Mathematical and technical discussion??!! Really?? You haven't reached that level in options trading yet tbh that I would need to involve mathematical and technical discussion when you can't even look at a PnL diagram to see where the potential risks of vertical spreads are. And prove to you?? Seriously??!! It's your trading and your life? What is it that I need to prove to you for?? LOL I already did you a favour by telling you vertical spreads are riskier than you think and showed you where and how you can evaluate the risk. I still need to prove to you??!! LOL The time when you lose everything that you have earned will be my proof. I don't wish losses upon people but to people like you, that's the only way you will learn. LOL Good luck!!
But the problem was already solved! Then this guy came along and unnecessarily continued the discussion and tried to sell me more than I was looking for. Imagine this: I've invested weeks and months hard work, research, and money into this project, then such a guy comes and tells me my work is buggy. When I ask him what is buggy he can't answer. This is very frustrating and de-motivating, since this poses a big investment for me. He should be careful, and most importantly, be correct in his judging of such a work of others. I'm scanning a big list of tickers w/ their options and create a ranked list. The main criteria is of course PL%. But besides this also some other criteria have weight in creating the score. The list is sorted descendingly by the score. The real problem begins after that process: getting the orders filled. For this, one needs automation, so that one can try multiple orders sequentially to get a fill (ie. try one say 5 minutes long to get a fill, if not successful then try the next in the list... so in a round-robin fashion) . I'm still working on this programming part. Of course this is not daytrading. DTEs are less than 3 months. But as already said in other thread: for diversification I need to split my AUM into >= 20 spread positions (ie. in this case >= 40 legs in total), to keep the risk per spread position under 5% of the AUM...
But what makes you decide on the strikes,i.e how wide, how many days to expiration?? It could be as simple as you are willing to risk one to make 3,or you could get a little wilder and talk skew.. Your example of the spread you posted was really wide om a percentage basis..What made you choose those strikes??
It's a delicate issue Still, above I alread gave the answer, at least an important hint... If you can't figure it out, just drop me a PM... Just an old demo scanner output to give another hint, incomplete to the right:
Says somebody who doesn't even know when short option expired OTM there is no assignment and doesn't even know how to read a PnL diagram and I am the one who has to be careful about "judging his work". LOL Sure I will be careful. I really should've been careful right from the beginning and kept my mouth shut. Some people just really don't deserve people's help.
@TheDawn, stop now and just piss off as I don't need any help of someone like you! This thread is my thread and I ask you not to participate in any of my threads. Otherwise I'll file an official complaint to the mods. You are herewith officially warned by me in public.
Hint 3: in this posting I had posted a combination table of 5 strikes in up to 4 legs. With 2-leg spreads the process is similar: just walk all the 2-leg combinations of all the strikes (of all DTEs avail! ), and create for each combination a score... Ie. do a brute-force search for the best ones... Of course you have to "serialize" the strikes (i.e making each a unique one, even if K is same from multiple ExpDates, which usually of course is) by prepending the DTE or ExpDate... This is especially necessary for calendar spreads.
I will do or say whatever I want to whatever thread I like. This is a free country and we have freedom of speech that's protected by the Constitution, something that you obviously don't know anything about. This is a public forum and you own nothing on this forum. If you don't like it, you are more than welcome to put me on "Ignore" or better yet, do us all a favour, leave this forum and never come back. As to this thread, rest assured I will not say a peep more. I have tried my best but I've had enough of the shit here.