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Thread: Buick Riviera: Internet Gambling Conviction Upheld (no BJ)

  1. #14
    Moose
    Guest

    Moose: A more appropriate example then:

    Why is it legal to buy "extended warranties" and "extra shipping insurance" when purchasing products over the internet, given that you are doing little more than gambling against your shipment going smooth, and when the product is shipped and/or passes it's extra warranty time, you are left with nothing, and needless to say, the -EV you buck is immense.

    As for your explanation, I will grant that the "meta-game" justification you give is certainly valid, but for the average person, there will literally be no difference between both forms of gambling activity, especially if the person doing the stock investing is so underfunded that ruination is a certainty.

    > But, it is simply naive to think that investing in the stock market and betting on sports are similar activities ..

    You say "naive", I say "enlightened". Guess we're just stuck on disagreeing on that point

    M.

  2. #15
    methodman
    Guest

    methodman: the days of buy and hope are over

    > yeah history shows blah blah,,
    times changes just like with bjack.
    the economy is horrible and getting worse,the market may not recover for 16 years,top guru's show.

  3. #16
    Don Schlesinger
    Guest

    Don Schlesinger: Re: Question

    > So what's the equivalent of "barring
    > the 12"?

    You have to have a zero or plus tick to sell short; shorting on a down tick is "barred"! :-)

    Don

  4. #17
    Don Schlesinger
    Guest

    Don Schlesinger: Re: A more appropriate example then:

    > As for your explanation, I will grant that
    > the "meta-game" justification you
    > give is certainly valid, but for the average
    > person, there will literally be no
    > difference between both forms of gambling
    > activity, especially if the person doing the
    > stock investing is so underfunded that
    > ruination is a certainty.

    I've said this a thousand times at seminars: it's easy to blame the product or the instrument, when, through ignorance, you misuse it and get in trouble -- but that's not the fault of the product!

    If you have a bad headache, and you take two aspirins, chances are you'll feel better in a little while; however, if you swallow the whole bottle, you might die -- but that's not the fault of the aspirin!!

    The public uses products that it doesn't understand. That doesn't make the products inherently evil; it simply makes people stupid. As the saying goes: no one ever went broke underestimating the intelligence of the American public. That's why, in the past 10 years, I've lectured on options and derivative products to thousands upon thousands of people -- so that they might become more intelligent about their uses.

    > You say "naive", I say
    > "enlightened". Guess we're just
    > stuck on disagreeing on that point

    I'm sorry, Moose, I've been involved with both for well over 30 years, and while there are some similarities, it just isn't fair or correct to imply that one is "enlightened" for thinking that they're both the same.

    Don

  5. #18
    Sun Runner
    Guest

    Sun Runner: Re: I think the word you are looking for

    > Options and futures play an enormous role in
    > providing liquidity and hedging
    > opportunities to the investment community.
    > They are frightfully misunderstood by most
    > people.

    We have strayed awayfrom the original Moose supposition that buying stocks and playing BJ is the same. I do not think they are.

    As to puts, calls, and straddles I have one example.

    Many wheat farmers "sell" next years wheat crop before the seed is even in the ground. They know their costs and want to fix their expected profit now. They just sold wheat short. They hedged. Is that a gamble -maybe.

    Equivalent to shootin' dice? Again I would say no.

    SR

  6. #19
    gpap
    Guest

    gpap: I have a question

    I understand that options are used for hedging, for example buying stock to cover a client wanting to buy knock out call option. However,I have a question with regards to the expected profit/loss from such a hedge. If for example, you own a gold mine and you sell x gold per year, but you think gold will go down the following year and so buy a put option on gold. If you are wrong and sale is the same or grows at the same rate then what is your expected loss?
    I suppose wht I am really asking is what probability do I have to assume on a company going up in value for me to purchse a call option (I know it is not as easy as it sounds but I was hoping for some advice). It's just I don't trust banks in the slightest (probably due to the fact that I read F.I.A.S.C.O.). In essence, I was wondering whether as an investor, if it is better to buy stock or buy a call option. Thanks in advance.

  7. #20
    Don Schlesinger
    Guest

    Don Schlesinger: Re: I think the word you are looking for

    > They know their costs and want
    > to fix their expected profit now. They just
    > sold wheat short. They hedged. Is that a
    > gamble -maybe.

