I remember her saying that in order to avoid the next flash crash she would start using bollinger bands. Well Karen, I'm not sure how bollinger bands would save you from the next flash crash (If). Mbey she could swing of them and send herself up into subspace away from any negative account balances. Then she was like "its the Theta, you just hold the options and they decay and you basically make money". GJ Karen. Now she may never get attacked by a graceful black swan, but if she gets hit by a CHF similiar event, well, I know many companies went under because of that and when she sells options as she does she puts herself in a very risky place. The only thing I like about what she said is that she was starting to use different strategies as well, I think she said spreads. Selling outright like that would create sleepless nights for me. I'd probably chew my arm off X(
I believe your memory is erroneous, she did say she uses Bollinger bands but not that she'd use them to avoid the next flash crash...
CBC, with all due respect, and as an avid student of Karen's method who has reviewed the Karen videos in excess of 100 times, she said basically nothing that you indicated. Unless you have reviewed the entire video of hers at Dan Sheridan's event in the summer of 2015 and she said those things in that video (which I did not see) you are completely wrong and I have to sniff out inaccuracies on my thread. She never said that she started using bollinger bands to avoid the next flash crash. She did say that she uses bollinger bands. She does not use spreads, though she may at times at a long option if she started to get in trouble. Folks that think that Karen is going to blow up her account have no idea of how she manages risk. Karen lives on the analyze tab and is always stressing her account. She can have losses, some could be big, but she will not blow out her account. I appreciate your contributions to this thread, but I have to call out things that I know to be inaccurate. I do suggest that you review her 4 videos again as well as the ten minute clip with Dan Sheridan on YouTube. Happy trading! Bobby
Seriously? "living" on the analyze tab of a retail punting app is not even remotely risk management. You will get smoked in the long term with this strategy. Hell, you'd probably be *safer* over the long run selling ATM straddles than these short delta/short gamma OTM nukes.
Please e Rather than criticizing our methods of risk management, could you possibly share your enlightened methods of risk management for those of us who would like to learn? Thanks for having the heart of a teacher! By the way, just guessing, but you don't know how to utilize the analyze tab, do you? It's okay. It's not for everyone. We often condemn what we don't understand. Bobby
There is no risk management of any sort by LOOKING at an analyze tab in TOS or any other program. If you're going to sit here and tell me jacking around with vol-jump settings in the TOS analyze tab is some form of risk management I'm going to laugh right at you. The only form of real risk management is to have active orders or fundamentally offsetting/hedging positions in the market that will be able to guard against a real move you have no control over. It doesn't matter how much modeling you do, "sell puts and hope" is not a form of risk management. It's an account liquidation waiting to happen.
You haven't even looked at my trade log, have you. Yes I have offsetting hedge positions on as well as GTC orders on all my positions. This is not at all about blindly selling puts and hoping. I hurt for you not being able to understand my strategy.
Where are the "hedge positions" in the log that you posted earlier? Are you accounting for their eventual losses in your P/L? GTC orders are a half-ass form of risk control, particularly when you're trading SPY and SPX - you will get smoked on a gap down like 8/24/2015.
Why not try to understand this simple strategy rather than coming in like a damn bully trying to destroy and crash everything with a ball bat? If you have something constructive to add then do it. Otherwise, shut the hell up you insignificant newbie. You know nothing. Now get back to losing money and chasing every snake oil system on the planet. I'm glad you're in the markets. You help keep my kids fed!
My first very successful strategy was based on condors and short strangles.. Until I blow 60% of a my account in less than a day. Not too bad after 2 years of great profits, my account was almost back where it was 2 year before. I considered myself lucky. I learned that bad real time events can and will happen (again) when the US option market is asleep and closed. I am definitively not a supertrader and happy not to be one