Did you have something to say? It looks like you just took my previous post and added no comment?
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DITM Options Long(Paper Journal)
- Thread starter MoneyMatthew
- Start date
If agree that I am taking a hit on going with DITM Options. I don't really believe in a true expectancy for trading. I believe in Profit Factor/Ratio. Expectancy is great for static variables or casino games. I could trust Expectancy if I were an options seller with a hedge since max profit is known and taken from the start of the trade. The credit you get from an options sale is max profit up front.
I am using "expectancy" data from the underlying. Yeah I no doubt am taking a huge hit due to the bid/ask spread. I don't think you are trading a similar pattern to me, I built a custom ranking algo to screen my trades. I am basically doing this journal to see how well it is at picking market direction. It is not really a journal about options, heck I could switch to trading the underlying and I would still get the same exact signals.
I am using "expectancy" data from the underlying. Yeah I no doubt am taking a huge hit due to the bid/ask spread. I don't think you are trading a similar pattern to me, I built a custom ranking algo to screen my trades. I am basically doing this journal to see how well it is at picking market direction. It is not really a journal about options, heck I could switch to trading the underlying and I would still get the same exact signals.
expectancy=(prob of win x ave win) - (prob of loss X ave loss). This needs to be positive no matter what instrument you are trading.If agree that I am taking a hit on going with DITM Options. I don't really believe in a true expectancy for trading. I believe in Profit Factor/Ratio. Expectancy is great for static variables or casino games. I could trust Expectancy if I were an options seller with a hedge since max profit is known and taken from the start of the trade. The credit you get from an options sale is max profit up front.
I am using "expectancy" data from the underlying. Yeah I no doubt am taking a huge hit due to the bid/ask spread. I don't think you are trading a similar pattern to me, I built a custom ranking algo to screen my trades. I am basically doing this journal to see how well it is at picking market direction. It is not really a journal about options, heck I could switch to trading the underlying and I would still get the same exact signals.
The super wide bid/ask spread is just a contributing factor hurting your chances.
No argument here on the wide bid/ask hurting my profitability. This is mainly about picking direction on individual stock names and I will need to be right a lot.
Unlike many wizards here on ET I am publicly posting directional bias and trades. It is ultimately an unproven system that is guilty until proven innocent. Even if the bid/ask eats me alive I already know that is has a positive expectancy trading the underlying.
Unlike many wizards here on ET I am publicly posting directional bias and trades. It is ultimately an unproven system that is guilty until proven innocent. Even if the bid/ask eats me alive I already know that is has a positive expectancy trading the underlying.
Well if you already know or think you know, that you have a positive expectancy on the direction of the UL (which is not easy to do over a large sample) and the options are just to add leverage you should have no problem. look forward to reading your posts.No argument here on the wide bid/ask hurting my profitability. This is mainly about picking direction on individual stock names and I will need to be right a lot.
Unlike many wizards here on ET I am publicly posting directional bias and trades. It is ultimately an unproven system that is guilty until proven innocent. Even if the bid/ask eats me alive I already know that is has a positive expectancy trading the underlying.
I don't disagree with you sss12, you are 100% right. I don't want to inspire anyone to trade DITM Options just for the heck of it. The bid/ask spread that sss12 speaks of is brutal and can easily kill any edge. I probably should have named this journal "A Guy Picks Market Direction".
Time to add a new position. This one came up on the scanner a few days ago and I am late to the party on this one.
WDR
Buy-to-Open 1 December 16th 2016 [$20.00 PUT] @ $4.60 [10/31/2016]
underlying price=$15.77
WDR
Buy-to-Open 1 December 16th 2016 [$20.00 PUT] @ $4.60 [10/31/2016]
underlying price=$15.77
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Current positions:
TCK
Buy-to-Open 1 November 18th 2016 [$13.00 CALL] @ $7.40 [10/20/2016]
ADSK
Buy-to-Open 1 November 18th 2016 [$65.00 CALL] @ $6.85 [10/20/2016]
WDR
Buy-to-Open 1 December 16th 2016 [$20.00 PUT] @ $4.60 [10/31/2016]
Current P&L=+$365.00
TCK
Buy-to-Open 1 November 18th 2016 [$13.00 CALL] @ $7.40 [10/20/2016]
ADSK
Buy-to-Open 1 November 18th 2016 [$65.00 CALL] @ $6.85 [10/20/2016]
WDR
Buy-to-Open 1 December 16th 2016 [$20.00 PUT] @ $4.60 [10/31/2016]
Current P&L=+$365.00
TCK is holding up well on down market day like today, it is still going up today. I'm going to give ADSK one more week. If things don't improve then I will look to scratch or take a loss on ADSK.
I nailed the timing on WDR, it is down 3% after I had a Short Bias yesterday. Unfortunately, the options have barely moved. The Bid/Ask is a mile wide on the DITM options. I will need WDR to hit $13 on the underlying to really see a profit. With the 40% Implied Vol on WDR I hope to see $14 within a week or so. If that does not happen then I will look to exit that as well.
I nailed the timing on WDR, it is down 3% after I had a Short Bias yesterday. Unfortunately, the options have barely moved. The Bid/Ask is a mile wide on the DITM options. I will need WDR to hit $13 on the underlying to really see a profit. With the 40% Implied Vol on WDR I hope to see $14 within a week or so. If that does not happen then I will look to exit that as well.