- Joined
- 15 December 2017
- Posts
- 21
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- 5
I have been trading Iron condors and covered calls IN us markets.for 8 years in Australia through optionsexpress. now shwaab australia, I could not trade outside US with think or swim and setting up a US Company though not costly is complex for foreigners. I email tasty trade and ring them every month for updates on when they will open Australian trading Accounts and the problem at the moment is the protection of the ASX monopoly they are terrible the ASX ,I will leave their restrictictive trade practices and unfair trading for another time. Tasty trade said they are having trouble with ASIC with prudential requirements, GST and legal issues generally, they say Australia and ASIC is really tough to deal with.
I graduated with an Econometrics and and accounting degree in 1991, and have been watching the market since 1987 crash, nothing was a good investment till I figured out iron condors myself after losing with buying options for about a year and a half in 2007-2009, in 2009 iron condors and covered calls became my main game, I would have loved to delta hedge but I did not have enough capital left, I have had to use a lot of my earning to live as I am semi retired. so my investment stays stuck 5,000 Capital but that is enough. I have glanced through most of the txts and most are optimistic and got their hearts in right place, I think I should point out what it is like to day trade for a living the tasty trade way through a schwaab account in Australia. Firstly schwaab do not provide anything but basic information, but they are cost competitive and they are very good for routing trades with fairly good spreads. I subscribed to a dodgy option site which for 35$ for life provides access to a watch list of the hundred most liquid us equity and etf options, their IV rank, and you can select by high volatility and low volatile alphabetical order or etfs only. The rest of the tasty trade stuff I have recreated myself in excel spreadsheets, training my self to be a quant came easy with an Econometrics degree background, and I have worked with spreadsheets from lotus 123 and multi plan from 1986 till 1992 then quattro pro the first solver was there then excel 95 destroyed them all forever, I utilise a realtime stock market data add inn for excel called market.xls I have 3 lifetime licences I bought them ,like my watch list when the companies opened and they offered cheap deals they are expensive now, I think market xls for full service is about $300 AUD a year I got each of my 3 licenses for life for $195AUD If you are a quant market.xls is well worth it, even though most of it is full of technical indicator rubbish, people believe that stuff, but people also believe in big foot, and the loch ness monster, and nostradamuses prophecies. As an aside there is two guys on tastytrade who talk about technicals, they seem to be an unrelated guest team,but Tom and the team and DR data never speak anything about technicals except to prove what a waste of time they are.
Trading Iron Condors was easy for the two years previous to this january 2017 since then with low volatility selling options has been tight and I have lost 500 this year, I have mad a bit with poor mans covered calls and covered calls, because as the market has been going up the higher volatility has been on the call side, and you net more selling them and you can make a bit if the share is exercised which it has, also with poor mans covered calls you make a bit if you buy in the money LEAPS and sell a short term out of the money call. The reason why I lost on the iron condors is not so much the low volatility, but the market broke out the wing and cost a lot to buy back whether exercised or worse before exercise. Al Sherbin ex tasty trade DR data before the current one, and there was a chicogo university maths lecturer there for a while there ,real young guy watch his episodes on the Kelly criterion absolutely crucial. Al Sherbin's book showed me when to set stops according to my trading parameters and risk return ratio and edge, and capital.I have not had a loss since and I am regaining my money fairly solidly..
Apart from AL Sherbins book, if you want to be a tasty trader you must read Sheldon Natenbergs book on volatility quite old now but the original classic on volatility, he has been interviewed on tasty trade on back issues worth checking out I got a laugh when he said, he works for one of Chicago's biggest option writing and market making firms, he said people always ask him if they hire technical analysts or how many fundamental analysts work there he said none, and when they ask why, he said if they did there would be some thing wrong, as I quant I get a kick out of that, it might take people many years to understand why they don't have any, and some might never understand.
Lawrence G McMillans Book on options is essential too "options as strategic investment". I picked up this huge 1000 page plus book at Dymocks in the bargain bin for $5 dollars while the finance shelves are stacked with rubbish, like think and grow rich and dozens of complete systems to lose the shirt of your back, but they require nothing more than arithmetic and luck and not much intelligence.
Another fantastic and essential book is Paul Willmott Introduction to Quantitave finance.
And for excel and financial modelling nothing beats Simon Beninga's Financial modelling
And of course the university text Hull options futures and other derivatives is great too.
I have quite a few secret books, but most are about finance not necessarily just options.
You need to grasp at least at a basic level the maths involved in these books to be a successful tasty trader, other wise you will not understand what or why they do things.
I myself am making most of my spreadsheets available for free on the internet soon, in financial blogs, I will update maybe when they are live. To get up to speed insanely quckly with excel go to youtube and watch Mr excel bill jelens podcasts and Mike 'excelisfun' Girvans podcasts and Bill jelen and Mike do a podcast together called duelling excel. Mr excels books and videos are the best from novices to experts, and so are the writers on his staff at Mr excel. If you aint got tasty trade platform and you want to trade the tasty way you need spreadsheets.However a warning MR excel and mike are not finance guys they are more accounting and general business related, so it is really to just learn to how to use spreadsheets, the best book with full blown implementations with explanations of options is in Simon Beninga's book, Willmot provides them but does not do detailed instruction same with the Hull book.
Most people seem not to understand the basis of tasty trade trading and a lot of people here disrespect it out of complete ignorance of what it is how it is done and the principles, I have spent the last few hours arguing with bitcoin tulip mania traders, I am afraid bit coin happened in the netherlands in 1800's and was first chronicled in the book Popular delusions and the madness of crowds, with tulip mania, but there is nothing so strong as self confirmation bias and wilfull blindness to not see these things.
More about the mechanics of trading an iron condor the tasty way debit spreads , and a brief explanation of their practice of selling strangles and straddles, they do it with controlled risk but I do not have the collateral to do undefined risk trades and generally are not comfortable with the possibility of potential huge losses. I find it tough to be convinced of the worth of undefined risk trades even with lots of cash, I suppose if you have 100million to play with like tom it is fairly low risk.Your returns from trading undefined credit strangles make bitcoin look like babies stuff,more later.
