Option income strategies
- Thread starter akivak
- Start date
Time to end this thread.
To the OP: you've gotten great feedback from people here and done your own research. If you think it's going to work, then do it. If you still doubt your abilities in the face of such results (bull mkt or not), then you are not ready.
In fact, the whole point of you doubting yourself or the results is in fact a unconscious indicator that you don't think this is going to work.
Translation : the results will speak for themselves.
To the OP: you've gotten great feedback from people here and done your own research. If you think it's going to work, then do it. If you still doubt your abilities in the face of such results (bull mkt or not), then you are not ready.
In fact, the whole point of you doubting yourself or the results is in fact a unconscious indicator that you don't think this is going to work.
Translation : the results will speak for themselves.
here is an interesting twist on selling premium. sell puts on stocks with big buyback programs in place that you wouldnt mind owning. the buyback program puts a floor under the price benifiting a put selling stradegy.
http://online.barrons.com/article/SB126091970802092803.html#articleTabs=article
Goldman Sachs, which recently studied this issue, is telling clients to start thinking of buyback programs as a persistent bid supporting stocks that can be exploited by selling puts.
After all, buyback programs represent a very large investor -- the company -- buying its own stock, which theoretically should support prices.
The study, authored by Anthony Carpet, Laura Conigliaro, Robert Boroujerdi, Maria Grant and Deep Mehta, concludes that selling puts is an attractive way to buy stock, or increase exposure, to companies with large buyback programs.
http://online.barrons.com/article/SB126091970802092803.html#articleTabs=article
Goldman Sachs, which recently studied this issue, is telling clients to start thinking of buyback programs as a persistent bid supporting stocks that can be exploited by selling puts.
After all, buyback programs represent a very large investor -- the company -- buying its own stock, which theoretically should support prices.
The study, authored by Anthony Carpet, Laura Conigliaro, Robert Boroujerdi, Maria Grant and Deep Mehta, concludes that selling puts is an attractive way to buy stock, or increase exposure, to companies with large buyback programs.
Go to CBOE page, Dan Sheridan webinars - http://oiwebcasts.cboe.com/portal/v_g.asp?G=10&events_page_num=1.
There are few of them:
Dan Sheridan's Adjustments & Trade Management Series: Adjusting Condors in a Volatile Market
Dan Sheridan's Income Trading in a Highly Volatile Market Part I: Have the volatile markets killed the Iron Condor? (I think this is the one that describes Oct-Nov 2008 trades)
Dan Sheridan's Condor Lessons from the October 2008 Market Blizzard
All of them are very informative and worth watching.
Where are the audited track records?
Where are the trading stats? Sharpe? Drawdown? Profit Factor? Others? Results without metrics are entirely useless - some people withstand huge drawdowns or average down to plump up their track records
No one accepts self-reported results.
Seriously, you are either a shill, or as clueless a newbie trader as we have experienced. There are thousands of these sites, each as useless and deceptive as the next.
I cannot speak about thousands, but I can describe those that I personally tried for periods of one month to several months.
1. Wicked Profits: does one trade per month. No adjustments. If the underlying crosses the short strike, the trade is closed. Completely reproducible, very honest reporting, in business since 2000. Average monthly return: 4.8%. 5 years with only one losing trade of 0.21% based on real trades. Largest monthly loss since inception: -21% (Oct. 04). Made 36% in 2008, not compounded, verified by Pro-Trading-Profits.
Ratios that you mentioned as monitored by Pro-Trading-Profits:
Sharpe â 1.9, Profit Factor â 6.57.
2. OptionPundit: does combination of iron condors, multiple calendars and double diagonals. In business since middle 2007. Average monthly return: 7-9%. Reports performance based on average fills from subscribers. One losing month since inception (-11% in August 08). In 2008 was up 48% capital adjusted and up 144% per invested capital. This performance is confirmed by subscribers on the forum.
3. SpreadTheTrend: trades iron condors 1-3 months to expiration. 12-14% per month since July 2007, only one losing month (11% loss in Jan 08). I wasnât able to reproduce those returns, my returns have been 4-5% lower, but still pretty high and consistent.
You donât have to take my word for it â just try any of those services and see how it works.
P.S. English is not my native language, so I checked in Wikipedia for definition of shill:
âA shill is an associate of a person selling goods or services.., who pretends no association to the seller/group and assumes the air of an enthusiastic customer.â
If Iâm a shill, Iâm not sure what would my interest to give names of 10 different companies if I represent one company and try to sell the product of that company.
A Sharpe Ratio of 1.9 with their self-reported profits of only one losing trade over 7 years indicates some periods of very severe drawdown.
Which is why they don't report drawdown. Because if they did, it would scare the hell out of someone.
There is a very good reason why any of these sites are loaded up with warnings and disclaimers. You should read them and appreciate why they are there.
You CANNOT have reward without comparable risk. There is no free ride.
It is best as a trader to do you own work and not trust your health and wealth to a signal service. If these folks were turning those kind of numbers for themselves, and sticking with their own program, I can assure you that they wouldn't be trolling the internet for customers, and putting up with that hassle.
If their numbers were truly worthwhile and worthy of inspection, they'd have institutions throwing hundreds of millions at them.
(Note: Regarding the reliability of Sharpe Ratios, Long Term Capital Management (LTCM) had a sharpe ratio of 4.3 before they blew up and wiped out billions in equity.)