Hey OP...I just went in and looked at some of your trade setups on my TOS platform. I have an active margin account with full option privileges @ TD and trade regularly. I am not getting the same BPR reductions as you are showing in your paper trading platform (typically, much higher BPR on FCEL, RIDE, BB to name a few). I know that was a fear you had initially in your posts. Don't know that it will be a gamechanger for you, but I thought you should know it could certainly be a strong difference maker in the returns you are projecting to make when you go live. Now that I am engaged and following, I would be happy to evaluate and compare on active margin account if you have a few symbols you want to throw out to look at while market is closed so they can be entered and looked at statically.
10-Delta Short Strangles
- Thread starter Theinkdon
- Start date
Day 2 EOD. Three trades placed yesterday closed at 50% profit:
Snapped at 4:38 Eastern.
RIDE closed automatically at 9:31, so I did it again for this week.
FUBO & FCEL came off later in the day, but there wasn't enough BP left to trade them again.
That's something I'm still trying to get a feel for, is how BP changes with stock price and time. All these trades went on using about 5k of margin/BP, but look at the BPE now: the market had a good day today, up 1.5%, driving all my positions toward their Call strikes.
I've sorted these now by BPE, and then expanded the positions:
BBBY is very slightly ITM on the Call side, so it makes sense that its BPE is the highest, but look at RIDE: the stock price only went up half as much as BBBY on a percentage basis, and nowhere near as much a fraction of the span between the strikes, but it's eating up nearly as much BPE as BBBY is.
I'm not taking any action yet, as most of the trades are still in-bounds, but BBBY will bear watching tomorrow.
Snapped at 4:38 Eastern.
RIDE closed automatically at 9:31, so I did it again for this week.
FUBO & FCEL came off later in the day, but there wasn't enough BP left to trade them again.
That's something I'm still trying to get a feel for, is how BP changes with stock price and time. All these trades went on using about 5k of margin/BP, but look at the BPE now: the market had a good day today, up 1.5%, driving all my positions toward their Call strikes.
I've sorted these now by BPE, and then expanded the positions:
BBBY is very slightly ITM on the Call side, so it makes sense that its BPE is the highest, but look at RIDE: the stock price only went up half as much as BBBY on a percentage basis, and nowhere near as much a fraction of the span between the strikes, but it's eating up nearly as much BPE as BBBY is.
I'm not taking any action yet, as most of the trades are still in-bounds, but BBBY will bear watching tomorrow.
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Rainmaker1, welcome to the thread and THANK YOU for doing that, that's exactly the information I've been looking for! I asked TDA that question on 6/23 and got this response: "We do try to make our simulated accounts mirror the live trading platform as closely as possible so the margin requirements should be similar. But we certainly can not confirm that margin requirements in a simulated account will be accurate." [Emphasis added.]
Which led me to believe it should be close enough, but it's disturbing indeed that you're seeing higher BPR numbers.
So since you mentioned them, would you mind modeling these specific trades tonight and letting me know what the BPR is? (All are 30Jul expiration, and at the Nat price.)
You don't have to do screenshots of course, just tell me the BPR number is.
Thanks!
Mike
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Sure, I am happy to help. And, the BPR numbers are quite different for a margin account. Please review here....
Well crap. If we're comparing apples to apples then this blows my strategy all to heck. Taking just the FCEL trade, a net credit of 7.70 with collateral of 548 is an ROI of just 1.4%, and that's over a 10-day trade only 0.7% per week.
The collateral in your FCEL trade is 6x that in my paper-money trade, making this strategy way less lucrative. You're sure the account is a "Margin" account?
Regardless, I'll keep tracking this and find out for sure when I get approved for Tier 3. Thanks for posting your results.
Happy to take a look in my TW account to see what the BP effect is as well if needed.
Yes. I wish it were different. Had this margin account with TD for a long number of years. Margin risk at 4x. If you could get Portfolio margin with a $125K balance, you would have position risk based margin parameters and metrics, which typically moves it to about 6.6x.
Still looks like it could be a good strategy. But, the returns and doubling you had earlier will certainly take longer to achieve.
Still looks like it could be a good strategy. But, the returns and doubling you had earlier will certainly take longer to achieve.
Yes, please verify. I want to make sure as well.
I show $547 in buying power for the same FCEL trade.
I tried it in a TW acct a few weeks ago and was seeing margin requirements 2 to 3 times as large as the TDA paper-money acct, so I bet that's what you'll find.
Maybe I'm too naive, but I just can't believe the BPE would be so different in TDA paper-money as it is in a real acct. Especially after they told me it should trade about the same.
That certainly dampens my enthusiasm.