anyone have any weird strategies besides the crappy ones that don't work that well but everyone talks about (like iron condors, which suck but everyone trades them). here are two strategies that takes advantage of leveraged ETF decay and are safe: buy 5x ATM UPRO puts and sell one ATM ES put, both which expire in over 150 days buy 1x ATM ES put , sell enough ATM SPXS or SPXU calls to make it delta neutral (riskier than the first but pays better)
All option strategies are a gamble, crapshoot if you have poor ability to predict movement of the underlying You should really study your underlying...and just KISS: keep it simple stupid. -- don't do any of those weird/complex strategies. then Go long, or short, or both,
Options "strategies" (eg iron condor) are not out-of-the-box trading strategies. Employing any options strategy repeatedly "for no reason" will be a loser over the long term, provided the options are priced efficiently by market makers (which is virtually all the time). If I just constantly trade options strategy x on some underlying for no particular reason but just because I like strategy x then my long term expected return is negative and I will wipe out my account (unless I just happen to be very lucky). Options strategies are a way of expressing a pre-existing belief about the underlying, whether that's the future direction of its price or of its volatility, etc. It is with the pre-existing belief that you need to have an edge and then you can choose the best options strategy (or other implementation) with which to express it. There's a caveat here. If you constantly write ATM put options on SPX, for example, that is a profitable strategy over the long term just by itself. However, it is a profitable strategy because buying and holding the S&P 500 is profitable over the long term, not because there's anything intrinsically profitable about writing puts on any random equity. That said, if you decide to express the belief that over the long term the stock market will generally rise by writing ATM puts, you need to make sure you use appropriate money management because there will be some awful drawdowns and I suspect many people would be over-leveraged and wipe out their account. Personally, I would cover the entire risk with cash; ie if I had $x I wanted to put into this trade, I would choose the number of options such that if SPX went to zero I would lose $x and no more. ...I wouldn't actually do exactly that, but I'm getting off topic now...
generally speaking, with the exception of 1995, the market doesn't rise in strait line . it does A LOT of churning with sporadic breakouts or breakdowns here and there. that suggest neutral strategies can be better than directional ones. But then you also have the IV explosion risk that is very common with condors and many other 'risk-neutral' strategies, so have to account for that too.
I like the long earnings volatility double calendar, It does not work on just any stock, but you have to find the ones it works on by research and backtesting and its been working very well for me.
I'm not sure if that was directed at me, but of course what you're saying is compatible with what I'm saying. Non-directional (price) strategies would typically fall under the category of strategies for which you have an opinion as to the future direction of volatility (relative to implied volatility). Anyway, I'm not trying to discredit the strategies you've shared (I have no opinion on them); I'm just offering why standard options "strategies" are "crappy," as you say. Happy trading!
There's no such thing as "ETF decay", the price of inverse and 2x/3x ETFs is the daily percentage change which can lead to very unpredictable results based on path dependency if you buy and hold. Only if you rebalance every day will you see the true inverse/2x/3x and if you do that you'll see there is virtually no tracking error. Backtest backtest backtest!
I did. the first strategy made $1500 between late 2015 and early 2016 due to the market volatility. and decay exists when volatility is hihg
It's not decay! It is highly path dependent and is purely the mathematical result of one leg tracking the daily percentage change the the other tracking the actual index. Decay would mean that both instruments tracked the same thing and one consistently displayed lower returns. If you do a backtest where you rebalance daily with that strategy (which puts them both tracking the same thing), you'll see that it in fact doesn't "decay" at all. It is a bet on volatility, there are much better ways to bet on volatility though.