I have been painstakingly studying the markets for the past ten months. 85% of my time has been devoted to options trading. The other 15% devoted to learning the broad spectrum of futures markets, equity trading, and TA. I have not put much real money on the line in the way of futs, stocks, etc, but have been trading mostly equity and index options with moderate success. I have seen 9 option expirations with real money on the line and have been able to manage my risk well. I know this pales in comparison to many experienced traders here, and now have found myself in a bit of a quandry. I have develped a plan that I have been tweaking and believe it to be reliable. It entails mostly selling front month premium and hedging my exposure by buying further out premium. I have a few other strats, but basically I'm looking to earn an income by being net short gamma. The problem is my plan makes 120-150% annual return. With a very small retail account, I estimate it will take up to 4-5 years before I can pull money out of the account to live off. I understand that hedge funds would eat their young for these types of returns, but I'm just a retail piker swinging 2-5 lots. My quandry is this. I have just sold my prior business for a whopping 15K. I do have contingent salary plus benefits for another 12 months, which really helps. The firm I was contemplating trading with is not condusive to my trading style. Basically you are more or less penalized for carrying positions overnight. This does not jive with my average 30-35 day hold time. They scalp options(then hedge) intra-day, and go home basically flat. Now I don't know if I should come up with another game plan. Should I come up with an intra-day stock trading plan? That route will probably set me back another few months. It'll take a while to develop entry, exit, risk mngmt, sizing, etc.,etc. plus I really only want to trade options. Same thing with directional futures, it'll set me back time wise and if I start trading them w/out a plan, I'll end up wiping out my already teensy grubstake. I guess I'm just looking for some guidance as to what my best bet would be from here on out. Thank you for any feedback and advice.
You should stick to what you want to trade... prop shops and intra-day trading aren't for everyone, and you'll start to mess up the momentum you've got going with options if you keep jumping around. Yet you should also understand that undercapitalization is the primary reason many fail.. so with the kinds of returns you are looking to do, just make sure you have enough to live off of so you're not trading with rent money. It will become a larger psychological burden. You should have enough to sit through some drawdowns without worrying where the money for bills is coming from. Since your style probably doesn't require you to sit at the computer all day, you might want to consider doing that while building your grub stake, either in another business or however you want to raise funds. Sure, you'll postpone the short-term gratification of breaking off and jumping right into it, but in the long run it will pay off and you'll be more prepared for it. Good luck with whatever choice you make, and keep us updated with your progress!
As Paul Harvey would say, and here's the rest of the story. The reason I'm so undercap'd is that I'm in debt. Much of it is from gambling. I went to vegas 2 yrs ago w/ 3K and came home w/ 25K. It was a trip of a lifetime, hookers galore, porn stars even. Played opulent golf courses smoked $25 stogies and usually travelled via limo. I was shooting craps with some hollywood b-listers and rubbing elbows with celebrity, going to the spa, it was truly a sweet trip. Especially for a 50K/yr desk jockey pencil pusher. Anyway I lost much of that $$ and then some here at the local Indian reservation casinos. I was never vibing it there, plus the craps odds sucked, and the dealers aren't, well, they just aren't vegas, ya know? So here I am 40K in debt, some jerkoff is pissed off about some annuity I sold him, and the company is going to charge-back the 9K commission I was paid two freikin years ago! Talk about pouring salt on the wounds. So, this is why I'm only getting fifteen thousand for the remainder of my business. yes, peanuts, i know. Should I just declare backruptcy, wipe off this 40K debt, it's mostly on credit cards and personal lines of credit. I cringe at the idea, but it's been nagging at me the past 18 months. That's another reason I've been such a student of the markets. I want to trade my way out of debt, and make a great living for myself. *sigh* If only I could trade cotton like Paul Tudor Jones did when he started. Maybe I'll play the futures market. I need to come up with a plan though. I dabbled in the metals complex a few months ago in that parabolic frolic, but I was rediculously undercapped the mm's at the nymex basically laughed at my order and gave me shitty fills. Long premium in gold woulda made a killing when gold was moving 30-35 dollars per day. But i digress...
Yeah your PM to me really shows what kind of noob you are. Go file for bankruptcy you piece of shit and stop wasting the time of other members here.