Was watching this video (warning - it's an hour long). Basically, they are building a platform where you can automate your options strategies. Do you guys think it is realistic? Assuming technology works perfectly, would you be able to auto trade your strategy? I kinda feel options require a high touch approach ... Can't just blindly roll to the next month etc.
Can you automate your option strategy?
- Thread starter qlai
- Start date
Robert Morse
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Automating Options strategies in a retail account requires materially more knowledge and expertise than equites. For non-market makers, I would prefer manual orders that I work and watch.
BTW, I have no idea what they are referring to by a "public" API.
BTW, I have no idea what they are referring to by a "public" API.
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They already support auto-trading iron condors (through Alta5), so why adding more strategies and features wouldn’t be realistic?
Though not all strategies may be applicable, and not everyone may want to use that system. And it may take them couple more years to fix remaining bugs and find solutions to some problems. At some point it must work great for basic strategies.
Btw, there is no way you could manually trade more than couple backtested strategies (if any) better than an automated system that follows every backtested parameter. You’ll have slippage with both methods, but you can lose more money by trying to do this “better” than an automated system. If you miss a day, or P&L level (for example to exit at 50% profit) then you’ll have completely different strategy than the backtested one. And yours won’t be testable.
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A good options trading system limits risk in two important ways. The first way is cost. The price of options is very low compared to buying the same amount of stock. The second way is related to stops. A good system will cut losses quickly and keep them small which automation is unable to do.
Automating my orders is the least of my problems. I already have programmed my own application for that.
Main problem is finding those strategies that are worth trading at all and that's an immensely difficult problem, otherwise finance wouldn't throw so much money at it.
I worked for a billion dollar fund which didn't invest enough in research (zero is definitely not enough) so they exited the options business. I know a 10 million dollar fund which invested 1million+ in research *prior* to trading any strategy since they didn't have any and were hoping that will buy them one, found nothing and (wisely) decided to shut down at that point. Those money would have bought them 100 years of work from myself alone, but they didn't spend those money on neither me or a single guy. Now, in my entire existence as an employee I haven't had a single straight month where I could put my prowess at work where I want, only did that on my parent's payroll for a year prior to going to the university (best in town) I wanted, field I wanted (hardest of them all) and got there first (admitted). I also grew up as a peasant who witnesses and knows that if you work 12, 14 hours days "in the field" (as I did then and I do now as an employee), that "freedom" / "you can do anything" afterwards isn't worth the value of the paper you write it on before wiping your a** with it. It's not a fair competition by any means and complaining about it is worth less than me writing that thing electronically and being unable to even use it for the stated purpose, all it's worth is being a winner and not a loser.
Modesty aside I'm one of the smartest guys you could find in my region and definitely competitive at global level given the right resources (zero ain't right) and still haven't made any breakthrough yet. Probably also because it's way more difficult to go from zero to one than from one to infinity.
Anyways, in spite of all my effort so far I'm still not making money so I'd strongly advise you to ignore the advice and thoughts of a loser.
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https://en.wikipedia.org/wiki/Survivorship_bias
This freakin' domain only asks the winners how they did to be that successful and like those aircraft pilots during WW2, they only interview the ones who came back home. And further reinforce their wings (trading capital) since that's where they had some slight problems with the enemy anti-aircraft. The body (research capital, guys like me) don't come back home to tell the story.
This freakin' domain only asks the winners how they did to be that successful and like those aircraft pilots during WW2, they only interview the ones who came back home. And further reinforce their wings (trading capital) since that's where they had some slight problems with the enemy anti-aircraft. The body (research capital, guys like me) don't come back home to tell the story.
I'm talking about automating your strategy. Fo example, your rule says that if your short strike getting challenged, you want to roll the spread. Can you automatically pick "the right" strikes (but not sacrifice your edge)?
This is something that escapes me about you. I see/hear people simply buying calls on pull backs and/or selling bear spreads and seemingly doing fine. So are you making this too complicated or do you have some very specific expectations for your trading systems? Surely you can find some simple edges in the current environment. Or are you not even allowed to trade for some reason? Maybe you are drunk again
Putting it that way, sure, that's one thing I'm looking into. Again, it's not something that's difficult automating in the "send those orders now" way. It's into why the heck would you wanna do that in the first place. To your second question I'm a bit drunk, yes, and based on my recent lectures just wandering why did WW1 strategists (read "generals") keep rolling those trades.
This is something that escapes me about you. I see/hear people simply buying calls on pull backs and/or selling bear spreads and seemingly doing fine. So are you making this too complicated or do you have some very specific expectations for your trading systems? Surely you can find some simple edges in the current environment. Or are you not even allowed to trade for some reason? Maybe you are drunk again
Well, though never officially designated as a quant (maybe not unsurprisingly since I'm the only guy in the country so far with not just the capability of spotting one but actually being one), I'd say our way of thinking is a bit more complex than it first meets the eye. More details on that later.