Tastyworks is coming

[OmegaTrader]

Don't really have one - One metric i can give you in my Theta number. I try to collect about 30% of whatever my theta number is. So if i have sold a bunch of options worth $1000, I want to keep about $300 of that $1000 at the end of the month.

As for my portfolio, 50% in shares with options sold against, 20% in other options trade like straddles and calendars depending on IV and 30% in cash to defend my positions or ramp it up when IV is higher.

Does that make sense to you ?

So volatility will knock out 70% of your gains from the premiums???

Is that right?

If an equity graph/ data I can calculate what am talking about.

most people on forums are mainly beginners looking for holy grails and i really wanted to avoid them.

we are not that bad, still looking though...

 

[minwa]

This was the main aim of the initial post - most people on forums are mainly beginners looking for holy grails and i really wanted to avoid them.

I found this a bit odd as you kicked off this thread with mentioning of Tasty Trader seeing as they are geared for beginners lol.

 

[Virge666]

So volatility will knock out 70% of your gains from the premiums???
Is that right?
If an equity graph/ data I can calculate what am talking about.
we are not that bad, still looking though...

Not really - I sell $1000 worth of theta. I will take profits at 50% to avoid gamma risk and use my capital a little better, so $500 gone right there. The other 20% is spent on defending trades and losing trades.

As for searching for the oracle... there isnt one mate, i am sorry. There just isnt.

There are heaps of methods that are profitable, and they are ALL risk and return. The more you risk, the higher the chance of return. Trading is a craft, the sooner you just get in there and pick one and then become an expert at that craft - the sooner it becomes easier. Forget paper trading, just trade small, and try and make 1% a month... it is pretty easy once you get the hang of it.

I found this a bit odd as you kicked off this thread with mentioning of Tasty Trader seeing as they are geared for beginners lol.

It is - but tastytrade is a methodology, and it is a very simple one. Most of these forums are full of guys still looking for that one technical thing that makes them rich... and it just doesnt exist. System this and newsletter that and Product A and Product B. You only have to make 1% a month to beat the market... $10 for every $1000 you have in the game... thats it, $10 lousy dollars. Once you look at the game like that and stop looking for stocks that triple their value in 3 weeks, it is just easier.

Anyway - off my soapbox now. My dreams have been crushed by Warrior and I am off to see what country i can move to that supports retail investors.

 

[OmegaTrader]

Not really - I sell $1000 worth of theta. I will take profits at 50% to avoid gamma risk and use my capital a little better, so $500 gone right there. The other 20% is spent on defending trades and losing trades.

As for searching for the oracle... there isnt one mate, i am sorry. There just isnt.

There are heaps of methods that are profitable, and they are ALL risk and return. The more you risk, the higher the chance of return. Trading is a craft, the sooner you just get in there and pick one and then become an expert at that craft - the sooner it becomes easier. Forget paper trading, just trade small, and try and make 1% a month... it is pretty easy once you get the hang of it.


It is - but tastytrade is a methodology, and it is a very simple one. Most of these forums are full of guys still looking for that one technical thing that makes them rich... and it just doesnt exist. System this and newsletter that and Product A and Product B. You only have to make 1% a month to beat the market... $10 for every $1000 you have in the game... thats it, $10 lousy dollars. Once you look at the game like that and stop looking for stocks that triple their value in 3 weeks, it is just easier.

Anyway - off my soapbox now. My dreams have been crushed by Warrior and I am off to see what country i can move to that supports retail investors.

sounds easy 1% a month.
What am I missing..

 

[Virge666]

sounds easy 1% a month.
What am I missing..

Have you got a $10K account, dont answer that here, but just say yes or no in your head.

With a 10K account you can sell premium in single lots on the US market. You will need to be awake early or go to bed @ 2am to get your trades on.

Learn about Calendars and Iron Condors. Look up the research on Tastytrade about both of them.Maybe even a butterfly spread...

Dan Sheridan do a 10K portfolio course for $400 that is well worth while. You just need the course not the mentorship.... Dan Kaufmann has his own gig now and he does the same kind of thing. Both their courses will pay for themselves with the live trades they put on. I made $900 on the last Dan course i did.

But #1 - stop buying stocks. #2, if you do buy stocks - sell 30 delta calls against them. Always sell premium against whatever you own.

1% easy.

 

[OmegaTrader]

Have you got a $10K account, dont answer that here, but just say yes or no in your head.

