Karen the Supertrader - TastyTrade Hybrid Experiment

Discussion in 'Journals' started by Sweet Bobby, May 18, 2016.

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  1. Exactly. I fact I even said to Bobby I wish him luck and told him to be careful with the higher ratio of puts given how low the vix is and market risk with upcoming FOMC. This strategy can be done when opportunities arise but most blindly sell the options week to week picking a delta value. I think selling ATM straddles is easier to deal with than far OTM short strangles and provides more controlled risk if market sells off. I would even recommend doing it with ES options so you have access 23 hours a day.... Sunday night - Friday afternoon.

    BUT as I keep saying, I do not sell or did not sell in the past, ATM straddles weekly with regard to the market. I often did it when my analysis of the market and vols made it appear to be a good potential trade. But I would not sell straddles weekly on a regulasr basis expecting to make consistent income.


    ATM straddle right now is about 22.00 for next week expiration.....if market chops for one or two days you make way more than $440...
     
    Last edited: Jun 3, 2016
    #161     Jun 3, 2016
    F_488 likes this.
  2. i960

    i960

    Dude, the pros are hedging deltas (either with the underlying or other options) and/or capping off their risk. You're completely naive if you think "experienced traders" just sit around and sell naked OTM crap all day.
     
    #162     Jun 3, 2016
    Surprise likes this.
  3. Pekelo

    Pekelo

    OK, so here is my theory what happened in 2014:

    If you look at the chart, there was a whipsaw action in a very short time, compared to 2015. The market was slowly sliding down, when in 5 days it dropped 8% then in just 7 days it came back, and in a few days more it went another 3%.

    So it is possible she was already over leveraged, but when the market started to really move, she started to roll, locking in losses and probably increased the call writing to make the losses up. Then the market suddenly turned, and she started to get losses on the call side. After all the sudden losses she was probably wary of writing too many puts, and kept rolling the calls locking in the losses on the upside too.

    Basically, over leveraging and a whipsaw action did her in...

    in 2015 the drop was similar, 10% in 5 days, but the recovery took much longer, it took 3 weeks to come back 6%... It is also possible the Yahoo boys are better at this game than Karen...
     
    #163     Jun 3, 2016
    Sweet Bobby and F_488 like this.
  4. isotope

    isotope

    Afraid of getting screwed, I just closed out the two trades for a small profit (39% of max profit).
    BOT +1 2/2/5/5 ~IRON CONDOR SPX 100 (Weeklys) 10 JUN 16 2115/2120/2050/2045 CALL/PUT @2.90

    Gross profit: $180
    Commissions: $28
    Total trade margin: $2200
    6.9% return on capital for 1 day

    By the way, my damned butterflies are still not filled.
     
    Last edited: Jun 3, 2016
    #164     Jun 3, 2016
    Sweet Bobby likes this.
  5. isotope

    isotope

    Out of curiosity, if you sold 100 ATM straddles, would you delta hedge the position? And what would your delta band be if you hedged?
     
    #165     Jun 3, 2016
  6. isotope

    isotope

    I tried to search on www.tastytrade.com for Karen Bruton, it came up with nothing. Can you please post the URL of the quoted statement?
     
    #166     Jun 3, 2016
  7. DTB2

    DTB2

    #167     Jun 3, 2016
  8. isotope

    isotope

  9. Two trades today. I sold the SPY 15 JUL 16220C(3)/196P(2) with 42 DTE.

    Again, all this talk about Karen and her troubles has got me rethinking a lot of things. So, let me go through my Greeks and y'all play along and talk me down off the ledge.

    Theta is 110, delta is -133, vega is -635.

    The experiment is up $356 for the day. So I'm thinking, on days when the account outperforms the theta, why not buy a little protective put? For example, my daily p/l of $356 exceeded my theta by 246. So, I thought why not use 10% of that daily gain to invest in a tiny bit of insurance? What are your thoughts?

    So, I BOUGHT one 16 SEP 16 150 P(1) for .25 with 105 DTE.

    By the way, Karen's topic with Dan Sheridan has been announced. I would love to be in that room!
    [​IMG]
    Happy Trading!

    Bobby
     
    #169     Jun 3, 2016
    isotope likes this.
  10. Maverick74

    Maverick74

    Bobby, listen man. The way you are going about this is all wrong. You don't set daily theta goals. That's not how you trade. But here is the thing man, nobody on this thread can save you. Most have been polite to you, the truth is, we all have to experience what we have to experience. In a perfect world, people would listen to those with more experience and more knowledge but what fun would that be right? So keep doing what your doing and when the shit hits the fan, and it will, we'll still be here.
     
    #170     Jun 3, 2016
    kinggyppo, i960 and Sweet Bobby like this.
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