Jan

25

A Market Song, from Jeff Watson

January 25, 2013 |

We used to sing variants of this song at different times on the floor
depending on the conditions of the market and/or our level of boredom:

(To the tune of Camptown Races)

Puts and calls will break your balls, doo dah, doo dah
Puts and calls will bust your balls oh doo dah dey
Sell a naked call,
Sell a naked put,
Ground up balls is what you'll get, oh doo dah dey.

Puts and calls are highly rigged, doo dah, doo dah
Puts and calls have a lot of vig, oh doo dah dey
Time decay aside, straddles all the way,
Options will really rip your balls, oh doo dah dey.

Strangles and straddles will choke you dead, doo dah, doo dah
and strangles and straddles will smash your head, oh doo dah dey,'
Sell a put today, die another day
the only one who does OK, is the guy saying you made a good trade today.

Black Scholes was the holy grail, doo dah, doo da
Black Scholes is is the sucker's game, oh doo dah dey
Sell a call at night.
Buy a put at day,
Whatever you do, it will sure be wrong, so oh doo dah dey.

Options are a suckers game doo dah, doo dah,
Options take your money away, oh doo dah dey,
But your balls at night,
Bust your balls at day,
The premiums you pay, make someone;s day, oh doo dah dey.

Now today you will fail big time, doo dah, doo dah
Listen to the touts, they will lead you astray. Oh doo dah dey
But since it's only money, and you;ll soon be so broke
just sing this song and get along as you and the money will soon part ways.


Comments

Name

Email

Website

Speak your mind

1 Comment so far

  1. Cyriac Kandathil on June 16, 2018 4:29 am

    Buying calls and puts is a directional strategy. Most often the seller of the options is smarter than you. Even if both have the same skills you have only 50% of chance to win. For every trade you win or lose, you pay brokerage and other charges. Therefore buying calls and puts will make you lose in the long run. Seling calls and puts naked has unlimited risks. Seling far out of the money calls and puts will give small returns for a while. Once in a while, you will be hit badly and lose your capital. Long straddles and strangles need major movements to make a profit. They too are losing strategies. Short straddles and straggles have unlimited risks and you will be hit once in a while. Thus the song is right. But there other strategies that have lesser risks and better returns. Covered calls and covered puts are two such strategies. Similarly, Short Iron butterflies and Short iron condors are good strategies with limited loss and good chances of returns. There are many strategies like them. But, most often a trader has no patience or capacity to understand or execute them

Archives

Resources & Links

Search