There's a misunderstanding here. onthemoney3 said: "I think everyone would like to see live calls." In my mind, I have always thought a "live call" is publishing a trade before "anyone" has been filled. I have always intended to publish my trades with a minute or two after my fill and still do.
Okay glad you cleared that one up, and are really reading my civil posts. Care to clear up the other comments? I dont think anyone would take issue with a live call being a moment or two after you got filled. On the other hand a spread sheet of old trades hours or days afterwards is a different story. Thanks
âEach evening I record the open, high, low and close of specific SPY call and put options. I then plug this data into a 3 completely different computer programs. The Trending program is a math formula than looks for numeric trend changes (or trend continuous) in the data. It simply outputs there is a call trend, or a put trend.â I imagine this would give you something like a pivot point ( high = low + close/3 for the option. Does the program give you entries and targets as well. Dipper17 it is debatable whether prices have memories, especially if you believe in gap fills. Mandelbrot's cotton paper in an interesting read, writtten in like 1965.
King I would agree with you if we were talking about the price of the underlying. There is surely a worthy debate on the merits of gap fills with respect to traded products other than options. Options are a derivative of the underlying, their price is basically predicated on time, implied volatility, the price of the underlying and the risk free rate ( there are some variations with respect to the different types of contracts and underlyings, but those are the main four for the purpose of this thread). The previous days range is virtually meaningless in tomorrows price.
Average opening gaps (not filling the â¦) are extremely important to me ( gamma scalping). I check all kind of moving averages ( Hi-Lo , Hi-Close â¦) too before taking new position.
IV yes I agree they're important on the underlying, not for the options price. Jeff is implyig that tomorrows options prices are based on comparing those factors in options prices going back 20 years.
Not exactly. I can see you need more details to understand. Let me take another shot at this (without totally giving away the farm): Lets take two options on the same index, a call and a put that closed approximately in the 2.00 to 3.00 range. 1: The relationship between the "open" and "high" of a call option is different (bigger or smaller) than the relationship between the open and high of the put option on the same day. 2: The relationship between the "low" and "close" of that same call option is different (bigger or smaller) than the relationship between the low and close of that same put option on the same day. 3: The relationship between the prior close to the current close on the same call option is different (bigger or smaller) than the relationship between the prior close to the current close on the same put option on the same day. The "relationship" of Numbers 1 thru 3 above are identifiable trends. Up, Down or Neutral. Lets add 3 days of these trends together for the call trend and 3 days of these trends together for the put trend and we call this the short term trend. Now lets add 9 days of these trends together for the call trend and 9 days of these trends together for the put trend and we call this the long term trend (with respect to trading time frames). Now lets introduce these short and long term call and put trends into programmed formula's that can recognize when a certain calls trend (short and long) and a certain put trend (short and long) taken within the same 3 and 9 day periods of time, have certain identifiable characteristics that match decades of same data characteristcs and react reliably in a certain direction: Up, down, or neutral (Call, Put or no trade). Programmed algorithms were a part of the equation. Hoped that helped a little.
I always say, if it works for you then it doesn't matter what the others have to say. You can trade off tea leaves or wind direction... Forget about explaining the method, just make the calls if you want/need to, otherwise I don't see the point of you defending your trading strategy.
Not trying to be OT, but what would draw you to trading if you already had major health problems involving arrhythmia and high blood pressure? In all seriousness.