A Non-Correlated Strategy Trading Journal That Shows Profit

Magic said:
Yeah, this is painful to read. Agree that diversification is good but will put my own humble word of caution in for any new guys reading beyond that for insights.

Short dated otm index calls are the cheapest vol you can find in a normal market regime. Furthest thing from a sucker’s bet imo. Strategies often offer compensation for meeting the needs of the market and there’s a huge offer in this space from all the CC writing.

Also you’re buying a long wing despite practically being long spot, waste of commissions.. the long gamma is being unused and the risk control provided is meaningless here. And right when your short strike actually gets to decent vol space you’re rolling it back to a lower vol figure...

This is like BXY but way worse. Even the terminology.. “People won’t understand if I tell them I shorted options because there was a huge run-up in gamma.”

raVar, if you were just starting to put together the pieces and open to constructive criticism with this journal, that would be worlds different. But coming in here with insufficient knowledge, affecting a teaching posture, and then dismissing all of the real talent on this site is not going to be welcomed by the genuine regulars.

I’m sure you will go about your business regardless. I’m a pretty ambivalent guy but felt compelled to caution new guys and lurkers from getting sucked in. This stuff is hard enough to learn without getting sucked into rabbit holes. I myself got started on the wrong foot so I know what that’s like first-hand.
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Great comments, even though I like and agree with @raVar's concept in general as it is something I have been thinking about a lot since I started trading options.

One general comment is for us mom and pop amateur retail option traders, I don't think selling spread that is 15 delta out automatically has positive expectancy. Not after commissions and slippages and bid/ask-spreads.

When I first started trading options back in 2013, I did a lot of mechanical covered calls on stocks I owned, also tried call spreads too. Didn't work that well for me and I chalked it up as due to commissions and bid/ask slippages. For it to work for me, I needed to have a more correct opinion of the direction/timing/magnitude than the MM who bought the calls from me. That was a very tall order. :banghead:
 
Actually, I think I'm just going to include a permanent link, so I don't have to repeat myself ...

As always, to see how we are doing on each process? Check out the tabs in the spreadsheet below. Thoughts, questions ... comments? Post 'em below!
_______________________________

Simple Longer-Term Hypothetical Non-Correlative Strategy Processes: https://www.elitetrader.com/et/thre...ournal-that-shows-profit.337303/#post-4951437
Spreadsheet: That keeps track of each trade, each process, and then everything together ...
IF YOU ARE ALREADY AN OPTIONS TRADER, Here is a Disclaimer: I know, I know, I know ... as well as a secondary ... I know ... I know ... I know
 
raVar said:
But for a beginner (man that gets annoying having to reiterate that every time) ......
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That's a hedge you create against being smacked by ET'ers. :)
Boxing_Jun-18.jpg
 
ironchef said:
Great comments, even though I like and agree with @raVar's concept in general as it is something I have been thinking about a lot since I started trading options.

One general comment is for us mom and pop amateur retail option traders, I don't think selling spread that is 15 delta out automatically has positive expectancy. Not after commissions and slippages and bid/ask-spreads.

When I first started trading options back in 2013, I did a lot of mechanical covered calls on stocks I owned, also tried call spreads too. Didn't work that well for me and I chalked it up as due to commissions and bid/ask slippages. For it to work for me, I needed to have a more correct opinion of the direction/timing/magnitude than the MM who bought the calls from me. That was a very tall order. :banghead:
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Dude, you can replicate the entire penny-position in vol. No need to take the risk in shares. The guy is remedial 099 and three noobs are gushing. He's long 12 shares and received a $22 credit. C'mon.

The guy shorted Q-vol against SPY. Why? BC it's so exotic!

QQQ +0.71%
SPY +0.47%

Go, you!
 
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Can someone please explain to this noob what's non-corr about this abortion of a strategy? TIA.











and yes, I am the ONLY reason this thread has any views. Y'all know it.
 
destriero said:
Dude, you can replicate the entire penny-position in vol. No need to take the risk in shares. The guy is remedial 099 and three noobs are gushing. He's long 12 shares and received a $22 credit. C'mon.

The guy shorted Q-vol against SPY. Why? BC it's so exotic!

QQQ +0.71%
SPY +0.47%

Go, you!
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Welcome back. I missed your biting comments. :p

I have to admit you are correct, still I am gushing about the strategy, better than me blindly doing covered calls.
 
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