Is selling options before earning Good Strategy?

[Kim Klaiman]

So why can't you include 2%/ month and calculate CAGR.

Actually this is exactly what we do. Again from the performance page:
"SteadyOptions Returns based on 10% allocation and exclude commissions. CAGR includes commissions."

I don't know if you have really traded in trading account or just paper trading, even without the ticket fee it makes big difference, if one trades mini contract and normal contract size. Trading SPY and SPX or Amazon mini vs regular option contract is different.

I do real trading, not paper trading. And no, there is no difference in terms of commissions if you don't have ticket fee. You can do 10 SPY contracts in 10k account or 100 spy contracts in 100k account. Percentage wise, commissions will be the same. Unless I'm missing something - please educate me!

Reasonable people can verify results much more easily from verified fundseeder or collective2 or audited data, than going through screen shots taken from paper trading accounts where fills are not representative.

Again, not paper account, real account.

Lets not hijack the topic anymore. If you don't like it, don't join. What's the problem?

 

[srinir]

You can do 10 SPY contracts in 10k account or 100 spy contracts in 100k account. Percentage wise, commissions will be the same. Unless I'm missing something - please educate me!

I thought it should have been clearer for traders who generate 100% return year after year.

10 SPY vs 1 SPX, 10 mini Amazon vs 1 regular contract. 10 times the commission vs one commission. Dollars (and %ge) spent on commission should be higher. (B/A spread slightly worse for SPX compared to SPY, but still will come out better, not to mention section 1256 treatment of SPX. AMZN mini vs AMZN regular no contest)

Again, not paper account, real account.

How does one know?

Lets not hijack the topic anymore.

You are the one who started with "verified" trades, I am just asking for the proof.

If you don't like it, don't join. What's the problem?

I really want to generate 100% return year after year, joining your forum and then just copy your trades. Just wanted to make sure whether it is legit or not

 

[Kim Klaiman]

10 SPY vs 1 SPX, 10 mini Amazon vs 1 regular contract. 10 times the commission vs one commission. Dollars (and %ge) spent on commission should be higher.

Of course, but this is not the point. How is it relevant to your account size? In 10k account, you can still do 1 SPX and not 10 SPY. The only case where it could be relevant is if you trade straight options, SPX could be too expensive for 10k account, so you would need few SPY contracts. Since we trade spreads only, they usually don't exceed our allocation size, so we can do 1 spread in 10k account or 10 spreads in 100k account. Really no difference in terms of commissions.

I really want to generate 100% return year after year, joining your forum and then just copy your trades. Just wanted to make sure whether it is legit or not

If you want to continue this discussion, you can PM me or Contact Us.

 

[srinir]

Yes it does.

Not everything scales 1:10. Suppose you do 5 AMZN spreads in 100k acct, then it will be 1 spread for 20k account holder or 5 mini AMZN options for 10k account holder. Here in this case 10k account holder is spending 5 times the commission as 20k account holder.

If you want to continue this discussion, you can PM me or Contact Us.

Nah, I am looking for reputed verifiable outfit.

 

[Kim Klaiman]

Yes it does.

Not everything scales 1:10. Suppose you do 5 AMZN spreads in 100k acct, then it will be 1 spread for 20k account holder or 5 mini AMZN options for 10k account holder. Here in this case 10k account holder is spending 5 times the commission as 20k account holder.

Our alerts apply to 10k account, and members with larger accounts scale up. So it doesn't really apply to us, and cases you mentioned are fairly rare anyway. Generally speaking, if you have no ticket fee, the commissions have similar effect on 10k account and 100k account.

Nah, I am looking for reputed verifiable outfit.

Sure. You wouldn't pass our acceptance test anyway. Your whole goal was mocking and bashing.

Show me a hater & I'll show you a loser. Every Single Time.

 

[srinir]

No hater, just doing due diligence and did not want to get scammed.

