What strategies do you guys use?

Zr1Trader · Jul 5, 2011

Quote from klurby:

Hello guys, what is everyone's favorite strategy? please share.
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My favorite is trading a few subsets of hammers in conjunction with market context and more recently 1 hour channels.

atticus · Jul 5, 2011

Quote from Zr1Trader:

My favorite is trading a few subsets of hammers in conjunction with market context and more recently 1 hour channels.
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+1

HowardCohodas · Jul 5, 2011

Quote from atticus:

Figured that Madoff would feel the need to chime in. Don't you have some creative accounting to do?
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Just doing my duty to warn those who don't know about you to do their due diligence.

atticus · Jul 5, 2011

Quote from HowardCohodas:

Just doing my duty to warn those who don't know about you to do their due diligence.
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What, in mentioning your fraudulent accounting?

HowardCohodas · Jul 5, 2011

Quote from Betapeg:

What are you talking about? 6 month return of 1.725%?? Where did you come up with that number? I'm sure you can clearly see $5,000 worth of options expiring within 2 months. Mathematically, that is 5% in about 1-2 months.
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I hope you can now see what you are in for by responding to Atticus.

weewilly · Jul 5, 2011

Quote from Betapeg:

Here is a screenshot of a portfolio of far OTM futures options.

www.betapeg.com/P0sitions.jpg

Look at the strike prices of these options and then look at the "mark". My oil contracts are more than 30% OTM. My natural gas is more than 40%. Corn moved against me but is STILL 10% out of the money with 17 days left so the trade is still very much on. My soybeans short strangle has one leg 15% OTM, and the other more than 20% OTM. My wheat position is 50% OTM!!

You'll see all these options are far OTM but I still received on the order of about $1,000 per trade ending in less than 2 months (when I put these on). Margin requirement at the time these trades were put on was about 30-40% of total capital. The rest is nothing but cash. I will be receiving $5,000 of premium within 1-2 months which is a 5% return on a $100,000 portfolio. Annualize that and you'll get a reasonable estimate of at least 40% or 50% as an annual return.

None of this is "pennies", "scalping", or "grabbing nickels in front of a bulldozer." With the proper risk management rules, it's actually safer for the return than anything I have ever seen. How I can be making $5,000 of premium in less than 2 months using just 20-30% of my capital and that be called "pennies in front of a bulldozer", I have no idea.
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Way way way too much negative gamma. Yeah it works --- until it doesn't.

kinggyppo · Jul 5, 2011

Quote from jamesbp:

Betapeg

I don't mean to be rude, but it seems as though you are simply trying to 'copy' the guys at Liberty but don't have the same degree of knowledge or experience .... on top of which Atticus calls them a bunch of clowns .... and I ain't arguing with Atticus )

I can talk with some degree of experience in respect of Liberty, as I actually have had an account with them for the last 3 years ... in which time my investment is up 250% ..... but that isn't the whole story ... which comes back to your naive assumptions about risk management ...

Based on my experience with Liberty, if you sell FOTM naked options on highly speculative commodities then you can expect

- the options can double/treble in price overnight without any change in the underlying price
- commodity options that were initially 50% OTM when opened can quickly become ATM; particularily if trading limit up on consecutive days
- large draw downs in your equity balance; which if you do not have the stomach for a wild ride, you will probably puke at the wrong moment

Personally, I only invest with Liberty what I can afford to lose 100%, as I regard it as the highest risk element of my portfolio, and I regularily draw down cash to ensure I realise some of the profit along the way.

Best of luck with your new firm ...

Cheers
JP
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I don't see any posted track record with these guys is there one?

atticus · Jul 5, 2011

I'm in the midst of a DD here (-8% peak to trough) but did it ever occur to you people to attempt to learn how to trade? Do you consider it even remotely professional to risk many times your client capital on these absurd positions?

Betapeg · Jul 5, 2011

Quote from atticus:

So you won't cross the street for a risk-free $1,725? The smell of BS is strong with this Padawan.

Your YTD PNL is $1,725......
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That's because I started this particular trial run 2 or 3 weeks ago. That's $1,725 made in the last 2 or 3 weeks.

Betapeg · Jul 5, 2011

Quote from weewilly:

Way way way too much negative gamma. Yeah it works --- until it doesn't.
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How hard is it to simply close a short naked futures option position at double the premium received on the trade?