A free Trading System that guarantees at least 180% p.a.

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Martinghoul said:
This sh1t just keeps getting better... Just when I thought we've reached the limit of awesomeness, botpro surprises again!
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Ok Martinghoul, just listen very carefully: I as the thread owner ask you not to post in this thread (also in no other threads of mine) anymore!
Because you have nothing constructive to contribute to the thread(s) but your stupid off-topic rants.
By your such destructive actions you are doing harm to the thread, and also to ET, because you are lowering the quality level of the site.

To the mods: please block the user Martinghoul from this thread, because he is posting off-topic and non-constructive postings only.
 
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I think Baron needs to move this to Chit Chat before someone tries to copy the system and loses money and complains about the claim that a trading system guarantees 180% p.a.
 
optioncoach said:
I think Baron needs to move this to Chit Chat before someone tries to copy the system and loses money and complains about the claim that a trading system guarantees 180% p.a.
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No, the system is mathematically sound.
If someone makes a loss then he must have done something gravely wrong, or a black swan event must have happened.
Test the system in a 24/7 liquid continuous market w/o any gaps and it will give the said PnL.
It is up to the trader to find such an environment. The text clearly states this. It is possible to monitor the position 24/7 by using multiple exchanges around the globe where the stock gets traded, ie. emulating a near-24/7 continuous market.
Investment houses and banks have such an environment by default, so they can apply the system much easier because they already have such an infrastructure.
But Average Joe can have it too by using a broker like IB to access multiple exchanges around the globe.
As stated clearly, it is up to the trader to apply the system in a near-24/7 continuous market.
 
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botpro said:
Ok Martinghoul, just listen very carefully: I as the thread owner ask you not to post in this thread (also in no other threads of mine) anymore!
Because you have nothing constructive to contribute to the thread(s) but your stupid off-topic rants.
By your such destructive actions you are doing harm to the thread, and also to ET, because you are lowering the quality level of the site.

To the mods: please block the user Martinghoul from this thread, because he is posting off-topic and non-constructive postings only.
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Right, let me be serious here for a moment...

What you seem to be missing here, botpro, is what someone with a modicum of brain matter should have considered by now. Specifically, ask yourself this question: why are people who have and are actually trading (unlike yourself, a "researcher") making fun of your ideas? There are two possibilities. One: you're an undiscovered genius, a "diamond in the rough", so to speak, who has managed to bless the community of dull options traders with his blinding insight. We're all so envious and jealous of your obvious gifts, that we have to resort to "non-constructive" humour. This appears to be your interpretation of the proceedings here.

However, I urge you to consider the alternative. Specifically, your attempts at coming up with what you describe as a "guaranteed system" are so monumentally ludicrous, silly and misguided, they're worth little more than a chuckle from anyone who has actually been in the mkt for longer than a few months. To add insult to injury, when people actually take time and attempt to show you the obvious flaws in your reasoning, you refuse to listen (I've mentioned this in an older thread). People are making fun of you, botpro, because there is nothing more hilarious than an arrogant idiot.

Now I hope this was constructive. Furthermore, do you want me to help you further? Would you like me to try and explain to you (as others have tried) why your "system" is not as you describe it? If you do not want and/or the Mods request it, I will happily stop posting on this thread.
 
botpro said:
Here's the latest update (v1.4) of the text, also available as a txt file

Regarding the hedging mechanism for the combo-system (sys15): I already provided some info about it in posting #89. A full documentation of it will be in the next version of the text.

Code: 
Hedged options selling system sys14 (and the combo-system sys15)
AN OPTIONS SELLING SYSTEM THAT GIVES A GUARANTEED PROFIT OF 201% PER YEAR

Author : botpro at www.elitetrader.com
History:
  2016-04-18-Mo v1.4 It works also with American style options
  2016-04-17-Su v1.3 Added optional Extension #1 (s. end of the text)
  2016-04-17-Su v1.2 Fixed PnL to 201% p.a.
  2016-04-17-Su v1.1 Fixed PnL to 218% p.a.
  2016-04-17-Su v1.0 Initial version: PnL=187% p.a.


Intro:
  This is an options selling system with a special hedging mechanism (called "entry-level hedging").
  If applied correctly in the market, then it is a zero-risk system.
  It can be used for all options regardless of the option style (American or European).
  PnL is dependent on the ATM premium: the higher the premium the higher the PnL.
  The basic system uses a short Call (can also be a short Put, but then hedging rules have to be reversed).
  The combo-system (sys15) uses a short Call and a short Put together (but uses just one stock position for both!).
  The example uses a 40% volatile stock; then the PnL is about 201% p.a. for sys14 and 658% p.a. for sys15.
  It is the special hedging mechanism that makes it all possible.


