Selling Options for passive income by Robert Kiyosaki

[Sergio123]

There are only so many finite combinations.

I don't believe in putting all of your eggs in backtesting strategies. I don't think that you will be able to go back and find the exact same set of volatility, interest rate, and liquidity conditions in the market.

I believe that testing strategies on a simulation of market conditions is far superior to backtesting strategies.

 

[newwurldmn]

There are only so many finite combinations.

I don't believe in putting all of your eggs in backtesting strategies. I don't think that you will be able to go back and find the exact same set of volatility, interest rate, and liquidity conditions in the market.

I believe that testing strategies on a simulation of market conditions is far superior to backtesting strategies.

because making up the real world is better than seeing how the real world behaved in the past.

how do you account for vol-rate correlation in your simulated prices?

 

[Zwaen]

Many of you should ask yourselves why are you selling an option or a spread,and why on over the other...

I haven't heard one person mention gamma, delta, theta,nor anyone mention how many spreads one would have to sell for an equivalent theta position as a naked option..

There's no free lunch,and what all you guys are glossing over is delta hedging and hopefully capturing theoretical edge

I think one can smooth returns somewhat using ldlv. Do you disagree with this? Would be very interested if you do and why

 

[ironchef]

There are only so many finite combinations.

I don't believe in putting all of your eggs in backtesting strategies. I don't think that you will be able to go back and find the exact same set of volatility, interest rate, and liquidity conditions in the market.

I believe that testing strategies on a simulation of market conditions is far superior to backtesting strategies.

Good points.

 

[Sergio123]

because making up the real world is better than seeing how the real world behaved in the past.

how do you account for vol-rate correlation in your simulated prices?

Those are 2 independent variables. Just compare the VIX of 2020 to now.
Surprise hikes may spike Vol. but it doesn't look like telegraphed hikes are.

 

[zghorner]

@zghorner,

A few humble suggestions from this retail:

1. Get off the beaten path.

2. Read Taleb, Fooled By Randomness.

3. Hunt for special situations.

Maybe you can pick up some bread crumbs the pros discarded.

Been there done that. Thanks for the suggestions but for now I'm loving futures and really need to focus on this one thing.

Besides, Options left a bad taste in my mouth. Reminds me of pain, the pain of being stupid.

 

[taowave]

This is the second post where you mention passive and big/huge income in the same sentence. For some odd reason you leave out "blowup"..

Selling options + huge returns + passive investing = huge blowouts

I`ve always dreamed to be a trader. I`ve put some money aside. I need to buy a course and learn it. I`m passionate about it. I believe I can make it. but I don`t know and wasn`t able to find out what exactly did Robert Kiyosaki say on how to sell options and make huge amounts of passive income.

 

[newwurldmn]

Those are 2 independent variables. Just compare the VIX of 2020 to now.
Surprise hikes may spike Vol. but it doesn't look like telegraphed hikes are.

So how do you simulate that?

 

[taowave]

You are splitting hairs..

Run a a 20 year backtest with minimal to no vol filters and assume worst case scenario.

Start there..

There are only so many finite combinations.

I don't believe in putting all of your eggs in backtesting strategies. I don't think that you will be able to go back and find the exact same set of volatility, interest rate, and liquidity conditions in the market.

I believe that testing strategies on a simulation of market conditions is far superior to backtesting strategies.

 

[Sergio123]

So how do you simulate that?

GARCH is a typical model for volatility and Cox-Ingersoll is the one for interest rates. I change them independently of each other to test the robustness of strategies under different market conditions.