Dolemite Thanks for your interest. No the prices probably are not realistic. I am actually doing this on real paper with a pen. I am giving a couple of cents to the real time straddle price. I mostly just want to familiarize myself with the workings of the index and the effects at this point. Though I do plan to do a straddle cash trade tomorrow. I¨m trying to get an idea of several things at once. My trend change indicator, if it works. And how well? How long it takes a straddle to cover 2 strikes in the SPY. What that does to the premiums and so forth. The actual trying to make money at this point is secondary. I´m just learning the ropes.
If you are using Yahoo Finance for quotes and Interactive Brokers for trading just add $0.01 when buying options and subtract $0.01 when selling options from the quoted prices. Yahoo Finance portfolios allow you to enter the price for long and short positions and you will be within pennies from a real trade with IB.
Forex Forex My apologies. I haven´t even signed up on Yahoo Finance yet. Will do soon. What is IB? My mind puzzles problems overnight. Learned C++ once, and took a course at the Community College. With the intent to doing programming. I found that my mind wouldn´t shut off when I slept and thus it exhausted me. End of programming idea as a vocation. Anyway, to get to the nitty gritty. The weekly bar in a confused market, seems to achieve a movement in the SPY of 2 strikes during the five days of the week. That should provide a profit, using 6 to 8 week options, to minimize the effect of THETA. The trouble with a 5 day week,is that you do not know if you are starting the week, at the top, middle or bottom of the bar. So instead of diddling with strategies that rely on changing the straddle to a directional trade, I´m beginning to think Eudamon is right. Leave the STRADDLE alone as a non-directional trade. Treat it as a spread. I like his idea of AVERAGING if you get the expectation to direction wrong. As to those who insist the STRADDLE is a Volatility trade, I am not sure it is. Certainly you make a profit quickly and a good amount when a volatility balloon occurs, But if you are trading every week, then just being often in the market through a week, should catch the volatility balloon, when it occurs. You do not actually have to plan for it. Just take it as it happens. As somebody told me on here, I just got LUCKY when it happened early in my trying to understand the STRADDLE uses. Lets say you want one trade a week. Can you get that? 3% seems to be the minimum return on investment. If you trade AVERAGING, trying to get the once a week, sometimes twice a week trend ( in the hourly charts ). A profit is a profit, no matter what, as somebody said. As day trader rules limit me to three trades per week, one of those trades is reserved for a directional trade, if I can get my trend turn indicator to work properly. That leaves me with two spare trades. One of which could be the luck of getting a move for a quick profit with a one straddle spread trade. Otherwise averaging two spreads should work in a non directional straddle spread, whichever direction the trend finally occurs. The important thing is to make a profit every week. Am going to test the other WEEKLY options end of week trade and see how it works. Having traded that in credit spreads, I know it works in credit spreads, will it work in a straddle spread is the question? A boost to profits from volatility occuring, would be just icing on the cake. If it happens, it happens. That is the picture forming in my novices mind from this learning process so far. I´m still recording the GREEKS, but can´t find much predictive ability in them. The IV seems to be the most workable numbers. From reading some forums, some of the professional traders really get into the GREEKS and convoluted strategies, very complex and I suppose they have their part to play. I just haven´t seemed to grasp anyway to use the GREEKS yet, in a pragmatic sense while planning my more simple trades.
There is no right and there is no wrong. Price movement is all there is. I do not AVERAGE. I ATTACK! ...and retreat.
Well I had four trades on, all of them paper trading with a pen. Not totally accurate, but I was using real time account for the prices. Gives an idea anyway. The trade I put on yesterday for FOREX Forex recommendation, 1) Forex straddle, done early in the morning yesterday. Returned +$168 after paying commissions. Or NET profit. +24% ROI 2) A straight PUT directional trade done at turn of trend signal. + $268 after paying commissions, NET. + 38% ROI 3) An extra Forex Straddle at a different time during the day. I was fooling around a bit, + $204 NET. Or +29% 4) One of my own STRANGLE + $120 NET, +18% ROI Will do a Forex other straddle later today also, but this one is intended in real cash account. Will make it as small as I can. One contract preferably, for the test.
I forgot to mention, this morning was a Volatility ballooning. I caught the peak, about half an hour after the opening, or a bit more. Using the DMI indicator fast line to tell me where the volatility peak was.
Use the ROI, but with reference to your total account, not the particular cost of whatever put/call/spread/backspread/straddle you are entering. Then it all falls into place somehow...just a suggestion to keep you grounded. IB : Interactivebrokers. Arguably one of the most solid firms out there. EXCEL: A microsoft spreadsheet product. Which can receive realtime quotes, balances, etc, etc, from IB, make realtime graphs, etc, etc, for users with little or no programming skills. You can even have your PnL realtime and automatic highlight (in another color) of the most convenient put or call to sell or buy to make your reactive adjustments, calculate your risk realtime, reward at different prices, and even balance your checkbook. Very likely your superduper trend, DMI, whatever indicator can be included in a column of EXCEL as well.
Forex forex Lucky I started reading some messages back. Forgot this was supposed to be a trade in QQQ. Will wait another 40 minutes Anyway I switched from SPY to QQQ and I see the risk is $56 right now for a one contract STRADDLE. I suppose I should do five Straddles for a bet of around $280 to see what would happen?
Fortis Fortis Okay! I´´m in 2 contracts straddle spread at .89 cents REAL MONEY Also did a paper money similar of the Aug. SPY, 2 at a spread of $7.47 Compare them tomorrow morning. I´m closing down shop. Did everything I wanted to get done today.
everybody should have a basic working knowledge of excel, it is an amazing program, especially people going into finance. Very easy to port the indicator based data into and out of excel, this is pretty basic stuff. Now if only I could get excel to tell me tomorrow's close.