Watch HowardCohodas Trade Index Options Credit Spreads

[DionysusToast]

Interesting. 15% chance of touching but only a 3% credit & an immediate paper loss.

I'd want to be pretty confident about future market direction or lack thereof to take that on. Or of course I'd want to be confident pot was wrong.

R:R is over 30:1 again, hard to see how you can get margin for a 10% monthly gain.

 

[HowardCohodas]

Interesting. 15% chance of touching but only a 3% credit & an immediate paper loss.

I'd want to be pretty confident about future market direction or lack thereof to take that on. Or of course I'd want to be confident pot was wrong.

R:R is over 30:1 again, hard to see how you can get margin for a 10% monthly gain.

Immediate paper loss:
That's not infrequent. The loss shown in the options chain is based on the Mark price. I may end up entering the spread at less than the Mark price if it still meets my profit and probability goals.

Why would I do that?
With the low probability of touching, the belief is that theta will overpower other effects and drive the spread to zero to provide it's maximum profit.

How can 3% return on an as yet unpaired spread to form an Iron Condor turn into a 10% monthly gain?
4 1/3 weeks per month should do it nicely, don't you think?

Confident in market direction.
Why? Theta overpowers delta, even with only one spread. Once an Iron Condor is formed, no worries about delta.

Confident that PoT was wrong.
This is beyond my ability to understand. Only a 14% chance that there will be any loss at all. Why do you think that must be wrong.?

Did I leave anything unanswered.

 

[DionysusToast]

H the 3% is not 3% of account unless you go all in. In which case you will blow this account.

 

[HowardCohodas]

H the 3% is not 3% of account unless you go all in. In which case you will blow this account.

I thought it was agreed that we would keep our frame of reference consistent and it is that of the spread and Iron Condor and not the account aside from the exception I clearly outlined.

Therefore, I took for granted that your reference was to the spread and the possible Iron Condor as a frame of reference.

It is important to stick to the agreed frame of reference or clearly identify when you are discussing a different frame of reference if you find it necessary. I discourage it unless absolutely necessary.

Changing frames of reference without signaling certainly confuses me and just might confuse others reading this thread.

 

[DionysusToast]

Howard i can keep up.

I just don't see how you are Making 10% per month with these things. Those are your stated results but you are refusing any serious discussions on how they are achieved.

Weeklies are in pre production, they can't be doing it. You claim not to be all in on the months but given the information, which is sufficient, the conclusion must be you are risking the whole account.

 

[HowardCohodas]

Howard i can keep up.

I just don't see how you are Making 10% per month with these things. Those are your stated results but you are refusing any serious discussions on how they are achieved.

Weeklies are in pre production, they can't be doing it. You claim not to be all in on the months but given the information, which is sufficient, the conclusion must be you are risking the whole account.

I'll take you at your word. You don't see very well.

We will now let you tag out and let others discuss the frame of reference that we agreed on, i.e. the spread and Iron Condor and not the account.

 

[DionysusToast]

Such a simple question to answer Howard. How can you make 10% a month this way ?
Your inability to answer leads to one conclusion. Your profits thus far are theoretical only. This also explains the dashboard, tos screens would show these aren't actual positions.

The theory is not holding water.

This whole thing is a sham. What trader exists that cannot correlate between average trade risk & returns and actual profits made? What trader when asked to explain their edge responds by asking what an edge is?

What an excellent wind up this has been !

 

[scose-no-doubt]

I plan the areas where I will look for trades in the previous evening or the morning of the current trading day

How do you do pick levels? Based purely on PoT & credit or on levels in the underlying?

So you'll only form the condor when you find calls that meet your trade criteria i.e. 15ish % PoT and +3% credit?

 

[HowardCohodas]

Such a simple question to answer Howard. How can you make 10% a month this way ?
Your inability to answer leads to one conclusion. Your profits thus far are theoretical only. This also explains the dashboard, tos screens would show these aren't actual positions.

The theory is not holding water.

This whole thing is a sham. What trader exists that cannot correlate between average trade risk & returns and actual profits made? What trader when asked to explain their edge responds by asking what an edge is?

What an excellent wind up this has been !

You have a child-like manner of demanding what you want and the way you want it, that you have exhibited throughout this thread. Not very cute in an adult conversation.

Unfortunately you have now entered the domain of Fx Bandit. To bad.

 

[HowardCohodas]

How do you do pick levels? Based purely on PoT & credit or on levels in the underlying?

So you'll only form the condor when you find calls that meet your trade criteria i.e. 15ish % PoT and +3% credit?

Correct. Although when the markets are flat or trending downward, the calls spreads might be the first entered.

