SPX Credit Spread Trader

Finally, some insight into your trading :)

Seriously, were your underlying positions all stocks, all indices or a combination? Stocks, I assume, and I assume further that you were prepared to take delivery if necessary?

Also, I think Coach makes some good points. You are obviously a seasoned trader with a wealth of knowledge (as your posts clearly demonstrate). When I first started trading options I sold only naked put options on volatile stocks. Made really good money and my broker let me do what ever I wanted to. One day I was doing some calculations and realized that my potential exposure on the naked puts was three times my entire account value. I immediately cut back to one time my entire account thinking that I was now a "good risk manager". That turned out to be a joke as my subsequent losses proved. This thread helped give me perspective on risk management that I had trouble finding elsewhere.

EDIT: This is not to say that I'm not interested in your strategy. I would most certainly be an interested member of any thread you might want to launch on this subject.

Quote from momoneythansens:

We're going to have to agree to disagree on this point.

I have successfully quadrupled my account in 3 months using a naked premium selling strategy: suggest folks HERE sell as many naked PUTs 1 sigma OTM as margin allows if they want to replicate my success.

Under no circumstances convert to a limited risk position or hedge with underlying as that severely reduces profit potential and ruins the probabilities not to mention the effort/reward ratio of approx 12.4:1 (averaged) is not favorable IMO.

The key to the strategy is to use the WTF chart study (only available on E-signal at present but being implemented on MedVed Quotetracker) but...here's what really makes it work:you have to use (80,12,3) rather than the default values. When all three plots converge on WTF, you have a 99.8% probability that if you write PUTs at that juncture, you will be profitable.

To be more precise, I have found the optimal strike selection to be based on 0.964 sigmas. For the calculation, the volatility to be used should be between the front month ATM IV and the next month ATM IV. This is where it gets tricky. To be accurate, you will need to do some kind of interpolation using a bezier curve/cubic spline methodology. However, the payoff is worth it as my results clearly demonstrate.

Good luck!

MoMoney.
More...
 
Quote from momoneythansens:




Under no circumstances convert to a limited risk position or hedge with underlying as that severely reduces profit potential and ruins the probabilities not to mention the effort/reward ratio of approx 12.4:1 (averaged) is not favorable IMO.

The key to the strategy is to use the WTF chart study (only available on E-signal at present but being implemented on MedVed Quotetracker) but...here's what really makes it work:you have to use (80,12,3) rather than the default values. When all three plots converge on WTF, you have a 99.8% probability that if you write PUTs at that juncture, you will be profitable.


Good luck!

MoMoney.
More...

Thanks Mo for giving us a peek inside your mind. Without hedging off any risk in these naked positions, you must constantly monitor these positions, no? Also, do you have a predetermined bailout strategy? I was trying to do a contingent sell stop GTC market order on my condor's but ThinkorSwim doesn't offer that, do you know if any broker that offers this?

Also was is this WTF indicator you speak of?

I would also follow a journal of MO, like another poster intimated. :D
 
Quote from momoneythansens:



I have successfully quadrupled my account in 3 months using a naked premium selling strategy: suggest folks HERE sell as many naked PUTs 1 sigma OTM as margin allows if they want to replicate my success.


Under no circumstances convert to a limited risk position or hedge.


The key to the strategy is to use the WTF chart study (only available on E-signal at present but being implemented on MedVed Quotetracker) but...here's what really makes it work:you have to use (80,12,3) rather than the default values. When all three plots converge on WTF, you have a 99.8% probability that if you write PUTs at that juncture, you will be profitable.

To be more precise, I have found the optimal strike selection to be based on 0.964 sigmas. For the calculation, the volatility to be used should be between the front month ATM IV and the next month ATM IV. This is where it gets tricky. To be accurate, you will need to do some kind of interpolation using a bezier curve/cubic spline methodology However, the payoff is worth it as my results clearly demonstrate.
More...

LOL
This should be the prelude to your book mo :D
 
Are you looking at any Aug spreads? On the one hand, the general environment seems to be bullish so I'm looking at around 1190/1200 put spreads but on the other hand the market is overbought and so I might wait for a pullback before putting on the put spreads (as long as it does not go below 1260... or if it goes to 1290 first and fails to breakout I'll put on some bear call spreads....