With a 10K account you can sell premium in single lots on the US market. You will need to be awake early or go to bed @ 2am to get your trades on.

Learn about Calendars and Iron Condors. Look up the research on Tastytrade about both of them.Maybe even a butterfly spread...

Dan Sheridan do a 10K portfolio course for $400 that is well worth while. You just need the course not the mentorship.... Dan Kaufmann has his own gig now and he does the same kind of thing. Both their courses will pay for themselves with the live trades they put on. I made $900 on the last Dan course i did.

But #1 - stop buying stocks. #2, if you do buy stocks - sell 30 delta calls against them. Always sell premium against whatever you own.

1% easy.

why doesn't everyone just do that and make 1% a year?
Why waste time doing anything else?

 

[Virge666]

why doesn't everyone just do that and make 1% a year?
Why waste time doing anything else?

Cause it is boring and it it's a grind. You have to love it to do it.

There is no glory... No doubling you money in six weeks... No real buzz

And you can't do it with a 5000 account. Well you can.. But the fees hurt

 

[Virge666]

From Tom this morning with regards to Aussie accounts...

! I’m looking at every possible work-around to on board you guys from Australia. The freaking regulatory agencies are threatening our clearing firm with huge fines and legal action if we accept even unsolicited accounts from Australia. It’s going to be a battle but we will figure out something….That I promise.

 

[minwa]

From Tom this morning with regards to Aussie accounts...

! I’m looking at every possible work-around to on board you guys from Australia. The freaking regulatory agencies are threatening our clearing firm with huge fines and legal action if we accept even unsolicited accounts from Australia. It’s going to be a battle but we will figure out something….That I promise.

Haven't heard of any broker going to battle with ASIC and passing regulations. I am almost convinced they are well bribed to keep competitors out. Hopefully they make it the more competition the better.

 

[OmegaTrader]

Cause it is boring and it it's a grind. You have to love it to do it.

There is no glory... No doubling you money in six weeks... No real buzz

And you can't do it with a 5000 account. Well you can.. But the fees hurt

The S&P500 index averages are a bit higher than 6%.

1928-2016 11.42%
1967-2016 11.45%
2007-2016 8.65%

Nevertheless 12% will be a good return for a cash covered put seller.

I am looking at what has been said.

So lets say I could make 12% a year.

But I am in Australia, so would invest in ASX200 not SP500.
and get a lot of taxation advantages.

Also the time periods, go from 88 years to 10 years. The times you pick would change the results a bit etc etc

Nevertheless.


Additional returns of 12% the periods using MINWA numbers

1928-2016 .58%
1967-2016 .55%
2007-2016 3.35%


But what about tax....

At a 30% tax rate the return reduces to 8.4% per year.

IN Australia I am getting 50% capital gains discount, around 25%tax rate at top level and 15% at 30% tax bracket

Also I get 30% refundable imputation.

Also if it is really passive, why sell it just will it to the next generation who also don't sell it etc etc

But even if we ignore this

I am making again

1928-2016 .58%
1967-2016 .55%
2007-2016 3.35%

So how much do I need to make it worthwhile

Say I want to make $75,000 per anum

75000/.0058= $12,931,034.48

75000/.0335= $2,238,805.97


so I need between 2.2-13 million capital to make it worthwhile and this is without drawing out anything during bad times.

So unless the strategy has risk adjusted returns, meaning I can gear it.

But without numbers or any proof of that then this is all i can assume.

Why go through all the heart ache and risk all that capital.

If I had 13 million, would I be bothered to do all that?

That is the question..

Also

Looking at the other posts in this strategy around 70% of the premium is lost.

so given 12% return, premiums need to be 40% a year to cover volatility, protection etc etc

There also other questions to think about.

I write a put option and the stock goes up,Ok so i get the premium.

It stays the same ok, so i get the premium

It falls, at what point do I hedge the loss, or do i just buy the shares and wear a loss

ok so what do i do then write more options against the shares..

It starts to get complicated very quickly..

not a lot of surplus at .5% additional return. especially if the volatility of the strategy was more than the market???

Which i don't know...

Haven't heard of any broker going to battle with ASIC and passing regulations. I am almost convinced they are well bribed to keep competitors out. Hopefully they make it the more competition the better.

Asic still has to make sure that brokers are financially sound.......

