My option trades

Quote from atticus:

I've never seen an applied delta1 system approaching 3/4 at 4:1 R/R. Either has anyone else. It's curve-fitted.
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The Majority of the trade signals STD, DLYD, BON, and all BUY 2 are the meat and potatoes of the system and have an R/R of 1/1.
They represent 44 out of 50 of the trades, that means 88% of the time the R/R is 1/1.

The infrequent exception: STD-LEAD, of which there was only 5 out of 50 of these signal types, means 10% of the time there is a R/R
of +1.91/-1.0 on those infrequent LEAD signals (which represent the
first call trade after several days of market sell off).

The extremely rare type signal STD-OVB only happened 1 time out of 50 trades, which means 2% of the time you are looking for a
R/R of +4.66/-1.0 and this signal type is easy to understand:
"If there is 10 consecutive call signals in a row, call signal No. 11 and higher must be entered at "Buy No. 2 only," but still maintain the same stop as if Buy No. 1 had been entered.
Example:
Buy 1: 2.25 X 1.25 = 2.81 sell limit
Buy 2: 1.70 X 1.40 = 2.40 sell limit
Stop: 1.55
10 consecutive call signals have occurred, so negate Buy No. 1
altogether and go directly to Buy No. 2, but still use the original stop as if Buy No. 1 had been bought.
Buy No. 2: 1.70 X 1.40 = 2.40 sell limit
Stop:...................... = 1.55 stop
R/R: +.70 / -.15 +4.66/-1.0
Again, this one is "rare."
 
Quote from jeffalvinson:

The Majority of the trade signals STD, DLYD, BON, and all BUY 2 are the meat and potatoes of the system and have an R/R of 1/1.
They represent 44 out of 50 of the trades, that means 88% of the time the R/R is 1/1.

The infrequent exception: STD-LEAD, of which there was only 5 out of 50 of these signal types, means 10% of the time there is a R/R
of +1.91/-1.0 on those infrequent LEAD signals (which represent the
first call trade after several days of market sell off).

The extremely rare type signal STD-OVB only happened 1 time out of 50 trades, which means 2% of the time you are looking for a
R/R of +4.66/-1.0 and this signal type is easy to understand:
"If there is 10 consecutive call signals in a row, call signal No. 11 and higher must be entered at "Buy No. 2 only," but still maintain the same stop as if Buy No. 1 had been entered.
Example:
Buy 1: 2.25 X 1.25 = 2.81 sell limit
Buy 2: 1.70 X 1.40 = 2.40 sell limit
Stop: 1.55
10 consecutive call signals have occurred, so negate Buy No. 1
altogether and go directly to Buy No. 2, but still use the original stop as if Buy No. 1 had been bought.
Buy No. 2: 1.70 X 1.40 = 2.40 sell limit
Stop:...................... = 1.55 stop
R/R: +.70 / -.15 +4.66/-1.0
Again, this one is "rare."
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Forget about the risk reward. You can't be right everytime. That's a glaring red flag. Why bother with options if you can call the market right everyday?
 
Quote from jeffalvinson:

The Majority of the trade signals STD, DLYD, BON, and all BUY 2 are the meat and potatoes of the system and have an R/R of 1/1.
They represent 44 out of 50 of the trades, that means 88% of the time the R/R is 1/1.
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Not mentioned until now.
 
Quote from atticus:

Not mentioned until now.
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He is dumb enough to think that there isn't an issue with results that will make him the richest man in the world in a matter of a few years.
 
Dreamliner

Thankyou for contributing. I think I have the picture in my mind now what selling strangles is?

It´s an Iron Condor without being a credit spread. Instead of using two opposing credit spreads in a channel which would give you limited risk, to the tune of $500 margin per contract required as it gets approached by market action. Selling strangles would be more or less the same thing, selling straight PUTS and CALLS, but UNLIMITED RISK. Which doesn´t sound too sharp a practice to me.

Should be safer using opposing credit spreads, methinks?

_________________________________

The suggestion of selling a STRADDLE confused me. I will have to cogitate on that one for a bit. Can´t picture it working yet?
________________________________

I remember making notes about a year ago on credit spreads, and when the market started to threaten one side, somebody said something about closing that spread, when you lost X amount of premium. I´m in a vacation apartment here and don´t have my notes with me. Just the computer I brought. But I´m sure I made a note of that sometime a year ago. I´ll look it up again when I go back home end of May. End of forest fire smoke season.
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From Dreamliner-

"The way I do strangles is to sell at least 2 months out, with at least 6 contracts each. When the market approaches a strike buy the other side to make a spread and protect yourself in case the market turns around. Now you're buying much cheaper than if you had done a spread initially.

Then as the market continues to approach your strike, roll out and reduce risk. For instance, if the market is approaching your put strike, and you have 6 contracts, roll out in time and reduce the number of contracts, so that the maneuver is basically even (you didn't spend anything on the rollout).

