A Non-Correlated Strategy Trading Journal That Shows Profit

Your partners? Did they teach you about "IV bleed?" That is some sh!t that should be held close to the vest. Don't want your stuff to be traded flat!

lol @ironchef quoted @Wheezooo

This is what happens when keeping it real goes horribly, horribly wrong. You've blocked the few legitimately knowledgeable posters.

Dude. STOP.

ravar lolol.png
 
Last edited:
So, again for folks who are new to options (see the link below for those that aren't ... and even them, I doubt they understand what I'm going to do here ... sans one or two that I have noticed know their stuff) ...

Remember, we said that since you are new? Concentrate on the Delta's and the Probability of Touching. Also known as the Δ of a position and the PoT.

Note, those two numbers DO not move in lockstep. There's more to the math as to those numbers. But since folks ARE new to Options (see my earlier comments on teaching subjects) ... just concentrate on those two numbers at first. The Δ and the PoT.

Today, the Friday 202 QQQ Nov 8 Calls settled at 0.20 Deltas. When we sold them, the Δ's were around 0.15. Remember, we said UP is bad (sorta, more to it, but for now, that's a simple way to think about it), and DOWN is good for us. We sold when the PoT was around 30%. Now, it's 39.5%. Remember, we said UP was bad (sorta, more to it, but for now, that's a simple way to think about it), and DOWN is good for us.

So that position has moved against us a little bit. The first day we sold the Calls, it really moved against us. But has settled back down a bit.

We have 3 days until Expiry. When those 3 days expire? That credit we took in is ours.

If we get in what I think is trouble? I will roll the position. We'll get to that later. But for now? The position is "ok". Down a little bit, by about -$2.11 at the moment. If the Q's falls off, that will be "good" for us (A bit more to it than that, if Volatility picks up, but for now, that's a simple way to think about it).

But then again ... our SPY is up since we bought in. So all told, I think we are up about +0.17% thus far for the month ...

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
 
Also, remember ... any account that small? Is not going to "make it" by just trading alone. Not unless you have like ... 45 years.

Since most of us want gains a little faster? It's absolutely critical you add something to your small account, so as to compound your gains. As mentioned earlier in this thread, this model is going to show a deposit of $25.00 per week, or $100.00 a month. Then, as time passes, we'll have more capital to compound the whole process forward. Besides that benefit ... there is a mathematical benefit to what we are doing here that will fight against possible DD's that might crop up.

Just something to keep in mind.

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
 
Oh, almost forgot ... I have run this model for a few years, doing something a bit better, in Futures. I was demonstrating to a group of traders, how to decide on MTE for what they want to run.

That one runs the SPX, and just so that it's said? Is MUCH better, as the SPX carries more juice. In other words, you can sell options that have LESS probability of having to defend, for more money.

At the same time, that one just runs a straight long /ES contract.

There's actually smarter ways to do it than that. And better ratios to work out with the SPX to the /ES ... but I don't want to do everyone's work for them. And now there are the Micro's, so one could use that. This is just a model, to illustrate principles that ones need to consider, when building a model. That's all.

The reason I'm going with the QQQ here, is I hate hearing the excuse "Well, I don't have $75,000 to put in a trading account" (That model shows someone should AT LEAST have $75,000) ...

Here's the link to that particular spreadsheet that's been running for a few years now ...

I've consistently told ones, that such a live in-sample data sheet shows ones that it is INSANE to run that model, with anything less than $75,000.00. Heck, with the notionals where they are now? I'd probably do it with $125,000.00. but then again, I'd change it a bit.

Regardless, it's there for ones that want to look through the history.

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
 
How are SPY and QQQ non correlated? Why do you think SPX has more juice? Why do you continue to lie about managing OPM? Why don’t you know what you’re doing?
 
Things are a little dead around here (at the office)

I went ahead, and simmed this out for this little model I run for aspiring traders.

Now, remember, we said, we were selling 202 Calls that expire Friday, which when we sold them, we looked to sell .15 Δ's, which is about 30% PoT (Probability of touching right)? And for folks that are new to options (see the link below if you are not) .... a way to think about it when you sell an option ... is deltas down = good. Probability of Touching down = Good.

So I looked over at the change, and you will see that the 202 Calls that expire on Friday are at .15 Deltas, and around 30% PoT.

upload_2019-11-6_15-30-55.png

So they haven't gone down. Not at all. We're still at .15 Δ's, and around 30% PoT (Probability of touching).

