OEX weekly options

TJ

Got your explanation on the 2% of capital trading business. Old news that one. On losing systems I agree, it is a good rule to follow. Where you have built in losses as part of the steady operating system.

Which is why I repeat, I'm trying like heck to get only a winning system, no losses. The success or not does raise the probabilities, of having winning trades long enough, to quickly cover your original stake. So I'm willing to increase my bet size to 30% of capital, rather than 2%.

Whether it works or not, only another year and a half will tell?:confused:
_________________________

Stanford

You are coming across as delving into too many things. SPECIALIZE! FOCUS! Find a niche and work it for all your worth. What you are doing is why so many traders are losers. Decide what you want to do. Find one to three ways to make money regularly, then forget all the hype and ten thousand other ways people are making money. You are getting distracted from your goal. Just my opinion! :cool:
 
falconview, you are right I am delving in to many differnent things. that is because I know so little, I dont even know what to specialize in. You can be assured that once I find my mix of two or threee that will be it, you are right.

and when you can show me 4 years of profits, I am happy to pay you $50 per month for your trade suggstions. Like money in the bank!

Thanks Michael
 
TJ, exactly, however I know that you would be able to do this, something I read from a very bright trader.

"There is an alternative to track records based on observed numbers and time: one needs to prove theoretically (using mathematics) that a high prob strategy has a positive edge. "

The other point, is who would sit there and do no adjustments and watch their entire capital go?

Thanks Michael

PS good article.
 
Quote from Stanford:


The other point, is who would sit there and do no adjustments and watch their entire capital go?

Thanks Michael

PS good article.
More...

Thanks for the kind words (my head will get too big if you do it one more time). A next article is related to adjustments.

I wrote an article on track records, and 80/20, 60/40, etc condors? Hopefully it would help readers look at records from different angles, and even raise questions that advisory guys did not think about. Details below.


http://stockmarketoptions.blogspot.com/2010/09/if-you-have-two-condor-spread-trading.html
 
I have now SPY (OCT 21)114 put bought @ 2.05.
I had scalped some profits already in short SEP114 puts .(had I waited till close ,it would have expired)
I sold my OCT 113 calls around lunch (thinking market has topped-having bought back my SEP113 short call @the open).
So I have some profits .
Iam thinking selling SEP30th expiry (quarterly)
50% 114 puts {bid-ask =0.66-0.72} &
50 % 115 puts (bid-ask=1.06-1.12} On Monday it could be less by 0.15 if we open unchanged.against my long OCT puts.

Also thinking of buying some OCT 114 monthly calls and sell SEP30th calls.

If next Thursday 4.15pm,
If spy closes @ 114- 114 puts die and 115 puts in the money less than premium
If spy closes @115 both 114 & 115 weekly puts die.
Next week- Sell OCT 1st week option.

If SPY closes below 114-it will start biting my ass.( My short 114 weekly calls will cusion some what & OCT calls wont depreciate that much )
OCT PUT (delta ,Gamma is less than the weekly) gains will be less than the loss incurred in the short weekly PUTS..
Any suggestions welcome.
Hedging vehicles (intraday) to
Long SPY -BGU/TNA
Short SPY-SPPU-TZA (Not exactly same hedge-but 3 x Leverage Bull/Bear ETF does not need investment like $114,000 (for 1000 shares SPY)

<a href="http://content.screencast.com/users/Kichu/folders/Default/media/ccc6dd14-9976-483a-bd33-c400e160b97d/2010-09-26-StockAndOptionQuoteForSPY.png"><img class="embeddedObject" src="http://content.screencast.com/users/Kichu/folders/Default/media/ccc6dd14-9976-483a-bd33-c400e160b97d/2010-09-26-StockAndOptionQuoteForSPY.png" width="1276" height="523" border="0" /></a>
 
Kevin

That is an interesting methodology you are trading intra-day. Why don't you make some columns and show your losses and wins amounts and deduct the commissions with a running account balance on the side? Then it makes more interesting reading.

An example is probably still up on the internet, by "THE TOAD". I used to follow him regularly. Never could duplicate his jumping in and out intra-day though. I learned a lot from him. I suppose he is dead now?
________________________

Stanford

Thanks for the offer sometime in the future of a $50 a month subscription. Running such a service does not interest me. I always figure subscription sellers were losers, or why would they do it?

