Bill Stacy?

[builder2818]

I understand how options work and I have traded them many times, but do not know them at the level some of those on this forum do. I have so many courses, books that I haven't had the time to go through that I got for free online (you can get everything for free if you look in the right places).

Looking at Bill's strategy, he buys options and later sells them when they change in price. Buying $20,000 worth of options over one stock and have it's price change by about 5c or more will have an impact on the price you paid for the options whether it goes in your favour or not. Delta is the important thing here for him. I know the rest of the Greeks but don't know if he uses any of the others when deciding on his entry and exits.

 

[OneDayWealth]

So can you address post #108?
It would seem the strategy I've outlined, trumps your put spread methodology by far.:
Any weaknesses I am not seeing with the strategy?

btw the GOOG prices are as at Friday close [US]

lol, so when you quote 31c on $1 for a 31% return over 30 days [video 3] this is quoting a return on margin :

There is Jan GOOG fly, 2 strikes wide - 570 atm, risk $2.65, reward $17.35.
Using your methodology [video 2] the return is 17.35/2.65 = 654% over ~ 40 days.
The percent per day made is 654%/40 = 16.37% per day. Therefore ~ 6000% p.a.

Just wow!!!
Or have I got something wrong here?
I know you don't trade butterflies, but I am assuming the wealth of experience implies you know about them.

Not sure exactly what method/strategy you're talking about here and I'd have to use the charts and my excel sheet to lay it all out but if I was making that much from a spread (as I have done) these days I would close it the next day or as soon as it gave me a reasonable profit. I don't do the US market so I can't really comment.

1/ But we are talking now of day trading. While I have some sympathy with some of the points above, they are negated by removing overnight risk.

2/ Once again you've shown you don't really understand "margin". Trading CFDs or any other derivative you are trading on margin, but you are not borrowing money as in a "margin loan". It is your own money you are trading with.

3/ Options contain other non-linear risks (AKA the Greeks), yes even on an intraday basis. These are not huge on the face of it, but amplified by the number of contracts you suggest, they can have an uncomfortable impact.

4/ I would argue that you don't know options "intimately" at all if you don't understand margin.

Yes I do. But on the other hand I only understand what I need to understand. I do not know or understand all the greeks and I don't have to. Anyone who thinks they are not borrowing to trade CFDs needs to look at it more carefully but I am not an expert in CFDs and don't have to be because I don't trade or suggest anyone else trade them.

Again, I'm not here to prove I know everything - just my stuff. I (like most normal people) have better things to do with my day than fuss and stress over some little detail that does not affect me. Greeks and an intimate knowledge of option pricing models is not relevant when you are day trading except possibly for delta so you can try to figure out how much an option will rise in value if it went to a certain price - FYI I usually trade .5 delta and above. The yanks prefer to trade .8 or .9 delta which are very difficult to find in Australia unless you are trading in the last week of an option's life which is of course crazy.

When you use a bulk strategy like I do all I have to do is dump 20k on my best direction, wait a few minutes or hours and exit with thousands so I can go out and drive my hot rods. I'm not interested in becoming a "death" trader (someone who holds an option overnight) again though occasionally I must admit the signals are too good so I'll put a smaller amount on an overnight trade but I hate the feeling of waiting and being out of control so I really do try to avoid holding any options overnight.

Especially lately as the normal patterns are not producing profits like they did back when the trends where strong. Day trading options avoids all that by trading only the current daily obvious trend. The downside is that you have to use an abnormal amount of cash (if 10-20k is abnormal for you) to leverage the move and by leverage I mean use the power of the move not borrowing any money.

I mean, how often do you see an option go from 80c-85 or 88c in one day or one hour? All the time right? You guys know that. I just kept working at it until I figured out a way to make use of those trades and I tried every amount from $1,000 to $100,000 on a day trade. I found that $20k was the right amount (50k is the max) but 10k would be ok to start. Seems like a lot until you hear of people dumping $150,000 and 2 houses on an unmonitored put spread trade.

I'm sorry to commercialise this thread again (explaining what I do and what I sell) but you guys have to know where I'm coming from.

 

[OneDayWealth]

I understand how options work and I have traded them many times, but do not know them at the level some of those on this forum do. I have so many courses, books that I haven't had the time to go through that I got for free online (you can get everything for free if you look in the right places).

