A free Trading System that guarantees at least 180% p.a.
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Hmm... from my POV it looks like this: I'm very experienced with options because I've studied them deeply and wrote many programs, ran countless simulations, developed and tested at least 15 options systems; but only since system #13 I have found the right systems. And that was about one year ago.
I've even improved the Black-Scholes-Merton options pricing formula: it gives the same result but my extension makes it easier to understand it.
So, who do you think can do such things? Only a researcher, IMO...
With options selling I've begun only some months ago (you can research it in the archives), and shortly after it (ie. within some months) I've learned delta-hedging, and now I've even posted 2 free top performing options selling systems with a new hedging mechanism the world hasn't seen yet.
So... what do you think now, dear Shay?
And, regarding the x% performance: I like such mathematical systems, because one beforehand knows exactly, regardless of the future market situation, what the system will deliver if applied correctly. IMO nothing wrong here, I would say.
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botpro, you need to rethink your logic. Look at it this way:
1. If in the end, the stock is always above or equal to initial, the "buy and take no action" and your strategy are the same.
2. If in the end, the stock is above or equal to initial but during the period it moves up and down around the initial, the "buy and take no action" wins since your system eats up premium due to transaction costs.
3. If in the end, the stock is below the initial but the # of ups and downs exceeds premium, "buy and take no action" wins by losing only the premium you system will lose the premium + transaction costs that exceed premium because once you initiate the trades, you will lose premium + trading costs.
4. If at the end, the stock is below the initial but the stock gaps up or down, "buy and take no action" wins.
5. If at the end, the stock's ups and downs cost is less than premium and at the end is less than initial, you win.
So, your system is profitable and is better than do nothing in only 1 out of 5 situations, it is not guaranteed profit and statistically is inferior to "buy and take no action" because statistically you incur trading cost and the "buy and take no action" does not.
Another way to look at this logically is as follows: Efficient market hypothesis demands buying and selling options will net zero profit minus transaction costs (traders are not dumb). Since your system is statistically inferior to take no action (you incur additional trading costs), you will lose money statistically (if you trade enough times).
I think the world's smartest folks are in trading so whatever we thought of they likely would have tried already.
I am not trying to be critical, just try to help you think through your problems.
Cheers.
My top favorite system is the combo-system (sys15) that uses both short Call and short Put.
But in this case one needs to hedge also by shorting the underlying stock.
And we all know: shorting the stock means borrowing the stock first, but which is not always possible.
There is a solution to this problem: using synthetic options to emulate the stock shorting!...
But in this case one needs to hedge also by shorting the underlying stock.
And we all know: shorting the stock means borrowing the stock first, but which is not always possible.
There is a solution to this problem: using synthetic options to emulate the stock shorting!...
I tried backtested you system using one month's SPY history, 1 one month call contract, the ATM premium was ~$300, there were 13 crossing of trades, 5 with gapped up of ~$1.00-2.00, so in real life selling 1 month ATM option, I lost money. Even without the gaps (continuous 24/7 market), transaction costs exceeded the premium. At the end, SPY>SPY at start so buy and take no action was actually profitable while your system lost money.
Well "botpro" is starting to PM me, most likely he doesn't like what I post.
"how childish.
if you only had brought some arguments that show I would commit fraud...
FYI: it has never been my goal to commit any fraud!"
How about "guaranteeing" 180%, huge fraud in my view and CFTC, and stop sending me any more of your crap PMs. I often get letters from hidden vendors who have motives that are not positive and legit trying to get me from stop posting their lies to unsuspecting newer traders.
Most likely get PMs from his shills like all the others.
"how childish.
if you only had brought some arguments that show I would commit fraud...
FYI: it has never been my goal to commit any fraud!"
How about "guaranteeing" 180%, huge fraud in my view and CFTC, and stop sending me any more of your crap PMs. I often get letters from hidden vendors who have motives that are not positive and legit trying to get me from stop posting their lies to unsuspecting newer traders.
Most likely get PMs from his shills like all the others.
No, he was talking about risk, not cost. They are two different things. The risk is zero* but cost not.
* except for counter party business risk. Broker or clearing house goes belly up and closes shop.
What commission structure did you use?
I would suggest to use a commission scheme like that of IB, or a better one.
As said: for this system one has to emulate a gap-less market (meaning the overnight gaps) by trading at multiple exchanges around the globe. Because then an overnight gap in US market would have only a minimal impact on the own position.
I wanted to test it in a GBM+BSM simulation.
When testing in a simulation I would test it first in a continous 24/7 market without overnight gaps to ensure that it's guarantee holds.
Then one can try also with gap variations.
And also within the simulation the emulating of trading the stock at multiple exchanges (US, Eur, Asia) to form a near-24/7 market...
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He could be also one of the smartest one day, considering his smart/stealth approach of presenting/asking/exchanging various questions by pretending what he knows/offers in order to learn from others through the kind/volume of stimulation/feedback generated!
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