Thank you for the kind words and coaching. Not skill, more like having strong conviction and been stubborn. I made a bet that the recovery after 2009 should be massive and durable and stuck with it. Anyone could duplicate/better the return by simply going on margin or the equivalent by longed call options. Why I chose to stop now? I shouldn't push my luck: https://www.bloomberg.com/news/arti...d-the-math-explaining-active-manager-futility You could substitute "active manager" with "trader".
Though I won't post as much going forward, no, not good bye, just an acknowledgement that I received lots of help and coaching from many of you on ET.
Very interesting way to look at the problem. However, to make money, everything comes down to your opinion vs the market.
1. I went to school to learn VBA Excel. 2. Then learned to program GSM, using it to calculate premium, greeks... 3. Programmed the reverse using premium to calculate IV.... 4. Parametrized IV skew, term structure, fed into GSM.... 5. Backtested butterflies using historical price data + assuming certain skew, term structure..... 6. Computed option premium using other distributions (both empirical and theoretical) instead of Gaussian. I am sure I could find all of these from some web services like OATS, for example, but since my full time job was trading, I wanted to get a good understanding of the basics.
Final report card on my butterfly experiment: I closed out the last butterfly trade this morning: BMY 5-21-21 65/70/75 which I set up on 4-20-21 for $161.53. I received $250.75 for the 65 and will let the 70 & 75 expire worthless with a projected net profit of $89.22. Overall, out of 33 trades I had 20 winners and a decent profit. Even though 30 is a small number it is statistically significant. I could probably make a living doing this if I scale it up. Would I scale up? No, I am scaling back from active trading. Thanks again @destriero for the inspiration and coaching.