Looking for a Successful Trader for US Equity Strategy

[Butterfly]

You hold stocks for 12 weeks and generate a 50-100% return with a possible 50% drawdown? And the option bid/offers and the theta make buying the delta through options unprofitable?

Buying long the 10 call options for those stocks is indeed difficult because of the bid/ask spread of the options. Even if you manage to get a successful trade, because of the turnaround of those companies, the bid/ask size will disappear and the spread widen even more, sometimes with one side completely disappearing as "option traders" reevaluate their models.

Tried to create a few options strategies combining calls with different strikes and using puts, it was a bit more achievable, but much more expensive in terms of trading costs. Profits were simply much smaller than the actual pure trade of the underlying. Buying simply the underlying was eventually easier as the security were liquid and the trading costs very small, and so were the gains.

 

[Butterfly]

If it's based on fundamentals, how do you know it would have performed well the prior 8 years before live trading? Do you enter trades on technicals?

because I have the candidates for the last 8 years, and have their forward returns historically, so I can run without looking forward bias or survivor bias the strategy historically. Everything is "as is" or "point in time" historically for fundamentals and returns.

I don't use technicals to enter the trades, the fundamental conditions are the signal. However, I expect a trader to use technicals to enter and exit the trades at the best time, and play the volatility.

 

[Butterfly]

did you look at the flip side of this scenario where this looming debt noose on the banks will make the non neglected, over inflated stocks sink like a rock as a hedge

isn't that what everyone is doing already ?

 

[ammo]

if you ignore all the blog sentiment, everyone is doing everything ,despite all the bullish or bearish rants , there is a buyer/seller every trade