Watch HowardCohodas Trade Index Options Credit Spreads

This is a discussion on Watch HowardCohodas Trade Index Options Credit Spreads within the Trading Journals forums, part of the Reception category; When you say 14.7% - is that 14.7% of your reduced account size or 14.7% of risk for the trade ...

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Old Nov 28, 2010, 4:26pm   #31
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

When you say 14.7% - is that 14.7% of your reduced account size or 14.7% of risk for the trade ?

On a per-option contract basis, what was your dollar risk, dollar return & dollar fees for this trade ?

We don't need to know how many contracts, just nice to have an idea of the risk & reward without getting the calculators out...
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Old Nov 28, 2010, 5:50pm   #32
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

I would carry on with your own calculations tbh. TOS might of made some epic **** up in their % of touch.
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Old Nov 28, 2010, 6:01pm   #33
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

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Quote:
Originally Posted by DionysusToast View Post
When you say 14.7% - is that 14.7% of your reduced account size or 14.7% of risk for the trade ?

On a per-option contract basis, what was your dollar risk, dollar return & dollar fees for this trade ?

We don't need to know how many contracts, just nice to have an idea of the risk & reward without getting the calculators out...
Thank you for helping me spot a bug in my profit calculations and for forcing me to be more precise when illustrating the profit of an iron condor.

My bug was in using the closing Mark prices at expiration rather than 0. That's fine for monitoring a trade in progress, but is obviously wrong for calculating results at expiration.

NDX Weeklies -- Difference in Strike = 25

Spread 31
Credit 1.6
Profit = 1.6/(25 - 1.6) = 6.8%

Spread 32
Credit = 1.2
Profit = 1.2/(25 - 1.2) = 5.0%

Profit as Iron Condor
Total Credit = 1.6 + 1.2 = 2.8
IC Profit = 2.8/(25 - 2.8) = 12.6%

It better to do the IC profit calculation as above than simply adding the profits from the spreads and I shall do so in the future. I was just being lazy and showing a lower value than was justified. Not a very good excuse for a math guy.
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Old Nov 28, 2010, 6:09pm   #34
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

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Originally Posted by Hotch View Post
TOS might of made some epic **** up in their % of touch.
Perhaps they did, however I disclosed my method of calculating it and their's was close enough to mine for me to abandon mine.

See FAQ link in signature.
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Old Nov 29, 2010, 2:09am   #35
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

Thanks for clarifying Howard. So - as I understand it, spread 31 works out as follows:

Per contract risk = $2,500 (difference in strike prices & * 100)
Per contract credit = $160 (net credit * 100).

I presume fees are almost irrelevant right - probably $1 per leg.

Is this correct?
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Old Nov 29, 2010, 4:53am   #36
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

HowardCohodas started this thread
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Originally Posted by DionysusToast View Post
Is this correct?
Yep.
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Old Nov 29, 2010, 5:15am   #37
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

Quote:
Originally Posted by HowardCohodas View Post
Yep.
Thanks for replying Howard.
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Old Nov 29, 2010, 5:40pm   #38
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

DT is being very polite here. There are two possibilites - either it's because Howard is engaging him civily (which is perfectly possible) - or there is lulz afoot...
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Old Nov 29, 2010, 7:48pm   #39
 
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

Quote:
Originally Posted by HowardCohodas View Post
Perhaps they did, however I disclosed my method of calculating it and their's was close enough to mine for me to abandon mine.
Ah, fair does then.
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Old Nov 30, 2010, 4:52pm   #40
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Re: Watch HowardCohodas Trade Index Options Credit Spreads

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Originally Posted by arabianights View Post
DT is being very polite here. There are two possibilites - either it's because Howard is engaging him civily (which is perfectly possible) - or there is lulz afoot...
He lulz him into a false sense of security.

Actually my lulzometer needle is barely flickering.
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