Im shorting Goog on Monday

Quote from krazykarl:

Simply put, it correlates price-action/volume of the equity with the action in the option chain for a specific time horizon. It attempts to identify what I call 'inflection points' in the chains and uses mutiple algorithms to confirm and exploit the action. The core is a general bias in the data it analyzes: I give it 2 inputs: the issue(GOOG in this case) and a bias(down in this case) and it does the rest. You read that right: it's not totally automated: just the trade executions are. The human, me, still tells it which direction to look.

It's 100% Java - my favorite language.



Kind Regards,


edit: a little more info. the distribution is 50% near-month, 20% point1, 20% point2 and 10% point3. The system will roll the contracts every month if the near-month gets too close to expiration and is otm or close the trade if it's itm and roll to the next month.
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what is an 'inflection' point in your case? does it factor in volatility against historic levels, earnings IV inflation, etc? If you have to indicate a bias, that doesn't sound much like more than an order management progam. what about distribution -- are you trying to say you have a custom distribution vs black scholes (which uses cum. norm dist)?

i'm curious about execution ... do you plug into the IB API?
 
Quote from scriabinop23:

what is an 'inflection' point in your case? does it factor in volatility against historic levels, earnings IV inflation, etc? If you have to indicate a bias, that doesn't sound much like more than an order management progam.
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An inflection point is essentially an Algebraic Group representing the range of some of the algorithms.

Yes, it looks at the greeks. No, it does not look at historical data.

I made it take a bias(boolean) as an input because when I was swing trading I always lost my ass on the short side but did decent going long. I tried to figure out why.

I started analyzing datasets last year and found that there are _many_ similarities between bull and bear moves. The identification, in my case, was nearly identical but the behavior after a condition was met was different. So I would see a correct setup, but it would always go against me.

In the systems I started playing with pattern recognition and found the software was making the same mistakes I made because it was trying to exit at the wrong times due to the tape after the trade was opened. Instead of letting it try to decide which way to go, I decided that based on human fundamental analysis a bias input would be useful.

Time will tell how well this works.

Yes, using TWS.



Regards,
 
Quote from kinggyppo:

long GOOG $517.89 tight stop.
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Good call - I think you will however get stopped out today.

Most of the firms are ball-less, but I do expect 1-2 more downgrades in the coming weeks.


Best Regards,
 
Quote from krazykarl:

Good call - I think you will however get stopped out today.

Most of the firms are ball-less, but I do expect 1-2 more downgrades in the coming weeks.


Best Regards,
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Good trade, thanks for the info about your system sounds really interesting. Yeah, I am mostly a scalper so this was intra day scalp long. A long trade for me is 1/2 hour. Good trading.
 
There is a pattern I am watching here. If it doesn't hold than it may break $500.00 I am sure a lot of shorts are looking for a home run. :)
 
IT will break 500, I dont know why this is so hard to understand to some investors, but once it drops below 500 I see more than a 95% chance it goes to fresh 52 week lows.


The MSFT/YHOO news is not good at all for google.
 
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