Then wait a minute ... how is the position up by a few dollars?

upload_2019-11-6_15-32-27.png

Remember ... we said we were going to be selling sucker bets to folks. It's like selling a lottery ticket to someone. And they have to get that lottery ticket to the Store, to cash it out. The only problem? Is that it is burning up and on fire, the second they buy it. So they have a limited time to get to the Store, to cash it out, and while they are trying to get to the Store to cash out their lottery ticket? It's on fire. They have limited time.

So there is another aspect of option pricing, called theta.

The specifics, and the math isn't important right now.

if you are new to Options? This is the way to think about it.

Yes, there is Δ's, and PoT (and I haven't started to explain Δ or PoT yet, that's intentional. If anyone wants an explanation? I can try to break the math down to something simple to understand. But for now ... if you are new ... I just want you to see some numbers, and get used to them. With new folks ... it's easy to just give them two numbers, and tell you to watch those). But there are many aspects to an options price. And one of them? Is theta. Or θ. Time.

The second you get involved in an option? Time ... or θ is ticking away. It's running out.

So to answer your question, how can the Δ's and PoT stay the same, but we be UP on the position? As sellers of that 202 Call, we have also sold θ ... or "Time" to people (there's another aspect that's helping us out, but we'll get to that later).

So my main point, as I looked over at the chain today? Is remember, with Options? You have multiple ways to win. It's not just a matter of the market moving in your favor.

Nice to see the long-flat up another 0.31 today as well ...

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
 

Attachments

  • upload_2019-11-6_15-31-52.png
    upload_2019-11-6_15-31-52.png
    42 KB · Views: 13
Last edited:
@raVar,

p(t) is not an edge. Nothing approaching an edge.

You can always spot the newb by their reliance on p(t). It's not a quant. It's worthless. There is no edge in structure; which is what you're implicitly stating by going on about this silly probability of touch.

We have seen THOUSANDS of your type on here. You're in a 12-step program of degen retail. You found OPSHUNS TRADING and cannot believe your luck! Options are meant to be sold and you're just woke enough to understand HS stats.

The internet is forever and you're embarrassing yourself. You've already been doxxed by your YT page... do you really want to be known for this utter shit?
 
So with that jump up in the overnight, the Long-Flat is doing nicely. SPY is up another 1.925 at the moment, and $41.28 overall on that position, as you can see in the Spreadsheet (link below).

Coversely, since we are attempting (in a rough way ... again, there are more Capital Efficient ways to do it, see the links below) to short the market at the same time, we were long those QQQ 202 Calls.

So looking over at the Q's, the market was just getting too close to our 202 Calls that we sold, that expire next Friday.

So I decided to defend the position. Or as we say ... "Roll" it.

Now this is how hard, rolling is.

Ready?

Two steps.

Pretty complicated stuff here ...

Step 1) You close down the trade, and take your loss. So you enter an order, to close the spread, and take your loss, just as you would with any other directional trade. We closed it down at ... if memory serves ... around 0.30. We sold it for 0.22. So we lost 0.08.

Step 2) You sell another spread, further out in time. So we sold a spread, if you check the "MTE - MM - Small Example - QQQ Spreads Entry" tab in the spreadsheet, 1 11/15 QQQ 205 / 211 Call Spread for 0.24.

It's labeled right there trade entry on that tab, the Δ's were 0.14 and PoT was 28.0%. I will get to an explanation later of Δ's and PoT. But I want to do this several times, just newcomers get used to looking at those numbers again and again and again and again. Trading successfully is all about repetition. We sold the 205 Call, the Δ's were 0.14, and PoT was 28.0%. Remember when the Δ's go down? That's good for us. When the PoT goes down? That's good for us. If we see those Δ's at 0.08? That's going to be great. If we see that PoT at 10%? That's great.

At first it's as simple as that. Our SPY long is doing well, and we rolled and defended the QQQ position.

Also note? We didn't really lose money, at the end of the roll of the Spread. We lost 0.08. We gained 0.24.

And remember ... the whole point of this is to demonstrate the principles of non-correlation.

We had to defend our Short position. Yes, that is how complicated a "roll" is (/sarchasm)

We are making out on our Long position.

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
 
Last edited:
You must log in or register to reply here.
Back
Top