I have enjoyed this thread, and must say that I had the same response to you (in my head) to @TheBigShort. However, if QQQ is your core position, how can you possibly make that claim?
If you are referring to @TheBigShort commente as being snarky, I have same concern. How small can you keep it and yet make it meaningful?
He should really be using his theta budget as a quick and dirty risk metric rather than gamma (gamma decreases with the asset price). His strategy is very sensitive to jumps, and it will be interesting to see how he deals with a couple "unexpected jumps". Ps. I did not mean to offend anybody. I am rooting for you to do well
Core position just means it's my go-to "dial" for tweaking my portfolio delta's, assuming all of my other positions are good and I still need to make some portfolio-level beta-weighted delta tweaks. It doesn't really mean different when talking about the ability to roll options defensively. I am not sure if I understand your question correctly, but if you are talking about rolling an option, it's not as fantastical as others here are making it sound. Let me use this example to show what I mean. One of my position that are getting tested may be 50%(in notional value) of my overall portfolio. That means it's actually less risk than owning straight stock that would be 50% or more of my portfolio value. On top of that my options start at between 16 and 30 delta, and if they are tested between the strike and break even point I would then roll up/down and/or out to reduce both gamma and delta. So in this example the short position that is 50% of my account size will never have more than around 50 deltas (due to defensive rolling), which means it will have a maximum impact of about 25% of my portfolio (underlying is 50% of the account * maximum of 50 delta's). That isn't even looking at things like theta decay or vol contraction, or the fact that the position will not always be at 50 delta's, 50 is the point in which a defensive roll occurs. All factors in the actual risk of the position Options are no silver bullet. They are just different products with their own pro's and con's. But the idea, as suggested by some members here, that rolling options requires "unlimited capital" or is a "martingale strategy" doesn't really make any sense. Either they are trolling or they don't understand what I am describing. In either case I don't want to start with snarky, sarcastic comments and side-trails on day 2 of my thread for crying out loud.
A Video Introduction Here is a formal video introduction of who I am, how I got here, and the trading strategies that a use.
When you say that you are trying to beat benchmarks, it sounds like you are talking absolute rather than risk adjusted returns. Did I misunderstand?
I'm interested in both, but I am also not going to stop trading if I don't achieve it or spend a whole lot of time thinking about it. It a general principle where if a person can't generate decent returns then they are better off parking the money somewhere where it can. Whether or not a person can, and if so by what degree takes a number of years of trading to really figure out.