Beware:
  - The example below uses for simplicity just the minimum 1 contract,
    but in practice one would need a PDT-account with at least $25k.
  - When testing this system use a cheap stock commission rate like that of the broker IB ($0.005 per share, minimum $1).


Rules of the options selling system sys14 with "entry-level hedging":
  1) The system consist of 2 parts:
       1.1) sell a call option, and
       1.2) go long the stock
  2) The option position is normally kept till expiration (but a possible early assignment is ok with this system)
  3) entry-level hedging (not delta-hedging) for sys14:
       3.1) if stockprice drops below the initial entry price then close the stock position immediately
       3.2) if stockprice crosses over from below the initial entry price then re-open the stock position immediately
       In practice one would use two bands (for example +10 cents and -10 cents) around the entry price to avoid too many hedging trades.
       (FYI: The hedging mechanism for sys15 is a little bit complicated and tricky; in the next version it will be documented)


Example: assuming InitialStockPrice=100, HistoricalStockVolatility=40%, using monthly options (ie. Expiration=21 business days)
  Selling 1 Call:
    Spot=100.00 Strike=100.00 ExpDays=21 HoldDays=21 EarningsYield=0.00% DividendYield=0.00% StockVolatility=40.00% --> Call=4.60 Put=4.60

  Going long 100 shares of the stock:
    Spot=$100.00 --> CapitalNeeded=$10,000

  At expiration date:
    Regardless what the CurrentStockPrice or the CurrentVolatility is: we will keep the credit fully.
    The stock position serves us only to hedge our option position; it is not intended for making additional profits.

  Profit:
    We use the usual 2:1 overnight margin of the broker. So we have a leverage factor of 2.
    Meaning: of the $10,000 only half of it minus credit / 2 is our own investment (this is the basis for the PnL calcs).
    CreditReceived = $4.60   * 100                 = $460
    StockPos       = $100.00 * 100                 = $10,000
    UserPart       = $10,000 / 2 - $460 / 2        = $4770  (this is the basis for the PnL calcs)
    MonthlyPnL     = $460 / $4770 * 100            = 9.64%
    AnnualPnL      = ((1 + 9.64/100)^12 - 1) * 100 = 201.73%
    From these numbers the commissions paid and the interest for the margin has to be subtracted.


Remarks:
  - It's up to you to apply this system in the market(s).
  - To get the hedging correct, one would need to monitor and if necessary trade the stock nearly 24/7 by
    using multiple exchanges around the globe. Ie. by this, one has to eliminate any overnight gaps in the stock price.
  - If applied correctly then the given guarantee holds, ie. 201% profit per year.
  - Using more volatile stocks and/or a shorter timeframe than the above used 1 month will give even more profit.
  - Regarding margin: you have to do the math to get the 2:1 margin. Ie. in this case you would initially
    keep only $5000-$460/2=$4770 plus commission in your account. The broker grants you 2:1 overnight margin (or 4:1 intraday margin).
  - The system is freely scalable to any investment amount. But the stock position should not be too big
    because it must be easily closable and re-openable; I would say the stock position should not be more than $50k.
  - For big money one would use multiples of such constructs, but then one should of course use different stocks.




The following extension(s) are optional:
--------------------------------------

Extension #1: Profit booster: How to make more than 8000% per year with this system:
  The smaller your own part of the invested total money is, the more the profit% will make up:
  Example:
    - let's say your own money is $1000
    - borrow the rest ($3770) cheaply from friends or take a 1 month loan
    - let's assume you have to pay 1% interest for the 1 month loan, ie. $37.70
    Now, your basis for the PnL calcs is your own $1000 plus the interest for the loan = $1037.70:
      MonthlyPnL = 460 / 1037.70 * 100              = 44.3288%
      AnnualPnL  = ((1 + 44.3288/100)^12 - 1) * 100 = 8070.26%
    Since compounding gets used, each month the above absolute numbers would of course change,
    but the relations (ie. the percentages) would stay the same.



--- end of text ---
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Addendum:

To be on the safe side, I as the author of the free systems make these additional statements regarding the systems:

1) The systems are the result of academic research.
2) The systems have not been tested yet in the real market.
3) Use the systems at your own risk. Test it first throughly in simulations and/or backtestings/forwardtestings.
 
newwurldmn said:
Says the guy who guaranteed returns and then backtracked
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Only in your distorted imagination...

BTW, I'm sure you use 2 accounts!
Because you are in my ignore list. So you should not be able to quote my posting. But you have been able! This you can do only with 2 accounts: quote in one then copy then cancel, and paste to the other login...
A despicable act to use multiple accounts! Shame on you!

You are again in my Ignore list.
 
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