 

[Virge666]

Haven't heard of any broker going to battle with ASIC and passing regulations. I am almost convinced they are well bribed to keep competitors out. Hopefully they make it the more competition the better.

I am thinking of using relatives in the UK to open the account and trade from there.

Wonder if NZ has any of these issues ???

 

[Virge666]

OK - so you want to make $75K - i am going to ignore tax as tax on derivatives is different to tax on shares. No idea what that is - but check with your accountant.

1. You cant do it on on the ASX - the spreads are too wide, FEB BHP options are always 12-15 cent spread and that just kills your profits. If you want to trade the ASX you have do be more directional. The US markets are 1 cents wide and much less slippage. Lots of liquidity.

You can do the maths on what you need to have to make $75K, my guess is a little over $800K will get you $75K when accounting for whats money is invested. As you get better - it will be a lot less.

But it all comes down to risk - if you want to make more cash - you add more theta, but you also take that risk on. The other part of options that is worth researching is "Notional value" and understand what the option products are you are trading and what they are really worth for each contract.

If you have the capital - there is nothing stopping you selling or buying futures contracts and selling option contracts against it. Just match up the value correctly. this will lower your fees dramatically. Also you have an option of portfolio margin if you really want to leverage yourself up.

As i said before - Risk vs Return. i can give you a system that is proven 98% correct all day long - but you wont make much money.

I am now officially done on the hand holding - if you are truly interested - watch the WDIS series on TastyTrade and that will give you a much better grounding that what i am typing up here.

All the best.

 

[OmegaTrader]

OK - so you want to make $75K - i am going to ignore tax as tax on derivatives is different to tax on shares. No idea what that is - but check with your accountant.

1. You cant do it on on the ASX - the spreads are too wide, FEB BHP options are always 12-15 cent spread and that just kills your profits. If you want to trade the ASX you have do be more directional. The US markets are 1 cents wide and much less slippage. Lots of liquidity.

You can do the maths on what you need to have to make $75K, my guess is a little over $800K will get you $75K when accounting for whats money is invested. As you get better - it will be a lot less.

But it all comes down to risk - if you want to make more cash - you add more theta, but you also take that risk on. The other part of options that is worth researching is "Notional value" and understand what the option products are you are trading and what they are really worth for each contract.

If you have the capital - there is nothing stopping you selling or buying futures contracts and selling option contracts against it. Just match up the value correctly. this will lower your fees dramatically. Also you have an option of portfolio margin if you really want to leverage yourself up.

As i said before - Risk vs Return. i can give you a system that is proven 98% correct all day long - but you wont make much money.

I am now officially done on the hand holding - if you are truly interested - watch the WDIS series on TastyTrade and that will give you a much better grounding that what i am typing up here.

All the best.

800k = 75k

=9.35% per year...

Passive investing is better than your so called 12% strategy.

less time less stress.

Unless there is less risk.

Actual risk of your 12% strategy,I am still waiting or an answer....

 

[Warriortrader]

Anyway - off my soapbox now. My dreams have been crushed by Warrior and I am off to see what country i can move to that supports retail investors.

Im just the messenger...but you now have it from the horses mouth...seeing your quote from Tom.
Let me know, if you manage to think of a work around...

With a 10K account you can sell premium in single lots on the US market. You will need to be awake early or go to bed @ 2am to get your trades on.
1% easy.

Im up every morning at 2:30 am, in winter and 3:30 am our summer....as Virge says, you got to love doing what you do, and I do.

And I really dont have much more to add to Virge's comments on the general tastytrade mechanics. All sound ones, and articulated well.

 

[Warriortrader]

That said, I think it still might be worth using a Demo account, if they can offer one on Tastyworks...the analysis prior to putting on a trade, will be small consolation...

 

[Virge666]

800k = 75k

=9.35% per year...

Passive investing is better than your so called 12% strategy.

less time less stress.

Unless there is less risk.

Actual risk of your 12% strategy,I am still waiting or an answer....

OT,

I am not here to sell you anything - i don't need to prove anything to you. if you wish to learn the method - head to the website and start from there.

The 75K from 800K was an example that all you had to make was 9.35% a year to hit your 75K. Thought it is a nice easy start for a newbie.

