Only made $2,200 last month & probably only going to make about $4k this month. Been spending too much time on my option program to make money trading options However, the programming I've done will give me better information & should help me in November and beyond.
Well, I don't want to give away too much of what I'm doing - on one hand it doesn't really matter, but on the other I've had a life's worth of experiences of having employers & others take credit for my work... Basically it's pretty comprehensive employing brute-force, an expert system, optimization, portfolio management, statistics, and risk management. Some of the commercially available software I've seen does a part or two of this & maybe somewhere there's a system that does all of it. It's nothing I'll probably ever end up selling because if I'm uncovering market discrepencies that allow me to make money, then if many people make those trades, those trading opportunities will no longer exist. Besides, I've written other programs which have required a lot of work to make them universally usable and which require a lot of support - I'm not trying to add to my workload!
Hi . Could you elaborate a little on advanced gamma scalping? In equities, SP? Most of the traders I've read or heard from seems to consider gamma scalping a way to finance the decay of their long options until that big move turns the same options into homeruns. your post seem to suggest that the gamma scalping is the pnl generator in and off itself. Anyone of you guys heard of dispersion trading? Any thoughts? There was this interesting article in thestreet.com about it. Sems like the exclusive domain of institutions. Why can't it be done on a retail level?
I have found there is a lot of money to be made on gamma scalping. However, you need access to market maker margins to really make it work or a large amount of capital. I use to trade gamma very aggressively. I've found that if you can cover the cost of theta plus 5% or so you can make really good money with very very little risk. Keep in mind you will also have those gap plays and huge vol moves that happen a few times a year that will add nicely to your returns.
Are retail brokers not allowed by law to offer risk based haircuts or is it because most risk dept of broker dealers don't know a put from a call?
Retail customers, not retail brokers are subject to reg t margin requirements. The key is not in finding a different broker but changing the structure of your business from retail to professional. As long as your a retail customer, it does not matter where you go.
Just spoke with a broker and he said that their experience as mkt makers enables them to offer risk based margin on equity options much like the floor guys have. He said main advantage is they would offset short options against stock or long options so $ won't be tied up as compared to other brokers. Ex. Trader puts a fly, other brokers would tie up cash due to short 2 options but they would not since the two shorts are offset by the wings. Is there anything else I would be gaining by joining an options JBO that I won't have by opening a retail acct with this broker? Thanks.