Option Trading Strategies

[stockbroker]

I'm an Options/Equity Advisor and have back test a certain strategy on the ETO market with some fantastic results. Basically when the trades are placed at an exact certain period of time before expiry, it provides these great returns and via back testing over a 5 year period, the results showed a 80%+ win ratio on average with an average monthly return of 30%+. We're just about to go live with many clients very eager to trade, but want to know if anyone else has a system on the Options market they find to be very effective with great returns?

 

[skyQuake]

I'm an Options/Equity Advisor and have back test a certain strategy on the ETO market with some fantastic results. Basically when the trades are placed at an exact certain period of time before expiry, it provides these great returns and via back testing over a 5 year period, the results showed a 80%+ win ratio on average with an average monthly return of 30%+. We're just about to go live with many clients very eager to trade, but want to know if anyone else has a system on the Options market they find to be very effective with great returns?

why bother with clients when you can make the money yourself?

 

[So_Cynical]

why bother with clients when you can make the money yourself?

But then they wouldn't make money selling the strategy.

 

[cynic]

I'm an Options/Equity Advisor and have back test a certain strategy on the ETO market with some fantastic results. Basically when the trades are placed at an exact certain period of time before expiry, it provides these great returns and via back testing over a 5 year period, the results showed a 80%+ win ratio on average with an average monthly return of 30%+. We're just about to go live with many clients very eager to trade, but want to know if anyone else has a system on the Options market they find to be very effective with great returns?

So you've already got many clients eager to trade this system!

Did you take market liquidity into account with your backtesting?

Have you identified the impact that market saturation is likely to have on the performance of your system?

 

[stockbroker]

why bother with clients when you can make the money yourself?

I guess everyone's goal is too retire early and just live off their investments and trading but I am unfortunately not at that point in my life yet. My job is too try and make people money and trade for them so i'm trying to find out other peoples views on successful systems that they use to improve returns of my trading and do the best job possible

 

[minwa]

I guess everyone's goal is too retire early and just live off their investments and trading but I am unfortunately not at that point in my life yet. My job is too try and make people money and trade for them so i'm trying to find out other peoples views on successful systems that they use to improve returns of my trading and do the best job possible

Trade the system live before looking to improve. At 30%+/month you're going to make 2000% return per annum. I am afraid not many people can help you improve on that if you achieve that. You will not need any improvement people will be lining up to invest with you if you maintain that for a few years. Good luck though..

why bother with clients when you can make the money yourself?

Why wouldn't you if you had a profitable system ? I trade myself along with other people's money it is extra return for very little extra effort once set up. Have a look at some some Forbes richlists, almost all of them that made their money from the markets trade client's money. I do not know of anyone on Forbes list that got there by trading solely their own money. Leverage.

 

[skyQuake]

Why wouldn't you if you had a profitable system ? I trade myself along with other people's money it is extra return for very little extra effort once set up. Have a look at some some Forbes richlists, almost all of them that made their money from the markets trade client's money. I do not know of anyone on Forbes list that got there by trading solely their own money. Leverage.

Not disputing that part.

Just that if this person is indeed a 'stockbroker' best he can make out of this is a few basis points in comm.
Whereas if he is managing others money that's a few thousand basis points in fees!

 

[wayneL]

At 80% success rate my bet is short gamma.

At 30% per month (really? evryy month?) My bet is leveraged up to the eyeballs in terms of potential deltas.

 

[zac]

At 80% success rate my bet is short gamma.

At 30% per month (really? evryy month?) My bet is leveraged up to the eyeballs in terms of potential deltas.

Hi Wayne,
Ive been keenly following your posts for a while now.
Can I ask what your trading style is and what instruments?

Also with the Greeks Ive an idea on them but ive a rule that if its too difficult to explain easily then its too difficult to get involved with so I just concentrate on options on understanding volatility.
How crucial would you say understanding the greeks in depth are?

When you say short gamma is that like saying someone who is short volatility?
Recently Ive added trades in my account that are long volatility, whether through options or other instruments and has been an excellent move for the unexpected events and reversals.

 

[wayneL]

Hi Wayne,
Ive been keenly following your posts for a while now.
Can I ask what your trading style is and what instruments?

Also with the Greeks Ive an idea on them but ive a rule that if its too difficult to explain easily then its too difficult to get involved with so I just concentrate on options on understanding volatility.
How crucial would you say understanding the greeks in depth are?

When you say short gamma is that like saying someone who is short volatility?
Recently Ive added trades in my account that are long volatility, whether through options or other instruments and has been an excellent move for the unexpected events and reversals.

I trade any and every strategy depending on where the market is and what I think it might do... or not do.

I think ignoring the Greeks is a mistake. The Greeks simply describe how option prices change over time, price movement and vol changes.

You mention being long vola. Vega would help you quantify how long vola you actually are and where to get the best "longness" for your buck. The other Greeks will tell you the cost of that.

They help you make better decisions for what you are trying to achieve.

Once you learn them, they will just sit in the back of your mind and you won't really think a lot about them a lot, but they are there helping you do better.

IMO

Short gamma... generally same as saying short vola.