My goal is to make at least 30% per month

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This doesn't have anything to do with beliefs... it's not religion. It's finance and maths. I was talking about possible drawdown in a 30%/50% move in underlying, which is your capital at risk in a certain scenario, which you should be aware of... and you are clearly not and unwilling to understand.

marsman said:
Here's an example:
position is say down 8%, you increase the position so that the DD halves to 4%.... you can manipulate DD as you will, best done intraday so that the worst DD doesn't show up on the list which is usually generated only at/after EOD...
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Your 8% to 4% drawdown story shows that... what you're talking about is doubling down, which can be fine... but has nothing to do with risk, except that it increases it.

You don't have to worry about me @marsman... ;) I'm not claiming anything, but am very well aware of risks involved in trading and keeping positions, which is mainly based on experience... and that experience allows me to do this for a living.
 
'Doubling Down' (or rather, reducing your average cost basis) is a good way to lower the amount of unrealized loss, and therefore make it easier to break even. However, it does mean you are now holding twice as much of an asset that has just gone down in value. Unless you have a legitimate reason to believe it will go up (insider knowledge, sector knowledge, etc. etc.) you could be facing the need to 'Double Down' again soon.

How often can one lower their Avg. Cost Basis before they run out of cash to buy up stock? Then they are sitting there waiting... and waiting.. for it to go up (which means periods of time that can not be used to generate revenue from premiums).
 
Hi folks, FYI: this journal was not created for giving some lectures etc.
I find it impolite that some people simply ignore my statement that I don't have time for lengthy discussions, but they still post endless postings with countless basic questions and theories.
If you don't believe in what I say/said/proved then it is up to you, what else do you want hear from me?
 
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HappyTrader said:
However, you still have the risk:
TSLA @ 200
Write naked TSLA CALL @ 220.
Musk Tweets Super Master Plan Part 3 on Friday 3pm
TSLA @ 280
You're assigned - 60$ loss (6000$ / contract).

I believe you referred to them as low probability events -- but these are the types of events that wipe funds out.
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Believe what you want... :)
And if you are looking for a risk-free strategy, risk-free trades, then you are in the wrong place.
I already said that without risk there is no reward...
In the above case: what if your strike is not 220 but say 260? (just an example w/o knowing the actual orderbook)... Does it make a difference?...
Yes, it definitely does!...
You have to ask yourself for example this: what is the probability that the underlying will hit my strike in a week or in x days till expiration?...

As said, the following can help you play many scenarios:
http://optioncreator.com/
but you should do some furthergoing maths yourself, especially the leveraged PL in percent based on margin use...
And for this you need the formulae from the margin tables of the broker, know ITM/OTM values etc...
 
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@HappyTrader,
I can't answer all your questions, and I don't need any advice, as said many times.
I'm doing it here simply MY WAY! Just accept this fact... I have no time for lengthy discussions arguing against it.
I would suggest you learn the "leverage by margin" thing... It's a little bit different in this case of trades as opposed to pure stock trading...



 
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JackRab said:
I can guarantee you this (what @jo0477 says) is correct. MM's will lower IV on the Friday.... Usually the Friday end of day straddle/strangle value will be the same or higher as next Monday morning in weeklies, not so much on monthlies. MM's set the prices, they are called Market Maker (ps. I used to be one)... not Market Taker!

If you enter a position because you want to 'take advantage' of that vol down shift a few days ahead, you'll be trading short gamma and taking on extra risk on events like NFP, Rate decisions, beige book... everything basically. So... no, you can't just be happy that way, because there is no free lunch....
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Sometimes they raise the price going into a weekend especially during times of stress when newsflow could cause a pre-market move on Monday and participants are looking to hedge that risk.
 
JackRab said:
I can guarantee you this (what @jo0477 says) is correct. MM's will lower IV on the Friday.... Usually the Friday end of day straddle/strangle value will be the same or higher as next Monday morning in weeklies, not so much on monthlies. MM's set the prices, they are called Market Maker (ps. I used to be one)... not Market Taker!

If you enter a position because you want to 'take advantage' of that vol down shift a few days ahead, you'll be trading short gamma and taking on extra risk on events like NFP, Rate decisions, beige book... everything basically. So... no, you can't just be happy that way, because there is no free lunch....
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Thanks Jack.

But assume a trader is just trading stocks or FX, standard longs and shorts (not options etc), but is really nailing it, raking in the cash. Would a broker like IB take notice and then start tracking his trades for its own account? Thanks
 
AbbotAle said:
But assume a trader is just trading stocks or FX, standard longs and shorts (not options etc), but is really nailing it, raking in the cash. Would a broker like IB take notice and then start tracking his trades for its own account?
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Places like IB, AMTD, etc. don't trade, they are only interested in the risk you have on your positions and how much commissions you are generating.
 
Next week I'll start the live trading of this method.
We (I and my trading partner) will start with a relatively small account of 11k.
Interested people can join us. PM me for details and any questions.
 
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