Let's talk about our returns. Got any?
- Thread starter Adamoptions
- Start date
I guess I'm fairly new to options trading, having been at it for 2.5 years or so.
First half year, just messing around so that I could learn - probably made $5k.
Second (first full) year - probably made $12k
This year - messed around with a strategy that didn't work in the first quarter. Since then I've decided to just make money however I can. I've consistently made $6k/month for the past five months which is about a 40% annualized yield.
Next year - I expect to make $10k/month.
In regard to strategies, well I use many of the standard option trades that everyone else uses. I also "make up" a lot of weird looking trades. I do whatever it takes to make a profit, long or short, up, down or sideways.
I know the next question is how am I doing this? Well, first of all I can't tell you exactly. I make all kinds of trades and wrote a computer program to evaluate them (which took weeks of solid programming time & is a work in progress). Second, I can't tell you because the trades I make fit my personality & risk/return profile. YOU have to figure out the trades that YOU like, not someone else's or some "guru's" trades.
Lastly, no I don't do this for a living. I have a regular job as a project manager. I make most of my trades while at work, but I work through lunch and at home to make up the 15 minutes I spend per month placing my trades while I should be working!
First half year, just messing around so that I could learn - probably made $5k.
Second (first full) year - probably made $12k
This year - messed around with a strategy that didn't work in the first quarter. Since then I've decided to just make money however I can. I've consistently made $6k/month for the past five months which is about a 40% annualized yield.
Next year - I expect to make $10k/month.
In regard to strategies, well I use many of the standard option trades that everyone else uses. I also "make up" a lot of weird looking trades. I do whatever it takes to make a profit, long or short, up, down or sideways.
I know the next question is how am I doing this? Well, first of all I can't tell you exactly. I make all kinds of trades and wrote a computer program to evaluate them (which took weeks of solid programming time & is a work in progress). Second, I can't tell you because the trades I make fit my personality & risk/return profile. YOU have to figure out the trades that YOU like, not someone else's or some "guru's" trades.
Lastly, no I don't do this for a living. I have a regular job as a project manager. I make most of my trades while at work, but I work through lunch and at home to make up the 15 minutes I spend per month placing my trades while I should be working!
Firstly, congratulations on your success.
Some time ago I had come to the conclusion that being able to consistently make money on options was highly unlikely for two reasons:
1) the wide bid-ask spread immediately puts you in the red after getting into a position.
2) most equity options are rather illiquid so the person taking the opposite side of my trade is the market maker, a consummate options professional, who also has control of the price of the option by making volatility adjustments. It's not likely I can compete effectively against him.
So I have a number of general questions:
1) Do you trade equity options, (cash) index options or futures options?
2) Do you primarily buy calls or puts or trade spreads?
3) Are you a net buyer or seller of options?
4) Do you use any options service, like Optionetics, where one can search for over/under-priced options?
5) Is you success due to some ability to match market conditions with an appropriate option's strategy?
6) What is your typical holding time?
Sorry for all the questions but I personally have no idea how I can make money consistently with options.
Richard
1) Exclusively equity options, but I've seen some of the trades I've structured described in articles about trading in other equity markets.
2) I make all of those trades and more including arbitrage and synthetic trades, & can't say that I favor one over the other.
3) On a net basis I guess I'm a seller, but trades can be structured in lots of ways by buying and selling so I guess I'm not sure that matters (to me).
4) No, I don't use a service but as part of my evaluation I do look at the option's value.
5) Yes, I'm sure that this is part of the success. However, it's not explicit i.e. I don't try to do this but as the market changes different trades fit my profile and I make those trades.
6) Probably from one day to four months.
Yes, I sell naked on occassion but only if it fits my risk/return profile.
I know a guy who makes tons of money a day. He learned it form a ex cboe floor trader who had 20yr of not one losing month. The guy has a feel for the markets. No real technical analysis per say. He does advanced gamma scalping type of trading. Not much volatility playing (like optionetics). He makes 5-10K a day all of the time. He trades using a 100k account for aggresive trading. All of the profits each month goes to a safer type of account which is always hedged. He trades usually the index options. I think he makes money because he has big balls and alot of savings to fall back on (he's an ex software ceo type). But he only trades part of the account crazy like (which is important). The rest is always hedged to the tee. This guy made close to 1 million before 0ct11 2001 because of 9/11. (within one month he was just way aggressive.) So it can be done. It's just that lots of people try to do the non directional trades like butterflys, or stradles, strangles etc. It's alot of the trying to make free money with no work routine. This guy works his ass off. He's always studying etc. But remember that options are a difficult game. Because of the endless possiblities of positions people forget where the market is sometimes.
P.S. I made money in options early on when I used to trade them. I just bought a couple of cheap options for hedging. Then when I'd get out of my futures position I'd just keep the options because they were so cheap. Lots of time though give 1-2 months they'd go from $200 to $2,000. Lots of luck I grant you. But I just traded off of big support and resistance levels and no real indicators. Hope this helps.
P.S. I made money in options early on when I used to trade them. I just bought a couple of cheap options for hedging. Then when I'd get out of my futures position I'd just keep the options because they were so cheap. Lots of time though give 1-2 months they'd go from $200 to $2,000. Lots of luck I grant you. But I just traded off of big support and resistance levels and no real indicators. Hope this helps.
Yes. Got it. Pretty good. Thank you.
