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Options are priced according to statistical probabilities. That would mean if you do not have some sort of edge that tilts the statistical probability in your favor you can not magically extract money out of the options market. If you just can tilt the probability slightly to 49/51% or better...

It still smells like alpha. Trade #4 - short signal Aug 12 - bought 15 cts of Aug 16 Bear debit spread +290/-289.50 for $411 Result: Win, Profit of $339 Realized book: $1904

Another swing trade completed yesterday. Trade #3 - long signal Aug 6 - bought 5 cts of Aug12 Bull debit spread +287/-288 for $321 Result: Win, profit $179 Realized book: $1565

Win rates should even out as you get more data points to average with. Unusual high or low win rates are common then there is few data points as the system may randomly start with a winning or losing streak.

Make friends with other successful traders/investors or become a experienced mentor/coach to a rookie/beginner trader. There is always trading/investment/finance/economy related things to talk about that are commonly shared and not sensitive to your personal edge/alpha. And with your...

As I use to say, happiness is a state of mind. It's also a temporary cursorial feeling, you don't walk around happy all the time. Money it self does not make you happy, it's just a tool, like a screwdriver. You don't become happy by staring at the digits on your bank statement. It's what you do...

Did spot an calculation error on trade #2 Profit for the trade is $150 (7 contracts * $50 intrinsic value) and realized book value then becomes $1386

Maybe you're right.. we'll see if it will crash into the ground.. or fly. It will be a fun ride anyhow

Real money equity book start value is $1000 Will round amounts up/down to a full dollar for easier reporting Trade #1 - long signal Jul 19 - bought 10 cts of Jul24 Bull debit spread +299.5/-300 for $264 Result: Win, profit $236 Realized book: $1236 Trade #2 - short signal Jul 29 - bought 7...

Trying out some short term trading using weekly SPY options. Have had a tough time discovering a short term trading model that produces alpha and can successfully pass statistical validation. Maybe this model being tested live in this thread with some real money will finally work out.. or not...

One common issue I see often among rookies is that the short leg gets exercised mid trade and you are required to purchase or deliver shares that you do not have coverage for dollar wise. Ex. you have $10,000 in account equity and are suddenly required to purchase shares for $40,000 on a...

Yes, there is..

Go to Vegas and apply your prudent risk management at the roulette table and we will see how it does.

You can not trade at the exact close but you can during the last 1-2 minutes of the day. Not an issue for me as SPY or XSP doesn't move much in that short time. I'd see the SPY move in the 0-20 cent range during the last 60 seconds.

True, if the closing is between two strikes, I'd select the upper available strike for a short trade and lower strike for a long trade.

I will look into the best approach. Thanks for the input, appreciate it.

Duh, I must be really stupid of not thinking of this prior. Just by deploying a debit spread instead of a credit one flips the equation and solves my issue the RR-ratio.

The return and risk must be regardless of price distance. A winning trade in the SPY may be only 0.05 in price movement while a losing trade may be 2.00 in movement. The risk vs reward should be 1:1 or close to it. Currently I'm trading the signals from this model using a Bull credit spread or...

Is it possible to to structure a trade so that if the next days close is lower than today's close I win $1 and if it is higher that today's close I lose $1, and the opposite for a reverse trade. I'm looking for a 1:1 profit vs risk and I will put on the trade in the 5 minutes before the market...

drawdown = risk CALMAR ratio built to evaluate Hedge Funds and CTA programs is a good metric for this. Trailing 36 month return divided by max draw down during the period. It's a real-world return vs risk metric. I personaly prefer this to sharpe/sortino as real-world realised risk is not the...