Day trading SPX index options. 100% daily ROI possible?
- Thread starter TraderMontreal
- Start date
I sat this one out. I had done several trades in each of my three accounts on Monday and decided to bail due to the volatility. I had not properly kept track and the Day Trade counter indicated 2 Day Trades and even though that didn't seem right, I trusted it and bailed, which, as always, was a mistake. I'd have made about $680 had I sat on my hands. But try to imagine my surprise when the counters incremented to 4 as each one filled. I wound up the day with a loss of the $500 I'd made on Friday and my Day Trade counters all sitting at 4. Luckily, I did not get flagged but I did not want to risk that so I just sat a watched as the market traded in a channel about 8 strikes wide over the next two sessions; EASY pickings for nice gains to make up for the loss on Monday but. c'est la guerre; I missed out on that.
How 'bout you?
How 'bout you?
I've been known to do that. It just depends on what I think will work for me on any given day. But, generally, two contracts one strike wide will generate a slightly higher ROI that one contract two strikes wide. Two strikes wide can be useful if you think you might be adjusting the trade before it expires. It would allow you to move up or down one strike whereas a contract that is only one strike wide forces you to move at least two strikes. But it is better to avoid adjustments altogether. The are costly and, in my personal experience, not necessary, if you've set the trade up properly to begin with. With a track record of being 100% WRONG when it comes to adjusting a trade, I can say that with a fairly high degree of certainty. In every single instance, had I simply held the position I took when I entered the trade, I'd have made money. I've either lost or made considerably less on every one that I've adjusted.
Theoretically yes, but such trader would quickly run into liquidity issues (even in the almighty Forex market).
The real question is over what time span? Virtually ANY legitimate investment will generate a 100% ROI given sufficient time. A careful, informed and skilled trader can easily make 100% on a single trade when the correct set of circumstances appears and (s)he is ready and positioned to act upon it. Even an unskilled trader can swerve into such opportunities once or even more than once in a lifetime.
But making 100% EVERY day, day in and day out, over a long period of time is nigh onto impossible. Trading options requires that you maintain a balance that covers any potential loss so that money, typically between two and five times the amount of the potential return, prevents that 100% ROI from being achievable on a single trade or even a single day on multiple trades. But over a longer span of time, certainly within a year, and even, potentially, within a week, it is achievable but not sustainable.
But making 100% EVERY day, day in and day out, over a long period of time is nigh onto impossible. Trading options requires that you maintain a balance that covers any potential loss so that money, typically between two and five times the amount of the potential return, prevents that 100% ROI from being achievable on a single trade or even a single day on multiple trades. But over a longer span of time, certainly within a year, and even, potentially, within a week, it is achievable but not sustainable.
So far, up just under a grand.
Today was a nail-biter though. I determined, to the best of my ability, support at 2970 and resistance at 3035 and entered my shorts just beyond those at 2975 and 3040 in an Iron Condor in each of my three accounts at about 10:45. By noon it has blown through the support level, rebounded and then moved up to about the mid-point. Then, starting at about 2:00 began to climb like a homesick angel. The bell rang as it crossed 3036.
But when it broke through the floor almost right out of the chute,
I just logged out and told my wife that I needed to get out of the house so we spent the afternoon running errands. I was sitting in the parking lot at the grocery store when the markets closed. I had no data signal and didn't know until I got home that I had had a successful day.
After today, I cannot believe that the IV ranking for SPX is a mere 29.5.
How has your week gone so far?
Today was a nail-biter though. I determined, to the best of my ability, support at 2970 and resistance at 3035 and entered my shorts just beyond those at 2975 and 3040 in an Iron Condor in each of my three accounts at about 10:45. By noon it has blown through the support level, rebounded and then moved up to about the mid-point. Then, starting at about 2:00 began to climb like a homesick angel. The bell rang as it crossed 3036.
But when it broke through the floor almost right out of the chute,
I just logged out and told my wife that I needed to get out of the house so we spent the afternoon running errands. I was sitting in the parking lot at the grocery store when the markets closed. I had no data signal and didn't know until I got home that I had had a successful day.
After today, I cannot believe that the IV ranking for SPX is a mere 29.5.
How has your week gone so far?
J
JBuck
Good advice.
J
JBuck
J
JBuck
Wait a minute. After all the nonsensical BS you have posted on this chat group your telling us you don't have the enough capital to trade with in order to comply with FINRA rule 4210 (the PDT rule)? You're right, you are definitely not "...A QUALIFIED INVESTMENT ADVISOR."
You might want to consider selling 2-3 strike wide credit spreads on the SPY. Much better suited for small accounts like yours.
Best