OEX weekly options

Stanford ( 1 hr into market open )

The VIX is currently around 19. I´ve seen the VIX down to 12. Which more or less is a BULL TREND that we are in right now. As the VIX drops it gets more and more difficult to make any money trading LONG OPTIONS. The daily bars get too short, to overcome TIME DECAY. I´m planning to get into a VOLATILITY CREDIT SPREAD this morning. ( this halts TIME DECAY theoretically ( grin)) Just waiting for the opening orders to settle down. Give it about 2 hours for the Market Makers to balance their order flow. We had a WEAK OPENING starting down. My guess is the BULL TREND is still in force.
I´m looking to get a credit spread on. I might even just try a LONG option trade too to see what happens?

I´m trying an OPEN GAP type strategy right now. Ran across it on the internet.

About a month ago, I spent some time trying to figure systems and entries for SHORT term trading. About 1 to 4 days. Went through my paperwork and research yesterday and eliminated a lot of stuff that didn´t gell with the current market conditions a month later. Now I´ve compiled about 11 ways of interpreting the market and dictating more or less mechanical short term trading systems. So now this week I will start the TESTING of this way of doing short term trading, to complement my ONE and only successful trade system on the weekly options.
 
Falconview, I would be happy with anything positive, and if I was able to get 15% consistently that would be better than the other investments I have.

My goal is for 3% per month on an annual basis, so non compunded 36%. I would be over the moon if I could achienve that consistently!

Michael
 
Stanford

I am curious and waiting until the end of this week and looking to hear how your credit spread monthly trades worked out and with the adjustments factored in. The net would be very interesting after the commissions were deducted.

As to 15%. Hmmnnn! Shouldn´t be hard. Lets say you made it in January and February, would you have the stamina, to stop trading for the rest of the year? Wait until next year January to trade again?
You ever hear of the January effect in stocks? In stock trading January you can make more money than the rest of the year combined.

There isn´t much of a secret in making 15%. The secret is in not losing it again fooling around.
 
Falconview, no I would not stop once I made 15%, as my goal is 36%. However, at the end of the year if I ended up with 15% I would consider that a success.

Michael
 
Well got a return of + $618 net ( Tuesday trade )

5 contracts Nov. 530 Long Calls today.
Return on capital 12% for the trade after paying commissions.

Have a volatility credit spread also sitting working, but it needs to go over OEX 530 before it goes in the money and makes a profit.
 
Quote from Stanford:

Elitethink, care to share some your option trading experiences? I know falconview and I would love to hear what others are up to.
Thanks Michael
More...

Sold an 1125 put on Friday and carried it over the weekend. The main idea here: would have to break 1130 support for the 1125 to go atm.

Monday, sold an 1135 put, didn't like the price action so added an 1180 call. At the end of the day on Monday there was a drop and the buying pressure kicked in. When this happens you know there are more highs to come so added one more 1130 put.

Today, set exit on 1180 call at yesterday's high, sure enough it was hit, got out of call at about breakeven, puts are doing well.

We all keep waiting for that shoe to drop, but til it does I'm rolling puts up.
 
Elitethnk, Thanks, so are the single options your usual style of trading? what other type of options do you trade?
Are they usually short term like these ones? How much time during the day do you spend at this? Care to share roughly the percentage returns you are consistently able to achieve over the long term?
Thanks Michael
 
Quote from Stanford:

Elitethnk, Thanks, so are the single options your usual style of trading? what other type of options do you trade?
Are they usually short term like these ones? How much time during the day do you spend at this? Care to share roughly the percentage returns you are consistently able to achieve over the long term?
Thanks Michael
More...

The short term work is fairly high in intensity. Using a fly I can make as much as 50% on margin on the weeklies but the norm is 5-10%. During high volatility environments the short term trading has to be geared down as mean reversion drops and exits are blown out.

My long term models generate 3-4% a month. 'Used to crank out much more but have geared down in recent years.

Short term trading is very time intensive, sometimes watching exits all day, or a partner is. I like oex weekly flies, and monthly spreads on the spy as well.
 
Elite Think

Thankyou for the contributions. Gives me something to think about indeed.
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The short term work is fairly high in intensity. Using a fly I can make as much as 50% on margin on the weeklies but the norm is 5-10%. During high volatility environments the short term trading has to be geared down as mean reversion drops and exits are blown out.

My long term models generate 3-4% a month. 'Used to crank out much more but have geared down in recent years.

Short term trading is very time intensive, sometimes watching exits all day, or a partner is. I like oex weekly flies, and monthly spreads on the spy as well.
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As a spread trader beginner, I found your comments fascinating. Don´t like such intense trading myself. But being able to do the occasional variety trade has it´s attractions.
I didn´t understand the fly comment? Is that the butterfly trade? Makes me wonder what you would trade and how for criteria on the weeklies. I´ve been trying to figure out some other type of weekly trade. Have not tried a butterfly yet, nor figured out how to use them.
I´m leery of the monthly spreads, or at least credit spreads. No particular reason, just that they seem time and margin wasteful. I´m very curious as to how Stanford´s experiment will come out with the rollovers. Want to know if you can actually turn a lemon into a silk purse using adjustments.
I´m guessing you are using limit orders?
The FLY comment for weekly trading got me really interested, all brand new stuff to me. If you could sort of run through the actions and thinking processes on here, I certainly would appreciate it. Or send me a private mail.
 
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