If you look at my previous posts, I have 10% allocation to short vol. and was planning to move 5% of that allocation away from short vol because this strategy is long on tooth. Your strategy from what you describe is long vol. When you diversify short vol with long vol. strategy with 80%+ CAGR, it is like ATM machine.

https://www.elitetrader.com/et/thre...t-index-investing.297648/page-10#post-4530163

I looked at long volatility hedge funds over the same periods (mid 2011 till now), their performance stinks over the same period.

 

[Kim Klaiman]

No hater, just doing due diligence and did not want to get scammed.

If you look at my previous posts, I have 10% allocation to short vol. and was planning to move 5% of that allocation away from short vol because this strategy is long on tooth. Your strategy from what you describe is long vol. When you diversify short vol with long vol. strategy with 80%+ CAGR, it is like ATM machine.

https://www.elitetrader.com/et/thre...t-index-investing.297648/page-10#post-4530163

I looked at long volatility hedge funds over the same periods (mid 2011 till now), their performance stinks over the same period.

View attachment 179294

Straddles are long vega. But pre-earnings straddles are very special animals, not like other long vega positions. And straddles are only part of our portfolio (usually around 20-30%). The rest are calendars, iron condors, diagonals, butterflies etc. We like to have a balanced portfolio with positions that hedge each other in terms of the Greeks. We trade pure short volatility positions as well (SVXY and VXX).

ATM machine? Not at all. A lot of hard work, backtesting and community of experienced traders who supports each other. Many of our current strategies actually were suggested by our members.

And this is what some people are missing: instead of nitpick our performance, our members concentrate on learning and sharing resources and ideas.

Our performance reporting is among the most honest and transparent in the industry (read
Calculating ROI In Options Trading for details), but I know we cannot satisfy everyone. Being skeptical and doing due diligence is always good (considering all the scammers in this industry), but you are barking on the wrong tree. If you spent few minutes on our website, you would probably knew that.

 

[srinir]

Straddles are long vega. But pre-earnings straddles are very special animals, not like other long vega positions.

What do you mean by special animals? Do you have any academic studies supporting this premise?

I know more about post earnings drift than pre-earnings drift and there are many academic papers supporting this.
http://people.brandeis.edu/~heidifox/ese.pdf
See Richard Sloan (my prof) post-earnings drift rate in his book

The rest are calendars, iron condors, diagonals, butterflies etc. We like to have a balanced portfolio with positions that hedge each other in terms of the Greeks.

Looks like hodge-podge of strategies and positions. I prefer the fund or trading desk to have clear mandate. Investors can diversify themselves based on their asset allocation. Probably some investors prefer this, good for them.

Could you break down by %ge of portfolio with long and short weighted vega and delta bets? Probably i can create synthetic index and find out where the alpha's are coming from when i have time?

What is your leverage ratio?

We trade pure short volatility positions as well (SVXY and VXX).

I am not interested in this one. I have already have similar strategy exposure.

ATM machine? Not at all.

When i meant ATM machine, short vol strategy has consistent alpha until nasty surprise. If i combined this with long vol. strategy with 80% alpha , then my portfolio is no loose position whether long or short vol. No?

A lot of hard work, backtesting and community of experienced traders who supports each other. Many of our current strategies actually were suggested by our members.

Good for your forum and members. I am all for the proverbial retail trader who can overcome market after spending 24% per year transaction and hurdle cost

 

[Kim Klaiman]

What do you mean by special animals? Do you have any academic studies supporting this premise?

By special animals I mean not normal straddles where in most cases negative theta wins. This strategy was described in an excellent book by Jeff Augen, “The Volatility Edge in Options Trading”. I don't need any academic studies, our track record speaks for itself.

Could you break down by %ge of portfolio with long and short weighted vega and delta bets?

That really depends. Different periods different allocations.

What is your leverage ratio?

We have around 40% of the portfolio in cash on average. Since all positions are non-directional, there is no leverage.

 

[srinir]

We have around 40% of the portfolio in cash on average. Since all positions are non-directional, there is no leverage.

What? 80% CAGR without any leverage. Kudos to you