HowardCohodas Index Options Credit Spread Trading Journal
- Thread starter HowardCohodas
- Start date
- Status
i am personal friends with many floor guys like you say you were. you guys simply traded flow, etc; nothing like a retail 10:1 risk strategy..you know that.
the buy write funds are completely different than what hoco is touting. i've been in this business for 20 plus years and have yet to see one guy earn a living trading his particular strategy; in fact all i have seen are blowups.
have you seen anyone or fund make a living this way?
Since Howard enters into his trades with a directional spread, with a yet undisclosed method for his bullish/bearish bias, and he is not a delta-neutral seller of premium...and his offsets are in a way directional as well (or can be, or can be rolled, with certain rules, discretion, etc. Not yet clear), he cannot yet be lumped into the "premium-seller-newcomer-black-swan-goner crowd".
So his strategy has an outlook on volatility but also direction. This is different than most "iron condor premium seller" threads. I also find his systematic approach / spreadsheet summary very organized. Whether this produces positive expectancy I don't know, but greatly simplifies execution, a big plus imo.
Obviously his strategy has some weaknesses as proven by the early march "4% and bounce inmediately mini-duck". What if the market had dropped 8% and stayed down?.
Let him finish his exposure of the method and results. That's my vote, but time is kind of running out...What is so hard about printing a end of january, end of february, and recent march 21 statement?.
I admit I secretly want his method to work somewhat and help me make a modest 6% per month, instead of his 25%...but I know I'll have to actively manage/hedge the position and continue taking directional shots...
Now I'll continue pricking around and having fun... in other threads!.
So his strategy has an outlook on volatility but also direction. This is different than most "iron condor premium seller" threads. I also find his systematic approach / spreadsheet summary very organized. Whether this produces positive expectancy I don't know, but greatly simplifies execution, a big plus imo.
Obviously his strategy has some weaknesses as proven by the early march "4% and bounce inmediately mini-duck". What if the market had dropped 8% and stayed down?.
Let him finish his exposure of the method and results. That's my vote, but time is kind of running out...What is so hard about printing a end of january, end of february, and recent march 21 statement?.
I admit I secretly want his method to work somewhat and help me make a modest 6% per month, instead of his 25%...but I know I'll have to actively manage/hedge the position and continue taking directional shots...
Now I'll continue pricking around and having fun... in other threads!.
The only reason anyone is giving him a hard time (deservedly so imo) is that he touted his "unique" system that after a few months "live" he is intent on mentoring and selling to "clients". ugh. If he had not been so coy in the beginning with "more will be revealed" I would not have been so turned off. The only reason I've been reading this thread was the off topic conversations
There is nothing special about buying the bid and selling the offer. I was part of the group that killed the crossed-market arb under RAES which forced the inter-exchange link at the OCC. I know who killed it because I have the letter from the OCC that my clearer kindly forwarded to me. My point is that it was the easiest money ever made.
The buy-write funds are trading their mandate; they are there to offer restricted 401Ks the ability to add some optionality to their retirement portfolio. Pensions do it for the same reason. The risk is nothing like that in a garbage vertical at 10:1. Roulette "system" gamblers are methodical as well.
I think you need to read this thread as well as HoCo's thread on trade2win before you start to shoot your mouth off. The guy's backtest was a complete sham, he admitted avoiding periods of 2008 "that didn't meet his entry criteria", so he simply avoided the routine 200-point SPX drops.
I'm still waiting to hear how you would hedge that 25-wide NDX vertical sold at $1.75.
Hello,
I have been following this thread for quite some time. I will probably be downvoted to hell for this, but I trade a very similar method to Howard, but at a much safer strike levels.
I enjoy Howards posts. Like a very slim minority here, I find his posts to be mostly civil, his methods clean, and his trades very well documented (or at least until the black duck). He trades credit spreads far more aggressively than I, however he has come into this whole thing with a pretty open mind.
Is he pushing a product? Maybe. Do I give two shits? Not really.
As for the method on bull/bearish bias, I can speak to a method that Howard might use that I find effective. I have a 30 minute & 1 hour RSI chart running along side the RUT. I can't remember the exact settings it uses. It is the default in ToS. Whenever I get a signal around 75+ or 25-, I will open a credit spread.
