Notes: My account seemed to be around $498K on Friday, but TDA recalculated option values overnight. This happens almost every night, so the value does fluctuate a bit from day to day. Some of my option contracts are illiquid, but not horrible in terms of getting in & out. I’m 90% sure I have some (multiple) of the most efficient methods of extracting alpha out of options skew, including protection from jump risk. This can be confirmed mathematically, logically, and intuitively, meaning that the methodology can be understood and traded with a degree of confidence, even though it was found with the help of machine learning. I’m also 100% sure that I’m inefficient at utilizing it. It’s easy to become cocky in a bull market when everyone makes money. I just regularly post my P&L online (on Twitter/X) due to confidence in the long-term sustainability of my approach. I definitely wouldn’t make so much profit without the bull market, but the goal was to get bullish at minimum cost, and it worked, just better than expected. In a whipsaw market I may be just trying to balance the account. I’ve also had decent wins on bearish trades and could focus on building bearish positions at minimum cost, which would then require a bearish market to make excessive profit. I still do mix in some bearish trades, while even some bullish trades may turn out bearish (I’ve lost money on those, then learned how to use them for hedging). Most of my trades are at a debit and with limited risk, which is much more difficult to balance and continually grow than collecting credit & theta as many options traders do. Though, I also try to collect theta on those debit trades. And I enter some trades at credit, some with unlimited risk, sometimes offset with other trades with unlimited profit potential. Alpha often comes from combining somewhat different, even opposite strategies, sometimes at once, other times layered across time. I face the risk of large drawdowns, but most of it is from large profits that build up. Meaning that I don’t expect to lose more than I put in (which can be 10% - 20% of capital), but if I make $100K, then theoretically I can lose that $100K if I don’t close trades on time. Also, as stocks get more overpriced, my new trades have an increased chance of failure as it gets more difficult to find alpha in a bull market, including the skew no longer expected to reverse from bearish to bullish. Thus, my % profitability is expected to decrease. I started the account with $200K in Sept 2021 but didn’t trade as much until May 2023, as previously I was still researching and backtesting a variety of option strategies, often unable to get fills on my favorite trades. One of my strategies was making a decent profit, which was later offset by a different one that didn’t work as well as in backtests. Later I figured out the problem, as well as experimented with and finalized new strategies. Machine learning/AI has very limited value in options trading unless accompanied by thousands of hours of back-and-forth interactions, continually analyzing problems and feeding new ideas and solutions to the ML that it can then re-test and optimize. AI can do a lot of things in terms of analyzing and summarizing data, but it won’t come up with hundreds of original ideas and solutions. It’s all about problem-solving, with ML being just one of the tools to use. My original goal was to finalize research and find the optimal methodology of trading options, then proving that it works. Possibly I’m nearly there, except now trading and managing trades consumes all my time. It also became boring and mechanical, just reviewing millions of possible trades and placing orders for whatever I may pick. It can be fun when making money, stressful when losing, but also lacking purpose. I was going to publish some research, but then found more alpha than I expected, and many furus reselling everyone else's stuff. I want to code some new stuff, maybe an options trading platform, maybe release some alpha in chunks. To be continued…
Could be days or weeks, occasionally more than a month. I usually have to sell them when there is substantial profit, not wanting them to expire worthless. Many of them have legs expiring at different dates/DTEs, so at the latest I also close the whole combo when one of the legs expires (ITM or OTM). Though I trade multiple strategies, sometimes including stuff at credit that can expire worthless (ratio spreads, diagonals at credit, calendar ratios at credit, etc) Each of my trades may have different number of legs and contracts per leg, depending on the skew/vol surface, sometimes requiring different handling/management.
What do you specifically mean when you talk about skew/vol? Option traders often use this word, and I am often at a loss.
Yes, that’s me. How is he calling me fake? On what basis? And isn’t he calling everyone a fake? I saw one of his Tweets a long time ago calling one of my $TSLA risk profiles a fake, then he blocked me so I couldn’t respond. That’s actually legal libel. My daughter is studying law at Northwestern, so I may sue his ass in the future if he continues doing so. And if he thinks my returns aren’t possible then does it mean that his returns aren’t possible? Btw, I believe he is very good and I even recommended his course couple times to others. I’m pretty sure some of my SPX trades are very similar to his. I can also replicate some of his exact SPX trades (calendar fly, sometimes multiple ones layered, sometimes hedged with $ES). But I’m not focused enough to spend time trading just that and manage such trades. I have a scanner that shows me such trades when best opportunities show up (during low vol that’s projected to increase, or prior to CPI/FOMC, or when specific skew forms). But I also have scanners that show other similar trades on SPX, like low vega calendar flies, high vega calendar ratios, layered calendar flies and ratios, various other 3-legged and 4-legged structures, which can be further layered into more complex structures. When I showed him one variant he criticized it and exposed it to everyone else. I was going to repay him by exposing his exact fly trade and making his method public domain, but I’m not a dick. And I do give him credit for showing what’s possible in options, which then made me look for related stuff in my backtests and zoom in on similar strategies. I probably made 30%+ of my returns this year utilizing that group of SPX strategies. But I also have thousands of other strategies that I converted to custom scanners that seek various trades on every stock/underlying, so I have a wide variety of stuff to trade. I might not make much money trading a single underlying, so it’s the diversity/universe of underlyings and options that offers sufficient opportunities. There is even more alpha in mixed underlyings like SPXS/UVXY, or even mixed options on UVXY/UVIX, which no sane person will find manually, but it’s possible to find such alpha through backtests. So sure if can look like a fake. Anyway, destriero has a choice to either criticize me due to treating me as a competitor, or figuring out how to turn this into a partnership opportunity and a serious biz - especially if he thinks I’m doing this as a biz that will compete with his. I’m not ready yet but have some ideas and may approach him in the future. Or not.
You're deus? You're the dude living with his parents working full time as a factory worker? What's to say? How many Twitter aliases are you using now? The last DM you sent was your attempt at a skew lock on index where you unclicked index in the stress and hid the actual ticker -> in which you boosted vol on the (hidden) ticker. I called you out on it and took a capture -> blocked you. You know exactly sht about the SL. You started a Discord and got doxxed for that from your own subs. You're welcome to share our PMs. lol hedge with ES. Yes, you're a fraud. Happy New Year.
@guru (deus): if you're going to scam then at least make sure the ticker is active and that you're not hiding the vol-shift. It's shitty, scammy and transparent. Competitor? I know otherwise but hope that everyone achieves success. I was the first ETer to "like" your opening post to this thread (before I knew that you were deus).
lol missed this. All of your risk profiles are massaged/fake. You have a pattern of posting risk profiles where the ticker in question is unchecked/not active. That's a problem... post the tweet! Here's me. Continuing to do so. Hit me up and I will PM my name/address/phone.