Looking at Bill's strategy, he buys options and later sells them when they change in price. Buying $20,000 worth of options over one stock and have it's price change by about 5c or more will have an impact on the price you paid for the options whether it goes in your favour or not. Delta is the important thing here for him. I know the rest of the Greeks but don't know if he uses any of the others when deciding on his entry and exits.

I use delta only. The rest relate only to long term positions which I am not a fan of. If I am trading a $1.00 option and there is a .5 delta and I'm expecting the stock to move 20c or more then I know I'll get at least 5% maybe 10% which will be more than enough for me to make double the average Australian wage in one sitting and the most important thing is that all my money will be safe in the bank overnight so I can relax (a luxury few option traders ever experience), have an early night and look forward to a whole new universe the next day.

 

[mazzatelli]

FYI I usually trade .5 delta and above. The yanks prefer to trade .8 or .9 delta which are very difficult to find in Australia unless you are trading in the last week of an option's life which is of course crazy.

Let me confirm...your taking the pi$$, right?

 

[OneDayWealth]

Let me confirm...your taking the pi$$, right?

No, why? Which part don't you understand? And please, if you're going to ask a question, ask a question.

 

[mazzatelli]

Why can't we get an option 30 days out with 0.8 delta?

And please when you answer a query, read the full question

 

[OneDayWealth]

Why can't we get an option 30 days out with 0.8 delta?

Oh I see, yes there are (of course) options with .8, .9 and even 1:1 pricing but they don't have what I call an acceptable "crowd" in the depth. They are there and you can buy and sell them but you would be dealing with the market makers and they are not so generous (as I'm sure you all know). I like to trade where I can see other traders so I can judge the current market price without needing a quote from the MMs. Generally the best trading is (predictably) around the money.

 

[cutz]

All due respect Bill but the fact of the matter is day trading options without a market makers edge is a losing strategy, occasionally you may happen to fluke the right side a move, most of the time you may scratch the trade minus costs, occasionally you may be on the wrong side of a big move unable to get out.

Unfortunately (for you) many won’t even bat an eyelid over 5 days worth of trades, doesn’t mean much to me, my concern is a newbie may take it the wrong way.

 

[cutz]

Oh I see, yes there are (of course) options with .8, .9 and even 1:1 pricing but they don't have what I call an acceptable "crowd" in the depth. They are there and you can buy and sell them but you would be dealing with the market makers and they are not so generous (as I'm sure you all know). I like to trade where I can see other traders so I can judge the current market price without needing a quote from the MMs. Generally the best trading is (predictably) around the money.

If say for auguments sake you could see huge so called "crowd" at delta 1 would you trade there instead, (using options)

In other words if there is plenty of liquidity at all strikes, what's the best delta ?

 

[OneDayWealth]

All due respect Bill but the fact of the matter is day trading options without a market makers edge is a losing strategy, occasionally you may happen to fluke the right side a move, most of the time you may scratch the trade minus costs, occasionally you may be on the wrong side of a big move unable to get out.

Unfortunately many won’t even bat an eyelid over 5 days worth of trades, doesn’t mean much to me, my concern is a newbie may take it the wrong way.

No it's not. I and many of my members have proven (perhaps for the first time) otherwise. What is interesting about what you just said is that many brokers say the same thing.

The fact is that there are HEAPS of easy to trade moves every week...if you know where to look. I also fear a new trader jumping in too early which is why my paper trading exercises (which are conducted live - not posthumously) are brutal and will prepare everyone for what to expect. In fact, I have taken great pains to protect the newbie because that's what I was and no one took the time to protect me. That's where I get my drive...to help new traders like I used to be.

 

[OneDayWealth]

If say for auguments sake you could see huge so called "crowd" at delta 1 would you trade there instead, (using options)

Yes. Every single time. I wish!

There is no one (apart from me) teaching day trading options in Australia (probably because no one can find the usual .8+ deltas) so I had to get all my tips and suggestions from the US option day traders (there are heaps of those) and adapted them for Australia. If we could trade 1 deltas (like they do in the US) I could do it with about $5,000 (not 20k).

I wish I was trading the US day market but 1am to 6am doesn't suit me plus they have some funny laws about day trading and getting your money out of those US brokers is hell on a plate.

 

[prawn_86]

The fact is that there are HEAPS of easy to trade moves every week...if you know where to look. I also fear a new trader jumping in too early which is why my paper trading exercises (which are conducted live - not posthumously) are brutal and will prepare everyone for what to expect.

