and we are live. Are you doing friends Ernie here with another 0-dte.com podcast. This is episode number 17. Can you imagine that 17 episodes? And have you signed up yet? You can do that right below right now, today. We're going to talk about all time highs. All time highs all the time. Yeah. That is it's almost how would you say it?
It's not an anachronism, it's not oxymoronic. It's a, what is that? How can you have all time highs all the time, cheapens each individual all time high. If you believe that the next day is going to be an all time high, what it does for the market. Is is interesting for those people who are in the market for the longterm.
They have mutual funds. I have a bunch of mutual funds and they're doing fantastic. Those things just keep on going up. It's just buy and hold until they stop going up. And then of course they don't do so well, but you choose a good five star fund and you're all set. In the market trading is a different story.
Cause when you're going up consistently like that, what happens is the range in the day gets smaller and smaller and with a very small range. And what I mean by range is the opening price to the closing price and then the high and the low actually that would be the total range is the high of the day versus the low of the day.
That range keeps on shrinking and shrinking and shrinking. And even though the closing price is going up like this, it makes it very difficult to figure out well, when do I want to get in? You never know when you're going to get a dip. Now, one strategy you could use is to buy the dip.
You've heard that before, buy the dip, buy. Buy the dip. And that's really in this type of environment is really the right thing to do as an options trader though, it presents a completely different set of challenges. And that is because, unless you are long options, which most pro option traders are not, they are not long.
They are short options. That doesn't necessarily mean you're betting that it's going to go down. What it means is that, that you you tend to sell premium as opposed to buy it right. Or be a slave to it. When you sell options, you are a net seller of premium. In other words, you are collecting the premium that is decaying on each options contract, and it's working with you as time progressed.
When you're long options that premium, and particularly in this case, because the future expectation is that the market will go up. Options are priced accordingly. So there's a lot of premium. In other words, options are very expensive to go up all because the market knows you, you can expect it to go up.
So why should the odds be in your favor then? Not. So you have to pay a premium for that very high expectation that you're going to gain in that day. The interesting thing is that sometimes the premium gets so much into case so fast that even if you do go up, you can actually end up losing money. And that's that is the conundrum of long options.
And it's one of the reasons why most pro traders. Do not buy or go long on options. They want to be the insurance company. They want to sell options. Now market's going through all time highs have those two consequences. The premium is very expensive and there's no range. There's no place, no little tick down where you can get in or find a place to get in.