Quote from Aardvark:

oops...Hi Andy, not a paper trade. And yes I did have (rolled to July) June 1245 puts which after rolling have been agressively selling calls to finance the rolling down of the (now) July 1245puts. Today I did roll to July 1235. I'll update in a week or so my progress on the trade.
More...
 
Quote from momoneythansens:

The key to the strategy is to use the WTF chart study (only available on E-signal at present but being implemented on MedVed Quotetracker) but...here's what really makes it work:you have to use (80,12,3) rather than the default values.
More...

I'm gonna have to call bullshit on this one. I have reverse engineered the WTF study in Tradestation by approximating Fcuk with Jurik's Composite Fractal Behaviour Index. Optimizing this for ES during the April 1 to May 14 timeframe CLEARLY demonstrates that (80,8,7) are the superiour WTF parameters. If you only tripled your account...well that just shows how poorly you understand WTF.

In fact, I have fully automated WTF trading and it will begin trading my account as soon as I press this butto.*&^%#@%$@%^*)*^#@____________________________....................
 
Quote from momoneythansens:

We're going to have to agree to disagree on this point.

I have successfully quadrupled my account in 3 months using a naked premium selling strategy: suggest folks HERE sell as many naked PUTs 1 sigma OTM as margin allows if they want to replicate my success.

Under no circumstances convert to a limited risk position or hedge with underlying as that severely reduces profit potential and ruins the probabilities not to mention the effort/reward ratio of approx 12.4:1 (averaged) is not favorable IMO.

The key to the strategy is to use the WTF chart study (only available on E-signal at present but being implemented on MedVed Quotetracker) but...here's what really makes it work:you have to use (80,12,3) rather than the default values. When all three plots converge on WTF, you have a 99.8% probability that if you write PUTs at that juncture, you will be profitable.

To be more precise, I have found the optimal strike selection to be based on 0.964 sigmas. For the calculation, the volatility to be used should be between the front month ATM IV and the next month ATM IV. This is where it gets tricky. To be accurate, you will need to do some kind of interpolation using a bezier curve/cubic spline methodology.

[or a straight-edge to connect the dots]

However, the payoff is worth it as my results clearly demonstrate.

Good luck!

MoMoney.

LMAO. Better than watching "entourage"
 
I cannot tell if you are kidding or not but as a lawyer there is an old saying, an example is not a proof.

I say most people here should not do naked options and I get replies such as "Well you are wrong because I made money doing naked options!"

Can you see the simple fallacy in the argument/position?

Let's put it another way:

Most blue people are tall.

Well I am blue and I am not tall so you are wrong.

The second statement has no relevance to the first.

Quote from momoneythansens:

We're going to have to agree to disagree on this point.

I have successfully quadrupled my account in 3 months using a naked premium selling strategy: suggest folks HERE sell as many naked PUTs 1 sigma OTM as margin allows if they want to replicate my success.

Under no circumstances convert to a limited risk position or hedge with underlying as that severely reduces profit potential and ruins the probabilities not to mention the effort/reward ratio of approx 12.4:1 (averaged) is not favorable IMO.

The key to the strategy is to use the WTF chart study (only available on E-signal at present but being implemented on MedVed Quotetracker) but...here's what really makes it work:you have to use (80,12,3) rather than the default values. When all three plots converge on WTF, you have a 99.8% probability that if you write PUTs at that juncture, you will be profitable.

To be more precise, I have found the optimal strike selection to be based on 0.964 sigmas. For the calculation, the volatility to be used should be between the front month ATM IV and the next month ATM IV. This is where it gets tricky. To be accurate, you will need to do some kind of interpolation using a bezier curve/cubic spline methodology. However, the payoff is worth it as my results clearly demonstrate.

Good luck!

MoMoney.
More...
 
Quote from optioncoach:

I cannot tell if you are kidding or not but as a lawyer there is an old saying, an example is not a proof.
More...

come on phil,

the quadrupled account in 3 months by selling 0.964 sigma out puts should've been enough for you. LMAO Not sure whats funnier, mo's strategy or the posts asking about details about his strategy :D
 
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