VERY GOOD. I'm looking forward to the results. Keep us updated. The 180% P.A. option trading system looks promising.
Ok, I finished my research on this problem. Good news here too: Since we are always hedged, then an early assignment does not make any difference, So, then the European Style options requirement is not necessary at all! We can use this system with all option types (American and European), ie. also for all stock options. FYI: "Early assignment" means that the counterparty (called "option holder") wants that we as the seller immediately fullfill our obligation from the options contract to deliver the stock. - all US indices have European Style options (early assignment not possible) - all US stocks have American Style options (early assignment possible)
Here are the details for SPY (assuming Put premium equal Call premium, though in reality they differ slightly): Stock: SPY LastPrice at Close today=209.24 CallOption: SPY160520C00209000 2016-May-20 Strike=209 Call=2.94 (--> http://finance.yahoo.com/q/op?s=SPY&date=1463702400 ) Then the PnL would be (at 2:1 margin use): sys14: Contracts=1 (1 short Call) CreditRcvd=1 * 2.94 * 100 = 294 StockPos=209.24 * 100 = 20924 UserPart=20924 / 2 - 294 / 2 = 10315 (the basis for the PnL calcs) MonthlyPnL = 294 / 10315 * 100 = 2.85% AnnualPnL = ((1 + 2.85/100)^12 - 1) * 100 = 40.1% sys15 (the combo-system): Contracts=2 (1 short Call and 1 short Put) CreditRcvd=2 * 2.94 * 100 = 588 StockPos=209.24 * 100 = 20924 UserPart=20924 / 2 - 588 / 2 = 10168 (the basis for the PnL calcs) MonthlyPnL = 588 / 10168 * 100 = 5.782848% AnnualPnL = ((1 + 5.782848/100)^12 - 1) * 100 = 96.32% As said in the previous posting: since the requirement for European Style options is no more necessary, we now can use these systems also with any stock options. Then there could be maybe some better ones than the above SPY index. I'll soon do a "gap analysis" of all the US stocks...
This is scary to me! He's likely to cause tremendous upheaval in the worldwide market system with this incredible new option trading system. He will take Billions (Trillions?) out and make us all paupers! We just can't see how great it is because we are all so dum.
Here are the criteria to look for a good stock to be used with these systems: 1) find a stock with high historical volatility: HV should be at least about 30%, the higher the HV the higher the credit (ie. the profit), but a higher HV means also riskier due to bigger gaps... Ie. HV is then like a leverage... 2) the stock should have as small overnight gaps as possible (remember: overnight gaps are the enemy of these systems, though statistically only half of all the gaps are possibly harmful (depends on whether the current spot is near our initial entry level), and the other half is a benefit. 3) the stock should have a good average volume, so that an entry and exit (for hedging) is easily possible
No, unfortunately it's not me, because I myself lack the funds for trading. I'm at the moment only doing theoretical research and simulations, not real trading. But, since the cat is already out of the bag, others around the globe will make use of these systems and get rich...
I never thought that I'd be able to witness the Dunning-Kruger effect in all of its glory, but, boy, was I wrong! This is special...
Samuel11, you are wrong. In botpro's simulation the SPY is a European option. It also trades 24/7 including holidays. Sometimes it will even trade on katilsday. http://www.urbandictionary.com/define.php?term=Katilsday