I am interested in a small way of starting a small extended family and friends Hedging pooled operation doing this. I would say it would be Xmas 2011 - 2012 before I would be ready. ( $5000 one share certificates ) Need a year's performance figures first. LOTS of capital around the country of Belize. More than I could ever feel comfortable dealing with. Half a million would max my current capabilities out and I see no problema in pooling that here, when it is time. I'm trying to line up a trainee trader to assist me for next year sometime. Being a small population, much goes on character and personal knowledge of people.:D Everybody around here knows everybody. Warts and pimples included. My goal is not so much in raising capital. That amount is already available if and when I need it. The goal is to pay a dividend of 20% a year to shareholders. Any excess to be compounded, with a percentage to go into a Charitable non-profit educational TRUST ( educational grants ) for Belizean kids. I don't expect personally to make a penny. I'm just staying busy and having fun. I've led a very active life, but in old age the body doesn't want to do lots of things any more. so mental challenges are the name of the game in this last stretch of my life.

I was successful in stock trading years ago, after about 10 years of learning and losses first. Even wrote a book on it. Options is a much more rewarding and faster game. Even have done the options intra-day stuff, but it is too intense for me. I'll stick to END OF DAY strategies. The thing I've learned is don't have LOSSES. Or if you have to take a loss in a strategy, plan it out before hand, as when a trend changes. This reduces the numbers of trades a lot. But the bottom line is end of year percentage gain, not the number of frenzied trading activity.

I'm looking forward to start trading DEBIT SPREADS this coming week. I am still working on the strategy. Convoluted thing almost. Won't know if it works until I try it though for a couple of weeks. Would like to go into real money by XMAS. My only working strategy right now is the Weekly credit spread. Need something different than that. So it is try and discard the failures time. Slowly, slowly! I'm a slow methodical type of personality. All my kids ( each one ) are millionaires themselves, in assets if not in cash money. I'm in no hurry.

In wooden ship building back in my youth, we used to call this system. CUT AND FIT! ( and repeat ) You can always try something and shave off a little bit more wood, but if you go whole hog and make a cut, that turned out wrong, you just lost a lot of money, time and labor.
 
Quote from falconview:

TJ

Got your explanation on the 2% of capital trading business. Old news that one. On losing systems I agree, it is a good rule to follow. Where you have built in losses as part of the steady operating system.

Which is why I repeat, I'm trying like heck to get only a winning system, no losses. The success or not does raise the probabilities, of having winning trades long enough, to quickly cover your original stake. So I'm willing to increase my bet size to 30% of capital, rather than 2%.

Whether it works or not, only another year and a half will tell?:confused:
_________________________
More...

Falconview:

The 2% rule as described in your post was not the point of my post. It is an element used in the post to reach other points/conclusions.

In relation to your 30% bet size, what do you do if you lose it on the bet.?Each dollar will become 0.70., and you will need 43% on your next trade just to break even.

Two hits in a row, you will need to DOUBLE the account just to break even.

Return and loss is asymmetric. That is how leverage gets people.

Once one takes a hit of 30%, they typically regret the decision, and may make the second "mistake", which is to bet 2% only on next trades, as they become good fellows. Since they cut their size by 15, they may need 7 consecutive trades just to break even, if their reward is twice the risk. Tortoise can beat the hare.... in trading.

TJ
 
The 2% rule as described in your post was not the point of my post. It is an element used in the post to reach other points/conclusions.

In relation to your 30% bet size, what do you do if you lose it on the bet.?Each dollar will become 0.70., and you will need 43% on your next trade just to break even.

Two hits in a row, you will need to DOUBLE the account just to break even.

Return and loss is asymmetric. That is how leverage gets people.

Once one takes a hit of 30%, they typically regret the decision, and may make the second "mistake", which is to bet 2% only on next trades, as they become good fellows. Since they cut their size by 15, they may need 7 consecutive trades just to break even, if their reward is twice the risk. Tortoise can beat the hare.... in trading.

_____________________________________

Very good points TJ. Was aware of it, but nice to be reminded once in a while in the enthusiam to pyramid.
 
TJ

I was playing this early Monday morning, with your early end of trend signals. The EURO and USD charts in particular. I find your signals tend to be too early. The market either goes sideways, or rallies another 3 OEX index points ( 66 DOW ) over the coming week. Limited historical study only for this year.

What I was trying to figure out was should I put on another CALL DEBIT SPREAD, but have decided not to. Because while your signal is early, the likelihood of gaining no more than 3 OEX points for the final top, is not enough to make such a debit spread pay. So your early signal does have some value. Probably in straight options as well, as after paying TIME DECAY you would not make any profit either.

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