With respect to strike price choice. I do not refer to the chart of the underlying instrument for several reasons. I did not include any additional TA when I did my back-testing. I started out doing some TA, but found it had no added value.

When I started paper trading, I looked at the charts and added support and resistance lines. Again, I found that it added confusion rather than insight.

I don't know if its just a lifetime of habit from a career in engineering and engineering management or a personal style, but I always drive to make things simpler until it compromises the result. Sort of a Zen approach.

I cannot claim originality on the emphasis on simplicity. IIRC that concept made an impression on me when I read a biography of Einstein as a teenager.

 

[scose-no-doubt]

MR, I see that you're lurking
Question... is Howard not inadvertently providing adequate management of delta (and it's derivatives) exposure through his PoT risk threshold?

 

[Martinghoul]

Howard, sorry, can we be extremely specific and just look at two specific trades, rather than the dashboard. Let's ignore the liquidity considerations, i.e. open interest etc, for the moment and just concentrate on the analytical criteria that you used to choose one and reject the other.

 

[HowardCohodas]

Howard, sorry, can we be extremely specific and just look at two specific trades, rather than the dashboard. Let's ignore the liquidity considerations, i.e. open interest etc, for the moment and just concentrate on the analytical criteria that you used to choose one and reject the other.

With some of the junk in between, perhaps you missed my attempt to do as you asked. Post #580

Otherwise, I'm .

 

[Martinghoul]

With some of the junk in between, perhaps you missed my attempt to do as you asked. Post #580

Otherwise, I'm .

No, I saw that post, but, as I said, can we pls be more specific, for the sake of clarity. Can you tell me exactly what the two trades were, to start with?

 

[scose-no-doubt]

The criteria are "x" days to expiry depending on whether weekly/monthly, 15% PoT and net credit >3% (aim for 5%) for opening single/initial spread right, Howard?
That was the first and successful trade on the put side @ 2200/2175

Condor is 15% PoT and net credit >3% on the opposite side at some point during the first spreads life?
The highlighted calls on the dashboard show that although one strike had 15% PoT, the net credit for opening the spread made it ineligible at <3% @ 2325/2300

So Howard provided one successful and one unsuccessful as you asked.

Does the distance between the two spreads not impact on risk?

 

[Martinghoul]

Right...

So 2200-2175 put spread was traded? Whereas the 2300-2325 call spread was rejected?

I am sure this is all in the snapshot of the dashboard you have shown, but I am just trying to specify the question as tightly as possible.

We just need to get all the other dets out of the screenshot, i.e. spot or fwd at the time, prices for the legs, expiry etc.

 

[HowardCohodas]

The criteria are "x" days to expiry depending on whether weekly/monthly, 15% PoT and net credit >3% (aim for 5%) for opening single/initial spread right, Howard?

The example I chose was contemporary so it turned out to be a weekly.

When trading monthlies, I enter about 60 days before expiration because that's when the funds come out of quarantine from the series just expiring. When trading monthlies I usually find more generous credits. Furthermore, there is time to roll, so the series my provide, 3, 4 or sometimes 5 spreads for that 60 day period when you include all spreads in the Iron Condor. The least profit comes from a flat market, the supposed strength of an Iron Condor.

Does the distance between the two spreads not impact on risk?

I don't know because I haven't figured out how to analyze it. My assumption is that PoT keeps me out of trouble.

 

[scose-no-doubt]

Why would rolling your positions result in more spreads? Shouldn't you be closing out?

Howard, feel free to ignore my questions and answer martinghoul's. They are always more important

 

[HowardCohodas]

Right...

So 2200-2175 put spread was traded? Whereas the 2300-2325 call spread was rejected?

I am sure this is all in the snapshot of the dashboard you have shown, but I am just trying to specify the question as tightly as possible.

We just need to get all the other dets out of the screenshot, i.e. spot or fwd at the time, prices for the legs, expiry etc.

Spot or fwd at the time?
Sorry, I don't know what you mean.

Prices of legs?
I never look at that. I trade the spread as a unit. I do not leg in. I don't care how my broker searches the various markets to match my credit requirement. I've seen some multi-contract fills come from different markets at different prices for the legs, but meet or exceed my requirements. I view that as a good thing. Do you?

Expiration?
The example I showed and will track until expiration in this thread will expire on Friday and is a weekly.

 

[DionysusToast]

You have a child-like manner of demanding what you want and the way you want it, that you have exhibited throughout this thread. Not very cute in an adult conversation.

Unfortunately you have now entered the domain of Fx Bandit. To bad.

It's not about what I want hc. It is about flaws in your claims which when pointed out, draw cute replies.

All the same, your claims of overall profitability don't tie up with the way your individual trades stack up and if they do, then some of your other claims don't.

The overall picture presented thus far does not fit.