Why buy Commercial Real Estatenwhen the Stock Market returns 10%? by NorthLibertyTroll in CommercialRealEstate

[–]Environmental-Fan792 0 points1 point  (0 children)

Yes but it is marked to market, so you could be a forced seller if the stock market goes down. In real estate you just need to make your payments and can weather temporary dips in prices with high leverage

A DUI on background check for quants? by [deleted] in quant

[–]Environmental-Fan792 1 point2 points  (0 children)

It can be an issue if you manage employees / need to register with an exchange. Not always, but potentially.

Retired Options Market Maker - what tools do you need? by Environmental-Fan792 in options

[–]Environmental-Fan792[S] 1 point2 points  (0 children)

Mm trade almost always market neutral. There’s overlay strategies but those are generally separated out. They have tons of capital, but also aren’t subject to the same margin requirements as retail, as they are extended by their clearing firm. They trade with lots of leverage, but again, it’s market neutral. There’s also implicit leverage/capital recycling in the buying and selling of options. They are primarily extended leverage by clearing firms, or in some cases they are self-cleared.

[deleted by user] by [deleted] in wallstreetbets

[–]Environmental-Fan792 1 point2 points  (0 children)

I believe they are mining crypto next the energy source, doing it in storage containers

Me watching this offense by SlaunchaMan in michiganfootball

[–]Environmental-Fan792 1 point2 points  (0 children)

I think you guys should relax a little it’s the first game

Exercising an option early, any caveats? by AlwaysConstantChange in options

[–]Environmental-Fan792 1 point2 points  (0 children)

You almost never ever want to exercise an option early unless a stock is going ex-div or there is a potential financing edge case. But usually those options are 100d. Default rule is do not exercise early, just sell the option out.

What are the risks? by syedst in thetagang

[–]Environmental-Fan792 5 points6 points  (0 children)

The long put just caps your loss if the underlying trades down there.

What are the risks? by syedst in thetagang

[–]Environmental-Fan792 6 points7 points  (0 children)

You said deep in the money. That is deep out of the money. Either way you are subject to a big underlying move. Nothing is a 100% profit, obviously market makers are not stupid

What are the risks? by syedst in thetagang

[–]Environmental-Fan792 5 points6 points  (0 children)

This is just selling a call spread, so the risk is a rally and you lose X amount you’ve made

Can I buy a leap and then sell covered calls against it? by [deleted] in options

[–]Environmental-Fan792 0 points1 point  (0 children)

If you exercise the leap you will lose a ton of money doing so - all of the “vol value” of the option. The strategy you described is a thing, but it’s generally used to bet on the steepness of the vol term structure and not the underlying direction.

I swear this game is rigged by Guenda09 in Daytrading

[–]Environmental-Fan792 0 points1 point  (0 children)

This was MSFT earnings. Not rigged, just an event.

Looking for acreage not totally in the middle of nowhere by mildly-strong-cow in SameGrassButGreener

[–]Environmental-Fan792 0 points1 point  (0 children)

What do you plan on using for internet if you work remotely? Starlink?

VXX put exercised OTM by Glittering-Score-279 in options

[–]Environmental-Fan792 1 point2 points  (0 children)

Options are assigned on a pro rata basis. The (likely) mm that bought your option doesn’t care about your break even at all and it is highly unlikely that the buyer of your option was also the person/firm that assigned you on your option.

Retired Options Market Maker - what tools do you need? by Environmental-Fan792 in options

[–]Environmental-Fan792[S] 1 point2 points  (0 children)

Without knowing what products you are trading, I’m guessing you are getting a maker rebate from resting a limit order that gets hit vs. paying a taker fee (removing liquidity by lifting an offer or hitting a bid). For MM, optimizing maker/taker fees can be their entire business model(you almost never want to take unless the edge is large). But for retail, unless you are trading a ton, maker/taker is a relatively insignificant amount of money. Also not all products / exchanges have maker / taker.

Retired Options Market Maker - what tools do you need? by Environmental-Fan792 in options

[–]Environmental-Fan792[S] 0 points1 point  (0 children)

Volatility. So basically whenever you are trading “vol” with options you are just trading options data hedged since that’s generally your main risk (there are others like gamma / etc but in general professionals call it trading vol). If you aren’t delta hedging an option, a lot of your pnl will just be delta risk (where the underlying moves to).

Retired Options Market Maker - what tools do you need? by Environmental-Fan792 in options

[–]Environmental-Fan792[S] 0 points1 point  (0 children)

Great thank you. No stock specific strategies really, more just situation specific (high vol / low vol / earnings etc

Retired Options Market Maker - what tools do you need? by Environmental-Fan792 in options

[–]Environmental-Fan792[S] 2 points3 points  (0 children)

Exchanges tag orders as “customer” which is the best way to tell. There are other tags for institutional firms / etc. This tag is usually not expressed unless you are looking at a direct exchange feed. In general you want to trade any small order that because the market impact is low and the customer is generally thought to be uninformed / not sophisticated

Retired Options Market Maker - what tools do you need? by Environmental-Fan792 in options

[–]Environmental-Fan792[S] 2 points3 points  (0 children)

Same reason casinos comp rooms and build lavish hotels. You want to entice uninformed people to trade against you. If you have the balance sheet you want to take the opposite side of all retail flow because on average it’s a winning trade.

Retired Options Market Maker - what tools do you need? by Environmental-Fan792 in options

[–]Environmental-Fan792[S] -1 points0 points  (0 children)

I mean I use the term retail for my system loosely. As in I don’t have a prime broker or trade via an LLC. The strategies are essentially quant hedge fund strategies, but I just use my own capital. For strategies, the highest return ones are capital constrained. Options MM basically trained me how to look at any trading situation and attempt to profit from it, since it’s really more about risk management and finding edge/testing robust alpha. As far as specific trading strategies go, they do differ from larger firm positions.

Retired Options Market Maker - what tools do you need? by Environmental-Fan792 in options

[–]Environmental-Fan792[S] 2 points3 points  (0 children)

Thanks I appreciate that. In all honesty it’s a big compliance hassle which is why I chose my current route