Long-scalping equity options against time decay and market drift

[fullautotrading]

By that I mean, closing out short leg winners and letting longs run naked into EOY for the potential santa rally?

The "longs" are still PUTs here (we only have PUT options). So well, if there is a (negative) "santa rally" towards a very low price like 2700 or so, we are going to break the bank and shutdown everything

(But it's a very very slim, extraordinary, possibility )

 

[Overnight]

The "longs" are still PUTs here (we only have PUT options). So well, if there is a (negative) "santa rally" towards a very low price like 2700 or so, we are going to break the bank and shutdown everything

(But it's a very very slim, extraordinary, possibility )

Well, I cannot fully comprehend what you are doing still, because you options peeps are crazy. But if you are sitting on ~340K profit, but are waiting for the ES to break the bank by sinking to 2700, then I would suggest you GTFO now, enjoy your profits, and start fresh. Because the chances of ES dropping to 2700 from here is zero.

As for what all the other ETs want you to do? Who cares! I want to see all ETers in profit, and if you have a chance to get out in profit, TAKE IT! My lord, it is so refreshing to see an ETer in profit, especially you, which seems to have a well-though-out system of layering FOPs. Haven't seen that before.

Make it count. Make the monies, Lebowski!

 

[fullautotrading]

... My lord, it is so refreshing to see an ETer in profit, especially you, which seems to have a well-though-out system of layering FOPs. Haven't seen that before.

Make it count. Make the monies, Lebowski!

Thank you so much Overnight, it means a lot to me to hear such words


Let's see the current situation. ES is sitting around 4000:

ES FUT 202303 CME 50 E-mini S&P 500 [ESH3, 495512572, mult: 50]

and we are happily scalping our options (67 layers, using 69.7% of funds). PnL is currently at 344K, 21K in commissions (we started 302 days ago with 2M):

This is the situation of all layers:

as you know well at this point, the "red" layers (-15K, -21K, -23K) are part of the "protective structure", which we introduced as a form of "insurance" (a possible source of "extraordinary" profits.

Of course, one could do even without, taking greater risk. But I would not suggest it.

 

[Overnight]

...

and we are happily scalping our options (67 layers, using 69.7% of funds). PnL is currently at 244K, 21K in commissions (we started 302 days ago with 2M):

View attachment 300449

This is the situation of all layers:

View attachment 300450

as you know well at this point, the "red" layers are part of the "protective structure", which we introduced as a form of insurance (a possible source of "extraordinary" profits.

Of course, one could do even without, taking greater risk. But I would not suggest it.

So you just happily gave up ~100K in unrealized profits dancing around. This is not encouraging news. A week ago you were at 320K unrealized. Now you are at 244-21K. At the rate you are going, you are going to go negative for the year. Why did you not take the 320K like I suggested? You just playing this like a damned game? It is becoming unfun.

 

[fullautotrading]

So you just happily gave up ~100K in unrealized profits dancing around. This is not encouraging news. A week ago you were at 320K unrealized. Now you are at 244-21K. At the rate you are going, you are going to go negative for the year. Why did you not take the 320K like I suggested? You just playing this like a damned game? It is becoming unfunny.

haha, thank you Overnight !

That was a typo: I meant to write 344K (fixed now), as you can see from the PnL chart that has not changed much. Fortunately, you caught it anyway!

There is usually no convenience to stopping the game and restarting because that implies a loss of trading information.

Clearly, if one is happy with the profit, one can obviously close and restart anytime, but let's say that, in theory, it does not increase the long-term return of the strategy.

 

[Overnight]

haha, thank you Overnight !

That was a typo: I meant to write 344K (fixed now), as you can see from the PnL chart that has not changed much. Fortunately, you caught it anyway!

There is usually no convenience to stopping the game and restarting because that implies a loss of trading information.

Clearly, if one is happy with the profit, one can obviously close and restart anytime, but let's say that, in theory, it does not increase the long-term return of the strategy.

*whew* K, that is better. No more typos for j00, one year!

No more heart attacks on your profit typos!

 

[fullautotrading]

*whew* K, that is better. No more typos for j00, one year!

No more heart attacks on your profit typos!

hmm, I just wanted to see if my spectators were paying attention

Jokes apart. I give a lot of importance to the concept of "trading information", I usually avoid starting to talk about this argument because I may run the risk to sound like an alien to many who trade.

In my treatment, anyway, conceptually, what I call "trading information" is absolutely central to creating an edge.

To me (and just to me), "realizing" a loss = loss of the associated "trading information"

I will stop here, not to become too philosophical, at this time of the day, and after a gym session

 

[Overnight]

hmm, I just wanted to see if my spectators were paying attention

Jokes apart. I give a lot of importance to the concept of "trading information", I usually avoid starting to talk about this argument because I may run the risk to sound like an alien to many who trade.

In my treatment, anyway, conceptually, what I call "trading information" is absolutely central to creating an edge.

To me (and just to me), "realizing" a loss = loss of the associated "trading information"

I will stop here, not to become too philosophical, at this time of the day, and after a gym session

Dude, the fack you talking about "edge"? You do not "have" an edge, you are actually making your own edge. This FOP-layering you are doing? That is high-level shit that only the likes of destriero could follow.

I desperately try to understand the nuances but for whatever reason, my brain repels options in all forms. It sux, lol!

The 4K directional loss I am going to take on the Dec MNQ long is gonna' hurt, and I know I could have mitigated it with a FOP somehow if I understood WTF it was all about.

There is no edge to give away, there is simply an edge to create. And you have created it. Your edge is KNOWLEDGE.

 

[destriero]

So you just happily gave up ~100K in unrealized profits dancing around. This is not encouraging news. A week ago you were at 320K unrealized. Now you are at 244-21K. At the rate you are going, you are going to go negative for the year. Why did you not take the 320K like I suggested? You just playing this like a damned game? It is becoming unfun.

It’s a sim-account.

 

[fullautotrading]

It’s a sim-account.

The actions and criteria in the "public illustrations" I make periodically with real-time data on "paper trading" with my algorithmic trading platform are the same ones used for "real money" accounts (by the investors).
In fact, if they were different, it would defy the "illustrative" purpose of these demonstrations.

In general, we would not be shutting down a trading session (real money or paper money) just because it is in a decent profit. Otherwise, we should be shutting down continuously all our sessions, and lose a lot of "trading information". Which would greatly hurt long-term performances.

Remember that our edge consist also of "trading information" accumulation and a stop-loss-order-recovery mechanism (which implies that all the trading information about past hedging (stops) executions is stored and maintained until a "player" (essentially, an order "waiting" with a loss) can finally be closed with a profit.)

Only non-profitable strategies are conveniently shut down when in profit because they are essentially the result of predictive "gambling" and not real long-term consistency.

Approaching day 304 of the illustration, it's a good time to show again the entire list of orders (1241 fills), attached (can be open as always by excel or wps office)