I put my money where my mouth is

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Today I bought an October 2000 unleaded gasoline call option with a strike price of 90 cents a gallon, for 325 points. I will report my sell price when I sell it. Anyone who wants to claim expert knowledge of oil industry price trends should be willing to take a position according to his prognostications. That means if he claims prices are going to go down, he should be short. Otherwise, we know he is just a bag of hot air (to put it politely).

-- Sergeant Friday (just.The@facts.Maam), May 30, 2000



Your ability to put a few thousand dollars down hardly impresses me though I wonder how you could get the money to the place where your mouth is probably found.

I never gamble or kid myself that speculating on Commodities is anything but GAMBLING. Like Booze, I am opposed to both.

-- cpr (buytexas@swbell.net), May 30, 2000.

Are commodity options gambling? Let's check the meaning of the word "gamble" in the O. E. D.:

1. a. intr. To play games of chance for money, esp. for unduly high stakes; to stake money (esp. to an extravagant amount) on some fortuitous event. < p >As the word is (at least in serious use) essentially a term of reproach, it would not ordinarily be applied to the action of playing for stakes of trifling amount, except by those who condemn playing for money altogether.

According to this definition (and commentary), are my commodities options transactions gambling? I don't think so, as the amounts involved are not "extravagant" in the context of my total portfolio. However, let's assume for the sake of argument that my transactions are gambling. < p > Does that mean that the same transactions undertaken by CPR would be gambling? No, they wouldn't. Why? Well, one answer is that since he is wealthy (or at least claims to be), a few thousand dollars would not be "extravagant".

But there is a much stronger objection to calling such transactions "gambling" if undertaken by CPR: the necessary element of chance is missing. Since he knows exactly what is going to happen (i.e.. Oil prices will CRASH), it is not gambling for him to undertake transactions involving commodity options on oil products. Therefore, his religious objections to gambling do not apply to such transactions, and he is free to undertake them. < p > Of course, if he's still unwilling to undertake these transactions, despite my proof that it is not gambling if you know the result in advance, this merely shows that he is not certain about what will happen. < p > Q. E. D.

-- Sergeant Friday (just.The@facts.Maam), May 30, 2000.

I put my mouth where the money is. ;-)

-- Monica (climbing.the.ladder@on.my.knees), May 30, 2000.


CBOT studies show that 95% of all Commodity trades end in a loss and that 90% of "investors" who play Commodities loose.

You can do just as well or better shooting "craps" in Las Vegas.

-- cpr (buytexas@swbell.net), May 31, 2000.

Another patented CPR non-response! Since commodity trading is a zero sum game, approximately 100 percent of all trades end up in a loss for someone. However, since you claim to know what is going to happen with oil, you will be on the winning side. Therefore, it isn't gambling for you. Get it yet? I didn't think so.

-- Sergeant Friday (just.The@facts.Maam), May 31, 2000.

I sold my October 2000 90 cent unleaded gasoline call option today for 850 points. This gives me a gain of $2205 (before commissions of about $35), for a percentage gain of 162 percent on the original amount put at risk. Not too bad for about three months.

Of course, I'm not the "oil expert" that CPR is, but if you had taken his "OIL PRICE CRASH" prognostications seriously by selling an unleaded gasoline future short at 78 cents, where it was when I bought my option, you would be down approximately $10,000.

-- Sergeant Friday (just.The@facts.Maam), September 06, 2000.

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