Trader Meetups (Part 11)

I concluded my last post with an open question.  Does it seem suspicious that JD, the meetup presenter and supposed full-time trader, spends all day trading a system he has not backtested?

Given the content of my blog, this response should sound suspicious.  Without solid backtesting and system development behind it, I would never recommend anyone place live trades except in the smallest of size.  Without these steps, you have no idea whether the results are fluke or robust and likely to persist into the future.  Such a small trading size would hardly fund the mortgage payment every month, which to me casts doubt on this guy’s supposed status as a full-time trader.

Alternatively, he could trade full-time and just make very little money doing it.  Perhaps that’s why he sells a service for $79/month?

As mentioned previously, JD spoke long about how option trading can profit in many different ways and he smiled extensively when talking about large profits.

A repetitive application of the big smile was with discussion of option expiration.  On two occasions, JD mentioned the statistic that 80% of options expire worthless.  Since the presentation focused on net short option strategies, expiring options means profit:  something definitely worth smiling about, right?  The only problem is that this is a well-known option myth.

Like his dismissal of backtesting, inclusion of this option myth to the presentation makes me suspicious.  Did JD think we were all ignorant about option trading?  Maybe he thought he was talking to a room full of novices who wouldn’t know any better.  Why would he intentionally lie, though, except in an attempt to sell his product?  If this was an honest mistake then I would again question his claim as a full-time, 10-year option trader since this is Options 101 level material.

I will continue discussion of this meetup in my next post.