My goal is to make at least 30% per month

[SunTrader]

How much can you make in a month?

I never used demo beyond learning the platform. Didn't find it realistic at all. Although that was two decades ago. Things have changed I'm sure. Still.

There is Call of Duty and there is real, live blood and guts warfare. Almost killing the other or be killed in the video is bragging rights. The real life combat version, just like trading, has real life consequences. No comparison to simulation.

 

[gkishot]

I wish I could make 30% a year. I am such a laggard.

 

[marsman]

I never used demo beyond learning the platform. Didn't find it realistic at all. Although that was two decades ago. Things have changed I'm sure. Still.

There is Call of Duty and there is real, live blood and guts warfare. Almost killing the other or be killed in the video is bragging rights. The real life combat version, just like trading, has real life consequences. No comparison to simulation.

The question was how much you make per month or per year in your real trading.

 

[jo0477]

So, you mean the MM rises the Ask and lowers the Bid?
Then people who entered positions some days/weeks ago will be happy....
It doesn't sum up, man!

I mean the MM want to unload inventory before the weekend roughly at a price that will open up on monday. You can't seriously think you are the only person to try capturing theta over a weekend...

 

[RifffRafff]

So, you mean the MM rises the Ask and lowers the Bid?
Then people who entered positions some days/weeks ago will be happy....
It doesn't sum up, man!

All things being equal, they will lower their bids and asks so that at the close on Friday, their quoting engine will be priced for Monday open.

 

[HappyTrader]

Sorry, I don't understand your posting, because I never said I'll sell my method or system. No, I'm not interested at all in selling anything.
And: it is currently still a discretionary method, ie. a manual method. An options scanner I wrote just gives some tips/hints, but the final decision and the trades have to be done by myself manually... I'm working on automating all these steps but it takes time to develop and to throughly test it...

Sorry, thought I saw in a previous post you were looking for funding or to sell the system. My bad. (Long thread!)

 

[HappyTrader]

I know there's a lot of poo-poohing going on, but I'd rather analyze the theory being presented and pass judgement on that. It may very well be the case that marsman thinks he has caught onto something but hasn't fully realized what the error in his logic may be.

Is it possible to post details on exactly what you are doing?

SO far I see it's based on Short Strangles, but this is a popular strategy and by itself would not yield the results you are stating. So therefore there must be more to this.

As your request for aid in automating IB with C++. You could just as easily do it in Java or C# (which would be easier to learn yourself and write in). However, I believe 'timing' in order execution is important, in which case you would not want to use IB. You would wish to you a broker that allows you to execute your algorithms on their systems for faster execution. In which case you would design it in the language of their system (which is usually some script type language).

Thank you

 

[marsman]

I know there's a lot of poo-poohing going on, but I'd rather analyze the theory being presented and pass judgement on that. It may very well be the case that marsman thinks he has caught onto something but hasn't fully realized what the error in his logic may be.

Is it possible to post details on exactly what you are doing?

SO far I see it's based on Short Strangles, but this is a popular strategy and by itself would not yield the results you are stating. So therefore there must be more to this.

I think I have already given all the info, spread over many postings.
The key is of course finding the right instruments to trade, but that I already mentioned. For this I'm using an options scanner that I wrote. I even posted a screenshot of it:
https://www.elitetrader.com/et/thre...least-30-per-month.301450/page-6#post-4308469
I'm using a simple and basic but IMO very important formula for finding lucative trades: credit / margin * 100. The higher the value the better it is.
But besides that one also has to take into consideration some probabilities...

That's all: just find high-yield trades where also the probability of the option expiring worthless is high within a short timeframe (ie. 1 to 3 weeks).
And reduce the marginrequirement as much as possible (cf. above formula) by building short-strangles... See IB's margin requirement table for such combinations...
FYI: I enter the legs individually, ie. initially just 1 leg, and if it makes sense I then also enter the other leg (but it's not mandatory to build a short-strangle, but if done then marginreq gets much reduced, which is very good b/c it means more leverage; it's simple maths).
And of course: sell high, sell much...
And: this is classic options trading, not daytrading. Meaning: you try to keep the position till expiration... Then you save also on the commission...
And: I even increase the position if it mathematically makes sense... (ie. the said "sell high, sell much" principle)
To get better prices one should try to frontrun the MM, ie. trying mid-price etc... In about half of the cases it works... but you have to be patient and readjust your limit price b/c of time-decay and changes in the underlying spot, volatility etc...

