My goal is to make at least 30% per month

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Okay, I've thought about it...

If you get a 50% move, you're looking at a drawdown of at least 10x premium... I guess... so that would be 2-3 mln in losses.

So, if you still want to sell tiny OTM strangles... I would firstly spread it over several different underlyings... not different strikes. So if you get hit with a big move, it only affects one of the positions... not all.
And then look at which market segments you're in... you want to be diversified to avoid that big wipe out.
 
JackRab said:
Okay, I've thought about it...

If you get a 50% move, you're looking at a drawdown of at least 10x premium... I guess... so that would be 2-3 mln in losses.

So, if you still want to sell tiny OTM strangles... I would firstly spread it over several different underlyings... not different strikes. So if you get hit with a big move, it only affects one of the positions... not all.
And then look at which market segments you're in... you want to be diversified to avoid that big wipe out.
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50% move? When did it happen last time?
 
JackRab said:
So, if you still want to sell tiny OTM strangles... I would firstly spread it over several different underlyings... not different strikes. So if you get hit with a big move, it only affects one of the positions... not all.
And then look at which market segments you're in... you want to be diversified to avoid that big wipe out.
More...
Yes, right, that of course makes sense.
 
not one person disputed clearly the assertion the impossibility of making 30%/ month. $1 compounded 30% monthly would be worth $28+ by the end of the year.
this thread is mired with statistical nonsense.
 
zdreg said:
not one person disputed clearly the assertion the impossibility of making 30%/ month. $1 compounded 30% monthly would be worth $28+ by the end of the year.
this thread is mired with statistical nonsense.
More...

It seemed to me that nearly EVERYONE was disputing the possibility of making 30% a month? Sure, its possible to get lucky and do it. But the OP will eventually get wiped out if he keeps taking huge risks. I know that is what I was trying to convey....
 
gkishot said:
50% move? When did it happen last time?
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Solarcity Feb 2016 from 28 to 16 within one week
Twitter, also Feb 2016 from 13 to 18+
Aixtron, May 2016 from 3.80 to 5.70 within 3 days, main part was in a gap opening

Then there are numerous daily movers that move beyond 30%, and a fair few with options.
I've seen these moves on expiration days, mid-week... it's not uncommon.

The ones I mentioned I just remembered... didn't even run an analysis of daily/weekly movers. And those are not small low cap firms.

OP will look at highly volatile stocks for his strategy so he can sell high premium OTM's /strangles... so probably thinly traded stocks which will have these moves now and then... probably low market cap firms, which have higher takeover risk or bankruptcy risk... hence the high implied vols and high option premiums. He will run this strategy on multiple stocks per week... And he is looking at keeping the positions until expiry, only (trying) to hedge when it hits his short strike(s).

With the strategy he's looking at, that 50% move or more and probably even a 35% move will wipe his account out....

[edit]... I forgot my favorite, Nintendo... +85% within a few days after Pokemon Go came out, Then another 38 within another few days... then a 55% drop... And this is a USD 15 bln company when it started.
[edit 2]... Volkswagen Oct 2008 went from 170 to 1000 in a few days... and back to 'normal'...
[edit 3].. .damn, I keep editing because I keep remembering big ones... Volkswagen again from 160 to 100 with the diesel scam....
 
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marsman said:
My goal is to make at least 30% profit per month.
I started this adventure 2016-07-05 with an IB Paper Account that is funded with $1 million USD.
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Why only $1 million. You could start with $100B. It's free - and absolutely misleading. Paper account is for learning to work with platform and placing trades. Paper account will not evaluate a method.

Think who is going to lose 30% a month so you can profit. Do you think there are so many fools around?
 
indicator777 said:
Why only $1 million. You could start with $100B. It's free - and absolutely misleading. Paper account is for learning to work with platform and placing trades. Paper account will not evaluate a method.

Think who is going to lose 30% a month so you can profit. Do you think there are so many fools around?
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Who is to lose 30% a month?
 
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