What strategies do you guys use?

Rationalize · Jul 10, 2011

Quote from Betapeg:

Utilizing the strategy I have detailed here, what would you employ as a risk management strategy? I see the double premium mental stop as a rule of thumb which could be far surpassed as you guys said. Black swan events are a given. How would you protect yourself?

buy vol on a related cointegrated instrument where the implied is lower -- if such exists.

may be easier to just not-do-what-you-are-doing though..

opt789 · Jul 13, 2011

Quote from Betapeg:

Here is an update of that portfolio I posted earlier this week. FYI, Inception date was June 22, 2011. Profit is now at 3.113%, up from 1.725%. It seems like everything is working so far.

http://www.betapeg.com/updated.jpg

Any more comments, suggestions, or observations are welcome as long as they're respectful.

Here is the previous screenshot in case you missed it.

http://www.betapeg.com/P0sitions.jpg

Nice example of what can happen:
He is short the ZW Aug 950 call, the mark from his screen shot was .5, but the market right now is .75 bid at 16.25.
Obviously the market is not really 16.25, but it shows what happens when the market makers get scared and give ridiculous markets.
Even if he could get filled in the 3.5 range that is a 700% loss from his first mark.

eudaemon · Jul 13, 2011

Quote from opt789:

Nice example of what can happen:
He is short the ZW Aug 950 call, the mark from his screen shot was .5, but the market right now is .75 bid at 16.25.
Obviously the market is not really 16.25, but it shows what happens when the market makers get scared and give ridiculous markets.
Even if he could get filled in the 3.5 range that is a 700% loss from his first mark.

My guess is that we'll never hear from him, and his tail insurance underwriting, again.

ForexForex · Jul 13, 2011

Quote from eudaemon:

My guess is that we'll never hear from him, and his tail insurance underwriting, again.

If it's closed at $3.50 the loss is only $1750.00, minus his opening credit of $250.00. No big deal.

atticus · Jul 13, 2011

It's legitimately a 2.00 offer here. Do not sell up and outs in grains. I've witnessed 30 cent drops in wheat where the calls rally 10 points. Reckless and inexperienced. Can't make any money selling EQ options so he moves to grains. Start with kerosene and move to rocket fuel. I am sure there are some penny bid calls on CL at the 150 strike he can short. Low-hanging fruit.

atticus · Jul 13, 2011

Quote from eudaemon:

My guess is that we'll never hear from him, and his tail insurance underwriting, again.

I suspect it was all paper-traded and no actual funds were at risk.

atticus · Jul 13, 2011

Quote from ForexForex:

If it's closed at $3.50 the loss is only $1750.00, minus his opening credit of $250.00. No big deal.

You and cooolweb should breed. Imagine the heterosis.

atticus · Jul 13, 2011

Quote from Rationalize:

buy vol on a related cointegrated instrument where the implied is lower -- if such exists.

may be easier to just not-do-what-you-are-doing though..

Go vega-neutral on CL/HO a bit closer to the money and you're short significantly more premium with a lower haircut. At least there is some juice there and he's not completely naked.

Trade duration (calendars) or inter-mkt, not verticals/strips.

ForexForex · Jul 13, 2011

Quote from atticus:

You and cooolweb should breed. Imagine the heterosis.

LOL ....... I thought you had me on ignore, you haven't responded to one of my posts in a long time.

wooldog · Jul 13, 2011

My strategy is selling way way way out of the money puts and calls on silver futures.