Destriero - Butterfly Trades

[ironchef]

The drift upward comes attached with variance on the way there.

Does variance mean scatters or is it a precise statistical term?

Also,

For example, I was neutral/bearish coming into 4/19 week.

I placed 12 flies in single names and ETF’s.

most of the flies were opened ATM, or slightly lower than ATM.

9 of the 12 were profitable.

2 of the 3 losses were profitable all week, and on expiration day spot moved a bit away from the bodies rendering them small losses.

of course the overall direction of the market will have a huge affect on your single name flies, thus why it’s important to predict/bias the SPY, QQQ, IWM, DIA, firstly... then dig into the single names

I don't look at market direction when placing the body on single names, just from their own information, like charts....

I have not scaled up, so far only a couple of flies a week.

 

[.sigma]

Var = vol = magnitude

 

[ironchef]

1 SD from belly.

Fooled by randomness. Or fooled by a raging bull market.

Tried to manage losers in the beginning but gave up and let it played out. If profit target was not met, let it expired. In those cases many expired with a profit.

Update: Two more flies, both losers.

Conclusion: It looks more and more like randomness + bull market rather than skills.

What next: Unwind all my trading positions and retire from trading. Like a lucky gambler, I should not push my luck any further and should quit while I am ahead.

I had a great run starting from 2009 until today. The only negative year was 2011. Investable capitals have gone up so much I don't need any more money.

ET has been a great help and I wish all of you the very best.

 

[longandshort]

Update: Two more flies, both losers.

Conclusion: It looks more and more like randomness + bull market rather than skills.

What next: Unwind all my trading positions and retire from trading. Like a lucky gambler, I should not push my luck any further and should quit while I am ahead.

I had a great run starting from 2009 until today. The only negative year was 2011. Investable capitals have gone up so much I don't need any more money.

ET has been a great help and I wish all of you the very best.

What makes a good trader good is their ability to stay focused on the trade. It makes sense to take a break when you feel distracted. However, based upon your record, I would say you probably have skill. Where you could improve is by figuring out a way to hedge out underlying beta. For example, butterfly’s pinning expected variance between your single name and a benchmark (or a pair). Another example would be managing your trade to keep it profitable (adjusting a wing, etc.).

 

[qlai]

ET has been a great help and I wish all of you the very best.

Is this goodbye?

 

[caroy]

What makes a good trader good is their ability to stay focused on the trade. It makes sense to take a break when you feel distracted. However, based upon your record, I would say you probably have skill. Where you could improve is by figuring out a way to hedge out underlying beta. For example, butterfly’s pinning expected variance between your single name and a benchmark (or a pair). Another example would be managing your trade to keep it profitable (adjusting a wing, etc.).

congrats on your successful run

 

[easymon1]

I don't need any more money.

Congrats.
Let us know what you do with your newly freed up Time.

 

[.sigma]

Update: Two more flies, both losers.

Conclusion: It looks more and more like randomness + bull market rather than skills.

What next: Unwind all my trading positions and retire from trading. Like a lucky gambler, I should not push my luck any further and should quit while I am ahead.

I had a great run starting from 2009 until today. The only negative year was 2011. Investable capitals have gone up so much I don't need any more money.

ET has been a great help and I wish all of you the very best.

the virtuous man has spoken

I wish I could lose on two flies and retire lol

 

[BeautifulStranger]

Update: Two more flies, both losers.

Conclusion: It looks more and more like randomness + bull market rather than skills.

What next: Unwind all my trading positions and retire from trading. Like a lucky gambler, I should not push my luck any further and should quit while I am ahead.

I had a great run starting from 2009 until today. The only negative year was 2011. Investable capitals have gone up so much I don't need any more money.

ET has been a great help and I wish all of you the very best.

Compare the following payoff matrix of a bullish structured iron condor to owning the underlying. The right most % column represents the return on the underlying for a given price. The other numbers represent the estimated return on maximum risk for the iron condor based on price and date:

http://opcalc.com/ue9

Notice the leverage, the profit range, and the fact this is a defined risk trade. My guess is you could find a way the make options work for you if you really wanted to.

In any event, best wishes to you.

 

[.sigma]

Compare the following payoff matrix of a bullish structured iron condor to owning the underlying. The right most % column represents the return on the underlying for a given price. The other numbers represent the estimated return on maximum risk for the iron condor based on price and date:

View attachment 258238
http://opcalc.com/ue9

Notice the leverage, the profit range, and the fact this is a defined risk trade. My guess is you could find a way the make options work for you if you really wanted to.

In any event, best wishes to you.

youre giving this advice to a guy who’s had 11 of the last 12 years in the green.