when no one was looking, I thanked god for the strength to fight victoriously as I looked at the Statue of Liberty by the then-still-standing-triumphantly World Trade Center, thinking back on the moment it felt how I imagine scoring a big goal in a big soccer match might feel, and makes me want to scream O' LAY!!!!!

 

P.S. Thanks Vic, Laurel, Brett, Lack, Mr. E, Yale, and everyone else whose list input helped me get to where I got this past weekend and otherwise positively.