    It's the very antithesis of gambling. It locks in a price, taking the gamble out of future price fluctuations. You know now -- and accept -- the current price to be the one you'll get in the future, which allows you to plan accordingly and not worry about the uncertainty of future price movements.

    Don

  8. #21
    Don Schlesinger
    Guest

    Don Schlesinger: Re: I have a question

    I'd really love to answer your question, but there are way too many variables to be able to give you any kind of a shortcut, quick answer.

    There are dozens upon dozens of Web sites devoted to options and to options education. You might check some of them out to get more familiar with why people buy options and what risks and rewards come from owning options with respect to owning, or being short, the underlying stock.

    Don


  9. #22
    Rich Tautenhahn
    Guest

    Rich Tautenhahn: Re: OK then

    I agree with the first 2 statements, the third is wrong. More often than not hedgers are the sellers of options and speculators are the buyers. option sellers are usually betting nothing will happen, buyers are betting something will happen. There is always a buyer and a seller, both sides thinking the transaction is to their advantage.
    Of course there are exceptions, I could go on and on but I won't. I'm a buyer and seller of options, but this is a gambling website so I'll shut up. Good Luck.
    > You shrug off the "outside hedging
    > situations" as if they aren't vitally
    > important to the people who use them.
    > Hedging helps limit and control risk
    > (volatility), which, in turn, makes all
    > kinds of investing and business decisions
    > more tolerable.

    > Were it not for options, countless
    > industries would undergo tremendous
    > fluctuations in revenues, whose flows are
    > somewhat controlled by the ability to hedge
    > via options.

    > Despite what you may imagine, the vast
    > majority of open options contracts are owned
    > by bona fide hedgers, not speculators.

    > Don

  10. #23
    Jimmy
    Guest

    Jimmy: Jay Cohen is situated in Las Vegas

    But he hasn't been patronizing the sports books.

    The article you came up with is bylined July 31. His appeal lost. Jay Cohen has been serving time in the Federal pen at Nellis Air Force Base, Las Vegas, for quite a while.

    > The 2nd Circuit of the United States Federal
    > Court of Appeals has upheld the conviction
    > of a New York man who was conducting an
    > Internet gambling operation.

    > Although not a virtual casino (as Nelson
    > Rose points out in the article) it
    > nevertheless is the nose of the camel under
    > a very big tent for the Feds.

    > Follow the link to read an article.

    > Buick

  11. #24
    Mark
    Guest

    Mark: So who has the edge with derivitives

    Hi,

    Interesting thread.
    I am curious, who tends to have the edge with derivitives.
    I guess with warrants it must always be the bank who issued them (A bit like a company that sells overpriced insurance policies).

    What about options, does the advantage usually(on average) go to the guy who writes them or the guy who buys them. Or is it a matter of doing the math and assessing each one case by case.

    I mean is it equally possibe to make money from seaching and buying underpriced calls as it is selling overpriced puts.

    And on that same subject isn't underpriced and overpriced all relitive. People look at the past price of the option and how much the price of the underlying asset has been bouncing around but how can you really use that ?

    Just becuase somethings been trending down heavily in the past couple of months does that really mean it is now more likely to treand down
    or continue to be volitile ?

    Isn't that like people who keep track of the reds and blacks on rolette and try and use this to predict the next spin. ?

  12. #25
    Norm Wattenberger
    Guest

    Norm Wattenberger: Re: I think the word you are looking for

    The futures market has a clear purpose. But, I believe most short-sellers are simply making speculative wagers. Day-traders are pure gamblers. Taking into account fees, the long-term edge isn't even in their favor.

  13. #26
    Sun Runner
    Guest

    Sun Runner: Re: I think the word you are looking for

    > Day-traders are pure gamblers.
    > Taking into account fees, the
    > long-term edge isn't even in their favor.

    But again, I say, there is a huge difference.

    At the end of the day, if a trader has to hold his position, he is holding a tangible asset. It may go up, it may go down, it may do nothing. But he is holding value of some degree.

    You place your bet and you are holding an intangible opportunity only.

    SR

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