Hey and while you comment for Ironchef... could you please comment for me on wtf Stephen Hawking's book on time has to do with anything. I mean... 30 days to expiration is 30 days last I checked. This I gotta hear.
Why is it hard to double when ITM? Just look for opposite option with .10 cents extrinsic and trade that one. When Long options you are Long vols and taking a directional bet. Vols at all time lows, it pays to be Long vols. But time is key. It could take one hour or one year to hit target but why do you care. You make more money than the rest and spend your time enjoying life. It's a full moon tonight and I will traverse many ponds by boat to get to trophy bass in the morning during the prime fishing time of the year in the Midwest. Focus on the end game and what you can control.
Why limit yourself to 30 days? Why put constraints relative to time when your goal is making money. Time/space as the fourth dimension challenges our formal training. I'm still thinking it through and how to change my mechanics. I know my largest winners were longer term. So 30 days feels like a constraint we impose that increases chance of failure. Focus on time means less trading and lower commissions so Brokers won't like the idea. Read the book and challenge yourself. Costs 20 bucks and the author is a genius.
I like your trading style Stymie, for real, I've read your posts. And I like Hawkings too. But 30 days, 60 days, 300 days, or 1000 days....whatever... at least as it applies to Black-Scholes option pricing... time value and theta are basically derivatives of a decreasing linear scale.
Sorry I don't understand what you meant. So, instead of deep ITM call, I long the underlying and a put, and vice versa? I don't see how I can double unless I go long OTM call instead with the same extrinsic value? Thank you for the coaching.
Black Scholes fails to work correctly within 5 days and greater than 45 days. It also fails to calculate ITM options correctly. Time is the one variable you can control.
Can you provide a link to that so I can read about that? I have never heard that before and the limitations as spelt out here ( https://en.wikipedia.org/wiki/Black–Scholes_model ) make no reference to that. Not doubting you, only trying for advanced learning. But either way, theta is still a derivative of a lineal function no matter which pricing model is used regardless of time to expiration. My entire point to these posts is the 4rth dimension as expounded upon by Hawkings has absolutely nothing to with options pricing over time. Thats some esoteric stuff there. The farther out you go, the more expensive the options. Thats pretty cut and dry in my book. I'm no physicist but I don't think I need to be. Its common sense; esoterics aside. And also...you are not going to double your money (100%) on DIM options as you said without a huge appropriate move (in the right direction) of the underlying....I don't care how much time you give it.
There is probably a reason why TT don't have a backtester. ... or any sort of market replay data. You gottsta get those stats from real trades. That's hSo take your best idea and start there. You won't make 10000% in a year unless you win lottery. Ever wondered why TT don't do a backtester or any sort of market replay???. I guess a good backtester can give some vagirsort of idea if you might have an edge I guess.... But if you get hyped up after finding a 100% return strategy let alone a 1000% strategy.. test it with real $$ to learn a valuable lesson. Ever wondered why the professional platforms by TT and CQG don't have backtesters built in??? Would be an exciting day even if you backtested a 1000% returning strategy. But that would likely have no correlation with live results. Noone gets that sort of return without winning lottery. If you want to make a living from trading then maybe that is a realistic goal.... But it's harder work than a lot of other jobs. Good luck.
Handy helpful tip. Thousands of people "win the lottery" on every draw. Spend a dollar and make two dollars, you "won". What you really mean to say is win the lottery "jackpot".
Wow I guess I just spammed the thread in one post. Sorry for that. Writing from mobile and the text kept disappearing. Lottery jackpot indeed. In short - get your ideas live asap instead of chasing a 10000% return on a backtester. You might just come up with a 20% return system that works in the real world.