3K monthly income on a 100K account

There are extreme volatilities that would make those returns very possible. Ie naked biotech premiums.

Consistency and pnl volatility is the problem.
 
xandman said:
There are extreme volatilities that would make those returns very possible. Ie naked biotech premiums.

Consistency and pnl volatility is the problem.
More...

That's why you have to sell as far OTM as possible to give it room to move. Even then it's sometimes not enough, and you end up with a -32% month like I had in April.
 
dejatrader said:
Here's a good one:

INSM last trade at $20.01
Sell Jul18 16 Put for $0.35
Margin $283
12.36% ROI in 16 calendar days (if you had sold it yesterday when the market was open).
More...

optionsXpress is showing $1600 margin requirement on that trade. ???
 
jimmyjazz said:
optionsXpress is showing $1600 margin requirement on that trade. ???
More...

Yeah, I thought about trying OptionsXpress until I talked to them and found out their margin requirements are consistently 5-7 times more than IB! For all their flaws IB is the best for margin that I've found and for my trading that's one of the most important considerations.
 
Yikes. I never really looked into how competitive they are on margin because the vast majority of my trades are directional in nature (long call or long put).

For the spread traders: is there any easy method or even a website for quickly estimating expectancy of a vertical? I can do it in Excel but I have to input all the information explicitly (max loss, max gain, probabilities of expiring above/below the strikes, etc.). It's a giant pain, but it's a must when I'm trying to assess the highest expectancy trade among a group of candidate spreads.
 
jimmyjazz said:
For the spread traders: is there any easy method or even a website for quickly estimating expectancy of a vertical? I can do it in Excel but I have to input all the information explicitly (max loss, max gain, probabilities of expiring above/below the strikes, etc.). It's a giant pain, but it's a must when I'm trying to assess the highest expectancy trade among a group of candidate spreads.
More...

There is not publicly available !accurate! method for quick expectancy calculation of vertical spread :) I have developed such software... for painfully a lot of money I am willing to lease it :) Though I am able to provide only results (win%, fair price, edge calculations, ... ), math behind it is proprietary secret.

There is also possibily to run scans for all possible combinations of vertical spreads and finding those which have bid/ask not in match with probabilites of win% (actually most of verticals are mispriced). Those scans can be done thru basket of optionable markets and can be sorted and filtered based on vertical widths, times to expiration, edge, win%, credit call/debit put vs debit call/credit put, etc.
This way we are able to find best of the best vertical spreads.

We were doing precision comparision for different methods and our method proved to superior to other methods like using greeks, standard deviations and stuff like that... :cool:

Anyway I do not expect potential customer for lease of software in this area ever, because we want to be pretty damn expensive with this solution :cool: You know, it is better to use it for our own trading...
 
jimmyjazz said:
Understood. I'd keep it proprietary, too. :D
More...

:D Hehe... Have you done some measurements how exact are you calculations compared to for example basic statistics of movement of underlaying, deltas, standard deviations?
 
You must log in or register to reply here.
Back
Top