Two Years of Trading Dangerously at 84% Annualized Returns

Discussion in 'Hook Up' started by InTheMaking, Jan 14, 2018.

  1. ironchef

    ironchef

    I didn't say it has been profitable since 2014, just said I used the same strategy since 2014.
     
    #61     Jan 29, 2018
  2. ironchef

    ironchef

    My head is spinning reading it. Obviously beyond my pay grade.

    I should study up on more complex options strategies instead of just doing directional bets.

    Take care.
     
    #62     Jan 29, 2018
  3. NDX/SPX insurance is helping! I believe NDX will consolidate below 7000 till a month prior to next earnings. Hopefully by that time, I'll have completely liquidated. This market feels so overbought and with VIX rising the resistance is building up.

    @ironchef
    here's an example of NDX insurance trade
    A PUT Bearish Butterfly Spread. Pick a strike 100 points below the current price of NDX. Sell 2 PUTS and buy a long PUT 150 points above and below the short strikes.

    I had bought the following construct when NDX was at 7020

    -2P NDX@6950
    +1P NDX@6800
    +1P NDX@7100

    This is an insurance hedge for a bull market and ought be profitable if NDX drops from current price to 6900 or increases to 7100. Its expensive at $30 a slice, and if NDX pins at 6950, strike price of the short PUT, the slice will be worth $150 (or 5x profit). Close it at 100% to 150% loss.

    Your other insurance hedge against a loss is to completely liquidate, :/
     
    #63     Jan 31, 2018
  4. sss12

    sss12

    I like your real estate/land lord comparison but, getting the best possible tennent with low default risk and willing to pay high rent on a long lease cycle is just as hard in reality as it is to find those characteristics (Greeks) in an option trade. Also maintenace on real estate is just like fees...it is a constant, not occasional cost that has to be factored in.
     
    #64     Jan 31, 2018
  5. Thanks for the feedback!

    Real-Estate management was a learning exercise just like Options. I hated the volatility associated with short options, so I studied about Vega and how to account for delta/vega risk factors. One of the ways, I was able to better smoothen out my equity curve. However, last two days I suffered a 2% DD, :(

    BTW, the above example is not Real-Estate. Its equipment leasing.
    But, your're right! In RE, tenant selection is key. Beyond doing a credit check, there are other factors to maintaining a long-term tenant; Divorcee? / Single-Mom with BF? / Obesity (yes, I said it) / Job Type (Will Amazon take it away?). And as you know best credit is not good either. They will end up buying a house and you need to search for a new tenant every year. I don't do regular tenants any more in real-estate. I hated having to show homes every year. I sign 7-year leases with some non-profits for my residentials. For apartment rentals, I focus on section-8 gov't programs. Both are less management headaches.

    Yup! Maintenance is pain! Still reeling from the pain of spending 3 grand on an apartment plumbing. I've got a few handymen who take care of my properties and hopefully will not rip me off. HVAC guys, I hate. They always overcharge me. The real solution is to start an HVAC servicing company to lower the costs. I take my handymen out drinking to make sure they don't screw me over. Now, only if I could take my TSLA straddles out drinking, ;)
     
    #65     Jan 31, 2018
    tommcginnis likes this.
  6. sfwind

    sfwind

    You may also write a bearish call spread further out of the money to finance the put side since it won't require additional margin.
     
    #66     Feb 3, 2018
  7. I used to do bear call spreads when I first traded options and used to work pre-Trump, post-first-rate increase. Unless we get a true confirmation of a bear or neutral market, these things are dangerous in up markets. My personal observation of a slingshot move, can be painful. However, it's definitely something to be explored given yesterday's correction. I do have some call ratio backspreads on SPX, where i might make into bear call spreads if have another down day.

    Regarding margin, during high VIX, my margin gets (negatively) impacted even with call spreads. IB hasn't been too forthcoming on how their PM calculations work. Makes it difficult to optimize position sizing.
     
    #67     Feb 3, 2018