Thanks maxpi, good luck to you too. Today's performance was not as great as I would have hoped. Altria leaps lost value today as a result of the Fed announcement, effectively giving me 4% paper loss today. This was counteracted partly by Vix calls I bought yesterday (just 1, dipping my toe into uncharted territory, although I really doubt I will be going near the Vix again anytime soon), with my VIX calls appreciating 50% (.5% gain on portfolio, booked). Also traded calls on financial stock, which appreciated 11%, leading to a booked 2.7% increase in portfolio. All in, (4)+.5+2.7 = down .8% today. Can't hate on Altria though, it's been doing well for me thus far.
My apologies to the thread-starter, but I felt it necessary to answer this psychotic. I'd like to oblige, but it would require you to complete approx. one eon in evolutionary-terms. Opposable thumbs will help. Had a bad-day, sweetie? Awww shucks, deleted your last? Now this crank is sending me PMs. Did I bang your sister? If so, my apologies... as you must know I have the utmost respect for her!
Wow, that attack came out of nowhere I'm actually curious now haha, what is your strategy (and if you don't mind sharing, performance)? (Not that I'm agreeing with the other poster's post) Basically, I arrived on my strategy before I opened my brokerage account (actually, my "discovery" was the only reason I actually did open the account). The basic premise behind this "pseudo-arbitrage" strategy is looking at "mispricings" according to comparisons against other securities and entering and exiting trades at points statistically likely to yield a large enough margin of profit. "Statistically likely" is from my analysis of years of daily data combined with, recently, months of tick by tick data. It has been working pretty well, and only recently have I been getting more comfortable (cocky? haha) with risking a larger portion of my capital on each trade. One of my biggest problems has been managing bid/ask spreads as wide as 50 cents. While I still have been profitable, (which I guess attests to an "edge") this has led me to consider other strategies or even other securities from the "favorite" ones Ive been trading. Once I am able to day trade stocks, I hope to get past the obstacle of wide spreads by trading the stocks themselves, but unfortunately this will eliminate the leverage which I feel I need. Since there is more liquidity and considerably smaller spreads on the stocks themselves, I am also working to make a system that will take care of entering/exiting the actual stocks automatically. Because I will be able to take advantage of the many, smaller mispricings that occur throughout the day (that i cant take advantage of because of the 50 cent + spreads) I actually may be able to be even more profitable. With regard to technical analysis, how successful do you guys feel things like stochastic, channels, bollinger bands, etc. are? It seems that since everyone uses them there's isn't much advantage? Or is it more like since everyone follows it, it works? Or, similar to Elliot Wave Theory, it's just the natural order of things for it to happen and thus people can take advantage of it?
Thanks for the detailed explanation. I trade vol bets and replication in vanilla and exotic markets; primarily barrier and lookback options. I'd like to see your trades going forward. Good luck.
Very interesting, I was taking a look into barrier/lookback options and was a bit confused as to how they work, definitely piqued my interest though. How do you trade vol bets? What is your opinion on the VIX? It seems like I was late to the game in buying the calls, as there was already implicit in the price speculation that volatility would increase (which is not at all surprising directly preceding the Fed announcement).
Cut em some slack Atty, he's just bitter because the BullnBear Method didn't quite pan out for him this afternoon.
You need a trading plan with good risk management strategies to consiatanty win with otpion trades. Once I became a net seller of options my winnng % improved significantly. I believe that the majority of options expire worthless every month so I only want to be a seller. I just completed my best month of the year in Nov and Dec is going to be even better. I trade Iron Condors credit spread trades on the SPX,SPY,NDX,QQQQ,RUT and IWM indexes every month. Be a net seller and you will win the majority of time.
Hey FitForLife, What does it matter to me if the majority of options expire worthless, if I'm only holding ATM options for, maximum, 6 hours? I will look into trading spreads as it has come up a lot and at the very least it will be good to become more knowledgeable about it. Thanks a lot for the suggestion! - On a side note, today was a busy day and I did not really have the concentration/time to trade. Not counting movement on my LEAPs (which I am holding for a bit longer) I was pretty much flat today (+65.00)