And: I've not invented anything new , I'm maybe applying the methods somewhat intelligently, I hope so...

 

[HappyTrader]

I think I have already given all the info, spread over many postings.
The key is of course finding the right instruments to trade, but that I already mentioned. For this I'm using an options scanner that I wrote. I even posted a screenshot of it:
https://www.elitetrader.com/et/thre...least-30-per-month.301450/page-6#post-4308469
I'm using a simple and basic but IMO very important formula for finding lucative trades: credit / margin * 100. The higher the value the better it is.
But besides that one also has to take into consideration some probabilities...

That's all: just find high-yield trades where also the probability of the option expiring worthless is high within a short timeframe (ie. 1 to 3 weeks).
And reduce the marginrequirement as much as possible (cf. above formula) by building short-strangles... See IB's margin requirement table for such combinations...
FYI: I enter the legs individually, ie. initially just 1 leg, and if it makes sense I then also enter the other leg (but it's not mandatory to build a short-strangle, but if done then marginreq gets much reduced, which is very good b/c it means more leverage; it's simple maths).
And of course: sell high, sell much...
And: this is classic options trading, not daytrading. Meaning: you try to keep the position till expiration... Then you save also on the commission...
And: I even increase the position if it mathematically makes sense... (ie. the said "sell high, sell much" principle)
To get better prices one should try to frontrun the MM, ie. trying mid-price etc... In about half of the cases it works... but you have to be patient and readjust your limit price b/c of time-decay and changes in the underlying spot, volatility etc...

And: I've not invented anything new , I'm maybe applying the methods somewhat intelligently, I hope so...

If I understand correctly:

-- You get a list of all options that trade with a implied volatility. I.e., TSLA (high IV), trades for a very high premium (a few dollars for just holding an ATM strike). This is easy enough to accomplish with an option scanner that sorts by IV, then sub-sorts by premium profit, annualized.

-- You then 'somehow' cross reference this with a list of stocks that are likely to move in your favour (your statement: .. probability of the option expiring worthless ...).

How do you determine the probability of the option expiring worthless?

The rest of your statement is just execution/margin issues, not vital to the success of the strategy (aside from covering commissions and/or the need to have margin to execute sizable trades). They could be ignored if you have 1Bn USD & ignore commissions. (I am saying this to focus on the core strategy).

 

[marsman]

If I understand correctly:

-- You get a list of all options that trade with a implied volatility. I.e., TSLA (high IV), trades for a very high premium (a few dollars for just holding an ATM strike). This is easy enough to accomplish with an option scanner that sorts by IV, then sub-sorts by premium profit, annualized.

-- You then 'somehow' cross reference this with a list of stocks that are likely to move in your favour (your statement: .. probability of the option expiring worthless ...).

How do you determine the probability of the option expiring worthless?

delta, a quick chart analysis, maybe reading some recent news about the underlying, and experience...

The rest of your statement is just execution/margin issues, not vital to the success of the strategy (aside from covering commissions and/or the need to have margin to execute sizable trades). They could be ignored if you have 1Bn USD & ignore commissions. (I am saying this to focus on the core strategy).

Hmm. I think you have not understood the margin requirement thing. It's central to the high success rate of my trading, because it means leverage (ie. the less the marginreq the higher the win, relatively and also absolutely seen)!...
And I think you misunderstand what margin in this context means... It is not what you can borrow, no, it's the part of your cash that you have to give to the broker as a security colleteral...
Ie. you can see the marginreq as your investment amount. PL has to be calculated based on this. And: the margin will be released after the position expires or when it get closed early.
Regarding commission: yes it's negligible when using big money... Hmm. maybe not: b/c it's all releative...