Without the risk of one big drop taking your account to zero, or significantly negative if you are selling naked like these guys do.
the trick is to go from trading a low vol to a high vol regime, easier said than done. Personally I would rather be short vix at 40 than 15.
who are their clients? 32% loss in a single month would cause most to pull their money out, they must have some insane track records pre-2007 that kept the loyalty.
They did have great gains pre 2007. Between 2008 and 2009 they were relatively flat (which is a lot to say as most volatility funds (long or short) blew up. I suspect most of their money is the founders. He sold a tech company for several hundred million dollars and then met some CBOE traders on the subway. At least that's how Trader Monthly describes it.
CROOKED ROULETTE WHEEL HERE, or STACKED DICE. Straight buying and selling, one trade per week. Well I had a wrong number on my order form last week. I was being careful trying to stay in less than 3 trades a week. Alas, on the Thursday I entered a closing limit order, a dollar below what I intended and got closed out at a loss of -$210. So I quickly re-placed the trade and by the end of the day I was ahead by +$1010, so I closed the trade. This made me 4 trades in a week, which is verboten by the EXCHANGE DAY TRADER RULE. Now I´m a BEGINNER, AMATEUR retail trader, with 10 trades ONLY under my belt, trying to figure out what I´m doing with a new system idea. Trying things, like staggered, trades, or scaling in and out and so forth. Since I´m nervous about my CASH, if I have a profit, I probably do the wrong thing and close out before the end of the day and take the profit. It works out in my very limited experience to about a 50 - 50 luck of the draw, if the next day, the price keeps increasing, or I was smart and would have lost my profit. I consider myself a trend trader, a short trend though in a shorter time frame. I have been trying to get my trades down to 1 a week, but usually because of my nervousness and inexperience, I´ve been frightened out a bit, and closed too early, not wanting to lose a profit, instead of holding and letting the trend run. I was gaining on my account though. So this Monday, I got a notice when I entered into TOS from the exchange, that my total ten trades, two losses and 8 wins, that I have been flagged as a pattern and day trader and cannot trade any more, ( I was forced by my order error, to go to the fourth trade ) unless I either up my account ( originally $10,000 but now $8300 ) to $25,000 required by the Exchange, or I hold a trade overnight before exiting. This annoys me, because I felt I was just getting a feel for it. Trying different things. So, I went to my wife and said I want to make my account $25,000 and need another $17,000. Quite rightly she said no. She said they were crooks, the game is rigged and if they will not allow you to trade with your own money, as you want, then it is a rigged game. No more money. She said, they are out to steal and rip off the new amateur beginning retail traders. I thought about it. Figured she was right, so this morning I made my weekly trade and since I cannot take a profit, if I have one during the day, or at the end of this day, then I would reduce my risk and bet size. It is, even if I am right for my entry, still a 50 - 50 gamble if I hold over until tomorrow, which I apparently must do. So instead of trading 6 contracts which I had worked up to, I would go back to 2 contracts and the $28 win or loss small amounts, that I had been doing. SHAME though. I can´t scale in for risk control, I cannot take a profit, if I have a nice one. Burns my ass!
I think I mentioned this before but its really difficult if not impossible to trade like you are in a non margin account. You can trade forex without margin but that is another can of worms. You should be posting this to the straddles thread or start a journal. On a side note most retail traders are undercapitalized and therefore are swinging for the fences. Trading will make you reevaluate your priorities. Is it possible your time is better spent doing something else. There are lots of great and noble things to do with your time. Some of the "real pros" who frequent this board (there are a few) will chuckle at what you are trying to do as the barrier to real success is quite high. Peace and good luck in your journey.
Kinggyppo Thankyou for the nice comment. I only posted because I´m irrate, and need to let off steam. Plus, a side benefit would be to make other amateurs aware of the obstacles they will have to go through. I posted this to my personal BLOG for my grandkids and kids mostly, some of whom are trading sort of, and some are thinking about it. I´ll work my way around this obstacle, like many others. I´m not a very smart guy, nor overly talented in any field ( maybe boat building, or as a sea captain ), the only thing I have going for me, is damned stubborness and determination, like a bulldog. ( grin! )