You seem to be very familiar with the clip. Would you please post the link? Risk management is very important with this type of strategy. On the analyze tab in TOS, I am looking at 7 price slices, with the top slice being up 15% and the bottom being down 20%. The goal is to keep the resulting net liq above the margin requirements at those levels.
Karen the Supertrader - TastyTrade Hybrid Experiment
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So can you tell us the outcome of the experience?Also what is your expected annual return?
About the link to the interview, I think there are actually 3, all on Youtube, really easy to find...
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The yahoo group has been a wonderful experience. We have two main posters, Tom and Keith. They have developed their own individual strategies and they are very different. They are both very successful traders. If covered calls and cash covered puts is your strategy, best wishes. This hybrid strategy is just a test. I think it's worthwhile to see how it performs, don't you? If you have no interest in how such a strategy performs, we will certainly miss your input on this thread.
The goal is to collect theta of 100 - 150 per day. Hopefully, that would result in a goal of between 25% to 36.5% per year if all works out.
Since you are selling more puts than calls in an environment where vols look to be increasing and market has been possibly tipping over, you might see how well this system does under pressure. As I am sure you are aware, one of those trades popping against you will simply wipe out all your gains. Basically the vanilla selling premium on the indexes which is not reinventing the wheel per se. Always works well in a choppy market like we have had for last two months.
Also, I could never follow a model from someone who claims to be a "Supertrader" and then pushes a strategy basically known to every option trader. Hyper marketing always raises red flags making the strategy seems safer and easier than it appears.
Just raising some obvious caution points from someone who did ICs on the indexes for years and got out well before volatility exploded.
Also, I could never follow a model from someone who claims to be a "Supertrader" and then pushes a strategy basically known to every option trader. Hyper marketing always raises red flags making the strategy seems safer and easier than it appears.
Just raising some obvious caution points from someone who did ICs on the indexes for years and got out well before volatility exploded.
thanks
Agree with OP, selling the puts isnt best, howsoever selling them on VIX in conjuction with calls on index at this day and age interesting
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Thanks for your input. I hope you realize that I am NOT a Supertrader. I know absolutely nothing. Also, this is a hybrid approach. I, unlike Karen, am not selling two outs to one call on a regular basis. Karen does not look at her delta. I am looking at delta. My "vanilla" approach is not trying to recreate the wheel. What may well be known to you may be entirely new to me. So feel free to follow along as I eventually wipe out all of my gains.
1. She never said that. The Tasty Trade guys called her like that for PR purposes.
2. Then there should be plenty of HFs with the same performance records.
I think what makes her different is the implementation of the strategy.
I don't think you can get that much without portfolio margin. Did the guys in the Yahoo group got 25+%?
Projecting your 6 weeks performance, you can expect a ~14% return...
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I know that Tom in our group is exceeding 25% if memory serves me right. I think Keith was up around 20% last year. I would have to go back through our discussions to verify. They regularly post their trades and results.
In starting this test account, I had to rev up in the beginning and start slow and gradually build up the account. I couldn't start with one big trade just to get my theta up to my target. My current theta is at 112 so I'm just now getting in the sweet spot. As you can see from my log, I only have 9 opening trades.
Don't understand your point #2, hedge funds have nothing to do with this. Selling premium against the index is nothing new, it all comes down to the implementation which is true of anything so we are just saying The sky is blue.
But her claim to take $10k to $41 million in 3 years screams of highly suspect to me... How do you make that return using a limited profit strategy during years of intense volatility. Story does not add up does it? Evne with the claim of portfolio margin she started with $10k so could not use it to start. Also portfolio margin does not allow for millions of dollars in leverage when you have very bad R:R strat.
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