Randomly generated data has been the focus of the discussion in this thread since it began. 80% of the members replying to u have been critical of you. And 80% of that criticism stems from *YOUR* use of RNG.
If u didn't make absurd claims that those of us (like me) were data vendors trying to sell more data... and instead approached everyone's criticism with an open mind then u would have solved 80% of 80% of your potential customer's complaints and could move on to satisfying potential customers next important wants and desires. Good salesmen listen attentively so they are able to understand what their customers want.
I just re-visited today this thread now because of your prompting. Thanks for that!
As I mentioned twice recently (now my third time) whether any basic conventional performance data of the system could be supplied for further elaboration. It appears we still have not heard anything yet. Not even a question asking what sort of performance data do you/we need/want for evaluation from a trading vendor. That is very unusual!
One thing very very curious, extremely: Using a time frame of 1-second making decisions for many trades lasting for maximum from 10 to 20 days would be very very special! Is it practical or feasible?! Not to mention the cost/premium/spread of buying/holding long options is not cheap.
Filling limit orders with auto-trading long options based on 1-second time frame would be another great challenge! Whether liquid or slow market!
Perhaps the system had been traded for a period of time, but now available for sale to the public, probably due to too many failed trades in-house recently! That could be a reason for why the resistance of using actual data for testing.
Backtesting and forward testing together is basically a must for almost All traders on ET, but it was denied by this offer/system! Why?
Long options trading is not simple, particularly auto-trading, considering spread, IV, delta, strike, etc. etc. There would be more than 3 data sets including such as underlying/ options/ IV to be required for system development.
I wouldn't think many or any options traders here on ET would accept that randomly generated data is practically good/close enough for trading actual money. Since usually predicting the movements of underlying/options/IV/etc based on actual data would be quite common, that could not be done by theoretically (pseudo)random data at all, imo! Perhaps every trader/practitioner trading options would think the same!
Hiding behind actual data through selling a system black box would provide at least one good thing to the vendor when trading mid/long term options. If the system could potentially, even not intentionally, generate both buying long Call and Put options simultaneously distributed to almost half and another half clients (assuming they don't know of each other)! This is exactly what I learned on ET from previous comments in the past by other posters!
Perhaps making some live calls trading SPY options would be the best forward testing that we could see a proof on ET, imo.
Hi,
is there any rule in the US that prohibits buying Calls and Puts at the same time of the same underlying and maturity? (for example IBM June calls and puts)
http://www.elitetrader.com/et/index.php?threads/options-price-movements.297442/#post-4237980
What are the major things to look at when picking an option that would most likely move in sync with the price?
For ex: Deltas are a tremendous force because they will tell how much an option will per dollar. But to me this doesn't make any sense due to the fact that the delta, at the time of purchase, doesn't remain the same. I heard about the spread with is also very important. You dont want to spread to be so big. But other than these two is there anything else?
By far the most important factor in trading options is being able to predict the movement of the underlying. All your study of the Greeks takes a backseat to that. IMHO, nobody should be touching options until and unless you are a profitable trader of the underlying.
Having said that, there is no doubt that Delta is very important in selecting the option. Yes, it will fluctuate with price. And just as you can't fully predict the movement of the underlying, you can't fully predict the movement of the Greeks during ups and down of the underlying during the life of the contract. But STARTING off with the Greeks in your favor, is making the right start.
Gamma helps you keep track of delta changes. Also, one of the most (if not THE most) important things about trading options is understanding volatility. Read up on implied volatility and historical (realized) volatility. Without a solid understanding of these - you will definitely lose money trading options, even if you pick the right market direction.