Let me give you my performance as of today from July 1 2017. I started with an amount that is a six figure amount. I have 50% in stocks with covered calls and covered puts against them. I have 50% as a trading account for various option strategies and I usually have about 30% in cash which i use up when volatility is high. I trade from about 6am in the morning till 8am in Summer and from 11:30pm to about 12:30am through winter. Not sure which season i prefer to be honest. but about 2 hours a day, maybe a bit more with research.

As of right now looking at my IB portfolio. I am up 22.7% for the Financial year. I was bit higher than that before December but that is how the cookie crumbles. Slippage and fees are around 4-7% presently and if i can figure a way to get a Tastyworks account - the fee reduction amount will increase my returns another few percent.

If you think that the above is agreeable with your trading plan and lifestyle - you know where to go. If you think i am a Charleton selling snake oil and a newsletter, then please continue your search for the grail elsewhere, may i suggest trading the London breakout strategy on the cable if you want some higher returns with smaller capital

 

[Virge666]

That said, I think it still might be worth using a Demo account, if they can offer one on Tastyworks...the analysis prior to putting on a trade, will be small consolation...

They are not doing one... or the last i heard was that it is only the very bottom of the list. Tom personally hates paper trading.

I have noticed the analyse page is also getting the boot... but i think the backlash will be too high for that to last. I reckon they will mod the "curve" to be the analyse page... or something close to it.

 

[Warriortrader]

OT,

..... from July 1 2017.

July 2016, I think you meant...

OT,
.... I am up 22.7% for the Financial year. I was bit higher than that before December but that is how the cookie crumbles. Slippage and fees are around 4-7% presently and if i can figure a way to get a Tastyworks account - the fee reduction amount will increase my returns another few percent.

Thats good stuff, however, you do not need to prove yourself to anybody...
AND
I am happy to support every endeavour to help us with a Tastyworks account. Last year, my total Comms exceeded 31K USD...I had over 3500 trades during the year..but E*Trade comm structure wasn't the greatest, but I have now negotiated rates that are comparable with Tastyworks. That said, Im not keen on Tastyworks for their comm structure (that helps of course), but their platform is much like ThinkorSwim, and better...if you traded on E*trade...ha ha...well, never mind

 

[Warriortrader]

They are not doing one... or the last i heard was that it is only the very bottom of the list. Tom personally hates paper trading.

I have noticed the analyse page is also getting the boot... but i think the backlash will be too high for that to last. I reckon they will mod the "curve" to be the analyse page... or something close to it.

Quoting Tom from an email response on the 6th of January 2017
"I have a few ideas and we maybe even have a workaround. Australia caught me by surprise. I forgot about all these idiotic regulations. So, I’m working on both, a demo and a real account. I hear you.
Tom"

Might not be a paper trading one..but one where we can run a few analysis...much like you can do on the Demo version of Dough.

Hearing Tom's presentation to Dan Sheridan's team (google it or You tube it)...you will see that he plans to change the "Curve" view of a trade into a semi-analyse page in the coming releases...and if you listen to him today "confirm and send" I think it was, he defends his decision...but, like you said, lets wait and see.

Thanks for your responses.
WT

 

[OmegaTrader]

OT,

I am not here to sell you anything - i don't need to prove anything to you. if you wish to learn the method - head to the website and start from there.

The 75K from 800K was an example that all you had to make was 9.35% a year to hit your 75K. Thought it is a nice easy start for a newbie.

Let me give you my performance as of today from July 1 2017. I started with an amount that is a six figure amount. I have 50% in stocks with covered calls and covered puts against them. I have 50% as a trading account for various option strategies and I usually have about 30% in cash which i use up when volatility is high. I trade from about 6am in the morning till 8am in Summer and from 11:30pm to about 12:30am through winter. Not sure which season i prefer to be honest. but about 2 hours a day, maybe a bit more with research.

As of right now looking at my IB portfolio. I am up 22.7% for the Financial year. I was bit higher than that before December but that is how the cookie crumbles. Slippage and fees are around 4-7% presently and if i can figure a way to get a Tastyworks account - the fee reduction amount will increase my returns another few percent.

If you think that the above is agreeable with your trading plan and lifestyle - you know where to go. If you think i am a Charleton selling snake oil and a newsletter, then please continue your search for the grail elsewhere, may i suggest trading the London breakout strategy on the cable if you want some higher returns with smaller capital

Thank you for being so detailed 22.7% is a good number by itself. risk details etc etc

Anyway my post is off topic now for the tastyworks is coming narrative.

Thanks