Are you being deliberately obtuse? I was specifically referenceing the phantom vol ramp due to IV math. The IV expansion in QCOM the morning of Oct. 31st was either market participants repricing anticipated earnings spike, or maybe it was all your subscribers piling in, bidding up the straddle. If the former it is a 50/50 bet as that repricing can go either way and with your trading costs (slippage and comms), your subscribers have to win even money bets 70% of the time just to break even. I realize it is impossible to argue with you. You'll just keep posting until I, and your other critics, get tired of arguing. You'll bury us with an unending barrage of posts that ignore the substance of the criticisms. I won't post any more in this thread, but I leave you with one final thought: Where are the options signal services from 18 years ago? Or from 11 years ago? These services, claiming un-audited returns usually of around 5% per month, seem to proliferate in mature bull markets. Major bear markets clear them all out. We'll see if you survive the next NBER recession.
See bold and underlined remark; you are making my point. To make the moves comparable and draw conclusion about the (un)desirability of a trade you should calculate in SDs. The OP (and I really mean the OP whom I was reacting to) pointed out that JnJ tended to move only 2.4% - this may or may not be meaningful in terms of option pricing. My converting it to SDs you get a better idea of the move in relative terms and can decide how much risk you want to take - in principle 3 SDs encompass all movements however its also known that empirical study has proven these basic statistical models do not correctly encompass all moves otherwise anytime options would be priced at 3SD or higher you'd have a free lunch
That is the definition of slippage. If you can not get filled for what ever reason at the posted price, then that is a tracking error from the signal service. If you take all the signals, then these tracking errors accumulate. One month (even one year) outstanding return is one thing, but maintaining Sharpe Ratio of above 2 is different matter all together for 5+ years. If you are comfortable answering could you tell us what is your typical number of contracts that is traded per trade. I am assuming 2 per trade for typical $10,000 account size, but i think it is too low.
Very interesting. These type of scams returns in every bull market in some form or the other. That is why behavioral economics is such a hot topic now.
Are you really getting 10% slippage? That seems really high. That means for 344 transactions, assuming consistent slippage then total slippage is 3440% not 34.40% as i posted earlier
You continue calling it long risk premium strategy. I mentioned several times that straddles are only 20-30% of our model portfolio. The rest are various selling premium strategies and volatility trades. We maintain a mix of strategies to balance portfolio risk.
How can a small retail player search the 2000 companies and be able to predict better than the market? I go single directional if I can predict better than the market. As a small mom and pop retail players we do have the following advantages: 1. We can pick and choose when where and how, no need to worry about quarterly results, 2. No boss or company to restrict what we can trade and at what risk level, 3. We can focus on a few companies and know them really well, 4. Few professional/institutional traders care to trade thinly traded instruments... So, yes if we avoid your playground we do have a chance.
10% slippage on straddles would mean that the price change really is due to the piling in of orders. The strategy that I heard of utilising this increased volatility requires the opening to be delta-neutral - so smack on a strike price is the best. Normally on a straddle sale call/put parity would mean that prices remain stable. However as ever when demand spikes volatility increases and hence the price of a straddle would increase. It doesnt take much to go up 10% particularly on less massively liquid stock options but for larger stocks it shouldnt happen - more likely the stock moved away from the strike price and the purchase is no longer delta-neutral. Just my 0.02$ By chance as I examined this I came across this article that looks at the VIX in earnings season and claims there to be a correlation between a higher VIX and the arrival of earnings season: https://www.moneyshow.com/articles/optionsidea-41414/# Just another reflection of a rather plausible phenomenon.
I never recommend following anyone blindly. You always have to understand what you are doing. This way members are able to take advantage of our discussions and also unofficial trades. And as you mentioned, many times it is possible to enter the trades a day or two later. Here is an example of a member who entered the QCOM trade a day earlier and booked 60% gain while our official recorded gain was 14%.
No it's not. I never claimed it is. We have other services that don't have capital restrains, but recommended capital for SO is 10-100k.