My option trades

Quote from falconview:

FINALLY able to get into the TOS Paper Trading website this Saturday a.m.

Seems I CLICK on the ASK price for the FIRST MONTH to establish the CALENDAR? Made a note of it.

Hope I´m right, as I want to CASH trade a CALENDAR this coming week?
More...

You're wrong on everything. Even on a Saturday morning. You ask for help, but don't follow it when we do help you out.

So, here, again, is what you need to do:

1. Why are you on the website? You need to download the desktop version. It's an exe file. It'll help you understand risks better. The online version SUCKS (this is the billionth time I've told you this).

2. Do not trade a calendar unless:

2.1 You are able to do so without any effort in TOS (i.e., you know where and what to click)

2.1 You can fully understand what the risk looks like and where your position is in real time with regards to volatility of each individual month

[which is why YOU NEED THE FREAKIN DESKTOP VERSION]

3. Keep paper trading. I paper traded for a year and a half building a codebase in Matlab to do numerous calculations and analysis. What makes you so confident that you can go live with just ONE calendar paper trade?

4. Here's a very good tip. Click on TOS's support button
[ONCE AGAIN: YOU NEED THE DESKTOP VERSION FOR THIS:]

So anyways:

4.1 Click on Support Button on the left hand Pane.

You'll see a new window

4.2 In the window that pops up, click on LiveSupport and then click on "Create Support Request"

4.3 Create a Request to reduce your account to $10,000 (or whatever your real trading account's size it. It'll be a much better simulation of PnL)

I've attached a file with the step. Hopefully it'll make sense:


P.S. Those are my paper trading profits you see on the left hand pane of that screenshot. As you can see, with TOS, it's quite easy to make money in their paper trading system. Those profits from $100,000 to $220,000 are in less than a month's work.

So the moral is to not take any PnL you make in TOS too seriously. Use it only as a tool to learn about the risks involved and how to enter orders.
 

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Thankyou for the assist Babu.


I´m traded out for the weekend. Mentally wiped out. Going to look for a plumber shortly to fix the bathroom sink. I have no tools here. Then maybe the Chinese grocery store for bread and a package of boneless chicken breast. Wife went back to the hills out West after two weeks.

After that, lunch, then a swim at the beach, then a nap, then read a book into the evening.

Was reading up on the neutral butterfly. Since you guys were trading RIMM something or other and got a big volatility announcement. From my reading you would have done a SHORT butterfly? If you were looking for a volality jump?

Light very light tradewind. Bit muggy today. Warm and nice otherwise.
Got to put some clothes on, before walking down the beach. Hate that thought.
 
Quote from falconview:

Thankyou for the assist Babu.


I´m traded out for the weekend. Mentally wiped out. Going to look for a plumber shortly to fix the bathroom sink. I have no tools here. Then maybe the Chinese grocery store for bread and a package of boneless chicken breast. Wife went back to the hills out West after two weeks.

After that, lunch, then a swim at the beach, then a nap, then read a book into the evening.

Was reading up on the neutral butterfly. Since you guys were trading RIMM something or other and got a big volatility announcement. From my reading you would have done a SHORT butterfly? If you were looking for a volality jump?

Light very light tradewind. Bit muggy today. Warm and nice otherwise.
Got to put some clothes on, before walking down the beach. Hate that thought.
More...

That's wonderful.

When you are ready, do as I told you. Everything to the T.

Start by downloading the ThinkOrSwim desktop version here:

https://mediaserver.thinkorswim.com/installer/install.html

With the RIMM earnings, we were not looking for volatility increase. We were looking for implied volatility decrease. Hence long butterfly.
 
Looking at the long butterfly then.

Been reading up a bit on it. Will do more over the next two weeks.

Trying to figure out the trade timing.

If I understand it right, you are looking to gain in a collapse of volatility, as the sold premiums contract.

Presumably you would hold it for one to three days?

One side would probably contract premium from volatility collapse faster than the other.

You want the index, or stock to not move much. Preferably flutter around the ATM figure?

Parameters would be fairly close I would think?

Going to have to read up a bit more on it.
 
FV...b-fly's are the inverse of IC....in that you die by a thousand cuts (many small losses) and occasionally have a big strike. With the IC you make many small wins then one great bust (often hard to contain).

Obviously the best way to trade a butterfly is to start with a long vertical. If the trade goes in your direction then you fly it off by selling the vertical to create the fly. You certainly can be directional with a fly so its fine with a volatile stock if you are right in direction you can win big...if wrong then loss is small.

Another downside of fly is cost of commission. Most people might argue just go with the straight put/call or simple vertical and cash it out if/when profit.

Flys are cheaper when vol is higher so they can also be a volatility play. Flys are better/easier/less messy with indicies than with stocks. Since most stocks are American ex you sometimes get put/called out of your short and need to monitor it carefully.

have to agree with Babu...if you are using TOS then download the platform. I do have a bit of a problem with my netbook..platform runs slow (but a full size computer is no issue) but TOS has several demo's and discussions on how to use the analysis tab and visually look and understand the structure of your options. Trading options is more difficult than perhaps most other type of trading or business but it is a wonderful mind exercise and will keep you mentally fit. Good luck in your learning.

apology to the op as this thread no longer seems to be his......
 
I have a lot on my plate, and believe I have downloaded the desktop before? Will check. As I recollect it was different than the web based and required a longer learning curve for the platform Squeezing in the time to learn another program fills me with reluctance. But will take another look.
Got to concentrate on my bread and butter stuff. BEFORE I go hairing off learning new programs. Trading is not the only thing that keeps me occupied. Being able to fill an order promptly is pretty much all I require of a brokerage platform. Plus internet access slowdowns, brownouts, and halts, can make some days difficult with data feeds.

When it comes to learning, I like to picture the trade by visualization. Like a movie in your mind.

I like to picture the volatility, or premium swelling and shrinking flow as it occurs and know why it is occuring. In a picture in my mind. The visualization by using graph triggers which I´ve developed allows me to now choose entry and exit points. TIMING seems to be the critical factor?

I have the TIMING down I hope, and will know soon enough over next 6 weeks by my equity balance. At least for buying straight CALLS, or PUTS. Also the the HORIZONTAL, TIME CALENDAR. Right now the enquiry into the butterfly is because ATTICUS tends to recommend it. Like any standard trade, it requires TIMING. So my questions are more to identify the picture in my mind of the entry and exit TIMING with the butterfly. Just starting to enquire about the setup for the butterfly. When you use it? No hurry on it. I have plenty with straight buying and time calendar trades to keep me busy.

I´ve been floating since January 1st, between + 10% and + 2% This weekend my balance is + 3% account growth. But I´m hoping I´ve licked and fine tuned a number of variables on the TIMING and the rest depends on lady luck and the market action.

I´m going to see what I can do with increasing RISK now, for the next week or two. Just using straight buying and the calendar a bit.
 
Richard Rhimes

I really appreciate your comments on the butterfly. Sunday morning and was just looking to see more on it. I thought your contribution was outstanding and informative. Very helpful to me anyway.
 
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