Now you're protected on the call side at a very low cost to you and you've reduced the risk to half on the put side and given yourself more time. All is well. It's all about adjusting and removing risk."

I DID NOT FOLLOW THAT PART ABOUT BUYING THE OTHER SIDE? WHERE YOU TALKING ABOUT TURNING IT INTO A CREDIT SPREAD?

ROLLING OUT IN CREDIT SPREAD PARLANCE, MEANS CLOSING AND GOING TO THE NEXT MONTH? IS THAT WHAT YOU MEAN? I FORGET SOME OF THIS STUFF.
__________________________

I´ve been looking at credit spreads, but I cannot find any premium to do, in the WEEKLIES.
_______________________________
 
Quote from newwurldmn:

He is dumb enough to think that there isn't an issue with results that will make him the richest man in the world in a matter of a few years.
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lol a little harsh as many fall for outlandish curve-fitted backtests.
 
You're getting it all exactly right!

Let me explain about the "buy the other side." If the market is dropping (or even if it is remaining close to the same but enough time goes by to lower premiums) then I want to turn one or both sides into a credit spread.

For example: the market begins to approach my put strike. Then the call premiums are WAY less and I enter a call buy to make this a credit spread now. Now I've got the same thing as a bear call credit spread, but at much less the cost than just entering a credit spread to begin with.

As the market threatens my put strike I roll down and out, and reduce risk. You have the right idea below.

Quote from falconview:

Dreamliner

Thankyou for contributing. I think I have the picture in my mind now what selling strangles is?

It´s an Iron Condor without being a credit spread. Instead of using two opposing credit spreads in a channel which would give you limited risk, to the tune of $500 margin per contract required as it gets approached by market action. Selling strangles would be more or less the same thing, selling straight PUTS and CALLS, but UNLIMITED RISK. Which doesn´t sound too sharp a practice to me.

Should be safer using opposing credit spreads, methinks?

_________________________________

The suggestion of selling a STRADDLE confused me. I will have to cogitate on that one for a bit. Can´t picture it working yet?
________________________________

I remember making notes about a year ago on credit spreads, and when the market started to threaten one side, somebody said something about closing that spread, when you lost X amount of premium. I´m in a vacation apartment here and don´t have my notes with me. Just the computer I brought. But I´m sure I made a note of that sometime a year ago. I´ll look it up again when I go back home end of May. End of forest fire smoke season.
_______________________________

From Dreamliner-

"The way I do strangles is to sell at least 2 months out, with at least 6 contracts each. When the market approaches a strike buy the other side to make a spread and protect yourself in case the market turns around. Now you're buying much cheaper than if you had done a spread initially.

Then as the market continues to approach your strike, roll out and reduce risk. For instance, if the market is approaching your put strike, and you have 6 contracts, roll out in time and reduce the number of contracts, so that the maneuver is basically even (you didn't spend anything on the rollout).

Now you're protected on the call side at a very low cost to you and you've reduced the risk to half on the put side and given yourself more time. All is well. It's all about adjusting and removing risk."

I DID NOT FOLLOW THAT PART ABOUT BUYING THE OTHER SIDE? WHERE YOU TALKING ABOUT TURNING IT INTO A CREDIT SPREAD?

ROLLING OUT IN CREDIT SPREAD PARLANCE, MEANS CLOSING AND GOING TO THE NEXT MONTH? IS THAT WHAT YOU MEAN? I FORGET SOME OF THIS STUFF.
__________________________

I´ve been looking at credit spreads, but I cannot find any premium to do, in the WEEKLIES.
_______________________________
More...
 
Jeff,

If you had no losers in your backtest, how did you calibrate your stop level?

Stops that are never hit are usually too wide. Tighten them up and your expectation would likely improve. A model with no losers, unless it is severely capacity constrained, is usually leaving money on the table.
 
Oh dearie me!


A BEAR CALL spread. I´m going to have to read that one up. You lost me.

Lets see if I think about this. Market is approaching the PUT side of a sold straddle. So you buy CALLS for your CALL SIDE of the straddle which is not in any danger?

Then you rollover over the endangered PUT sold side? Meaning what? I forget how you rollover to the next month, but I do believe I remember you don´t have to pay for it.
 
Quote from ryanpatrick:
how much higher can AAPL go? Had to sell those puts again and bought 3 aapl mar 23 2012 605 calls at 4.50 just to see how far it can run up again this week. Jeez, is taking a few hundred each time too.
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Quote from ForexForex:
Flip Flopping all over the place. Those calls closed at $8.00, I assume you bought them hours before your post. I think you are loosing your Mojo with the AAPL trades.
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Quote from atticus:
You have less credibility than NE, if that's possible. FF is the guy who edited a buy to a sell in a thread when the sim-trade went against him.
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Do you have a link? Or are you just adding to the noise already on this thread?
 
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