For example, between Feb 28 and Mar 8 we had several days of moderate ups and downs. On Mar 7 we had a drop ~20 points and the RUT dipped down to 806. The RSI chart gave a strong indicator. I opened a credit spread that day. When the "black duck" (or whatever we're calling it) came along, the RUT went as low as 775, yet I was still sitting pretty.
Is this also a dumb credit spread trading method? Yep
Will this RSI chart method be successful in every trading scenario? Hell no
But so far so good.
I would like to get more into the scalping/day trading that everyone here rants and raves about, but I don't have a job or lifestyle that affords me to watch the market all the time (and at the moment, my internet connection is total garbage). This style of options trading is a nice trade off between reward and time invested.
Don't drink too much hater-ade.
Happy Trading.
Not everyone traded flow, that was acquired skill. Trading for theo was the basic game plan. You had large positions in every series and strikes, so its hard to break it down. But no, id never just short babies, especially when we never intiated a trade or paid up on our own for something to hedge it. Any signfigant position would require raising the vol or a spread with theo in it. But ive been done for a while.
Buy write funds make thier $$ marketing and taxing 1%. They could care less about their clients. And yes I knew a CTA fund that did almost exactly this. Like everyone insists on professing they blew out in 2008 after about 10 good years.
They key in even what the rocket scientist do today, like vol dispersion, is to know when to put the brakes on, from either reading flow, or change in implieds that suggests weve moved into a different scenario of sorts. There is no such thing as a perfect hedge, and many of the newer and smartest of smart asses heavily into vol disp. blew out in 08 themselves. The wiser ones however that knew enough to recognize when mkt conditions were changing, had their best years ever.
66 was referring to flow as any order hitting the DPM.
I have traded a lot of dispersion (to this day) and nobody blows up in dispersion. It's too capital intensive. It's theoretically achievable with short disp, but I'll bet you can't name one fund that has, other than making some shit up.
Quote from eudaemon:
Since Howard enters into his trades with a directional spread, with a yet undisclosed method for his bullish/bearish bias, and he is not a delta-neutral seller of premium...and his offsets are in a way directional as well (or can be, or can be rolled, with certain rules, discretion, etc. Not yet clear), he cannot yet be lumped into the "premium-seller-newcomer-black-swan-goner crowd".
So his strategy has an outlook on volatility but also direction. This is different than most "iron condor premium seller" threads. I also find his systematic approach / spreadsheet summary very organized. Whether this produces positive expectancy I don't know, but greatly simplifies execution, a big plus imo.
Obviously his strategy has some weaknesses as proven by the early march "4% and bounce inmediately mini-duck". What if the market had dropped 8% and stayed down?.
Let him finish his exposure of the method and results. That's my vote, but time is kind of running out...What is so hard about printing a end of january, end of february, and recent march 21 statement?.
I admit I secretly want his method to work somewhat and help me make a modest 6% per month, instead of his 25%...but I know I'll have to actively manage/hedge the position and continue taking directional shots...
Now I'll continue pricking around and having fun... in other threads!.
There isn't any vol-sensitivity to these positions. He's really selling variance. While it's not a Euro-convention, any risk of assignment would be catastrophic, so it's a de facto realized var expiration trade.
There is no hedge available that does not become the primary risk. Therefore, there is no acceptable hedge to these positions. These are for people that cannot trade direction or vol and therefore build pretty spreadsheets with prob of touch columns. I'd keel over if the guy put something actually useful on there like daily risk at strike.
So many people with so much to say and prove. If you expect people to come in here with bullet proof strategies, this place would not exist. Because there is no such thing. If you expect people to come to the internet and take financial advice from strangers, him or you, everyone would be bankrupt.
This forum is marked "journal", that should be self explanatory. If he is trying to peddle his program somewhere, who cares? And if you are some sort of moonlighting sec under cover, start with the yellow pages if your out to protect the public.
Im done here...except for the 1.75 question. Id sell the call spread for 23.50 back in the day and bank a quarter. And id do that 10 at a time with a 30 min break for Burrito Buggy or Henry's depending on where i was.
Good Day everyone.
This forum is marked "journal", that should be self explanatory. If he is trying to peddle his program somewhere, who cares? And if you are some sort of moonlighting sec under cover, start with the yellow pages if your out to protect the public.
Im done here...except for the 1.75 question. Id sell the call spread for 23.50 back in the day and bank a quarter. And id do that 10 at a time with a 30 min break for Burrito Buggy or Henry's depending on where i was.
Good Day everyone.
- Status