Why not post your paper trades here then? If you are correct:

1. You will silence any critics
2. You will attract new business

All i'm hearing is a lot of rhetoric and not a lot of examples. You have been given the perfect platform to prove everyone wrong

 

[nunthewiser]

Why not post your paper trades here then? If you are correct:

1. You will silence any critics
2. You will attract new business

All i'm hearing is a lot of rhetoric and not a lot of examples. You have been given the perfect platform to prove everyone wrong

+1.

 

[cutz]

Yes. Every single time. I wish!

Which leads me to my next question, delta one is equivalent to its underlying (for all intent and purpose), CBA and BHP move the ASX200, why not just trade the futures ??

 

[OneDayWealth]

Why not post your paper trades here then? If you are correct:

1. You will silence any critics
2. You will attract new business

All i'm hearing is a lot of rhetoric and not a lot of examples. You have been given the perfect platform to prove everyone wrong

I appreciate that and have mentioned several times that I have many examples already posted on my forum. I haven't paper traded for many years though. I can offer a few (mostly) video examples of what "could" have been taken on several days but most of my examples are real live hand-on-heart trades.

I have also posted at least a month's worth of trades on here before but like I said earlier my statements were removed and I was banned as soon as I offered proof to prove my claims that I am really trading what I teach. I could post a link to the forum (I'm sure Google will tell you) but not sure if the moderators would appreciate it.

My aim here is not to gain business (not that I would mind) but to answer slurs with facts and corrections. I'm grateful that this thread has (so far) morphed into a reasonable discussion again. I would love to promote and be held up to scrutiny from all you guys because to be frank I think a lot of you guys (especially the technical analysts) could make a killing using my methods. I wish I had some of the skills that you guys have I'd be doubling weekly (before you mathematical geniuses start adding up weekly doubling I don't usually compound - I spend!) but you guys could EASILY make thousands a week. You could even start with a small amount and compound it into a decent bank so you are risking mostly the market's money. In fact I teach that people should get into several zones asap.

Buffer zone (where you have more profit than you would normally lose on a bad trade).

Risk Free zone (where you have doubled your money and put your original money aside or back in the bank and are now trading with 100% profit and therefore - in a way - you have zero real risk to money you saved or borrowed).

I had/have big ideas about how people can reduce or eliminate the risks of option trading because it saddens me greatly when new traders throw money away for an avoidable reason such as ignorance of best practice.

 

[cutz]

Why not post your paper trades here then? If you are correct:

Paper trades on ASX options will not cut it, the price taken may not necessarily be last price, stops will not get executed like they do on stocks/futures.

If someone is selling a service, at least 12 months worth of proven actual results should be required.

 

[OneDayWealth]

Which leads me to my next question, delta one is equivalent to its underlying, CBA and BHP move the ASX200, why not just trade the futures ??

Not sure. Just never have. I know options. They supply me with what I need (a few k per week) so I'm happy.

 

[OneDayWealth]

Paper trades on ASX options will not cut it, stops will not get executed like they do on stocks/futures.

If someone is selling a service, at least 12 months worth of proven results should be required.

That would be handy if I traded every day for 12 months but I do not (I trade when I feel like it or when I need to boost my bank account) and what I do is not a gauge for what you can do. You might be a better trader than I could ever be...or you could be much worse, undisciplined and un-practiced. I let the real market show you the truth. I'll show you where to look and you can go and see for yourself.

 

[Trembling Hand]

I had/have big ideas about how people can reduce or eliminate the risks of option trading because it saddens me greatly when new traders throw money away for an avoidable reason such as ignorance of best practice.

might as well jump in too !!

You have to be kidding? You are quoting retun on margin!! For god sake!! You haven't even got on the same page as best practise let alone being capable of teaching it.

 

[wayneL]

Yes. Every single time. I wish!

There is no one (apart from me) teaching day trading options in Australia (probably because no one can find the usual .8+ deltas) so I had to get all my tips and suggestions from the US option day traders (there are heaps of those) and adapted them for Australia. If we could trade 1 deltas (like they do in the US) I could do it with about $5,000 (not 20k).

I wish I was trading the US day market but 1am to 6am doesn't suit me plus they have some funny laws about day trading and getting your money out of those US brokers is hell on a plate.

CFDs have a delta of 1 and tighter spreads.