yep my wife and I.
we retired from tech ( startups) at 50. In order to keep out minds working AND make a buck we decided to both trade options. Luckily for us we have chums who own a trading environment that teaches people, like us, how to do this effectively and so we set off on our adventure. Very quickly into this I decided to code up a trading analysis dashboard which gave us guidance as to the REALITY of our approach. This coded in Python and Dash based on the math taught to us by a good chum who is a retired floor trader from the Cboe. Pretty successful one I might add. We read the financial times ONLY twice a week ( Fri and Sat) to find out what others are thinking but our REAL trading happens in the math. So I suppose it's an amalgam of tech and new adventure. The trading takes about 20 minutes a day and for the rest to the time we are out and about having fun in Chicago. I'm looking at a language called Julia to move to from Python but that is NOT going well and I am planning on chatting to the Carbon people next month. Hope this helps a little
What is your general approach? Selling premium? Earnings announcements?
Do you frequent any online communities of professionals, or is it just you, your spouse, and your mentors?
Beyond wanting to learn alternative approaches myself, I help moderate a local trading group. We are always looking for presenters in our monthly meetings.
Yes we sell premium. I suggest you listen to the www.tastylive.com people, they are pretty sharp and realistic.
We do NOT listen to anyone but the math and our mentors who help us add realism to the approach. Pure math is ok but, as Simons showed, you need a little guesswork in there. We use graphical representations of complex data sets ALA Tufte.
Please don't do this. Virtually all day traders lose money and the ones that don't are almost certainly running on luck. If you really had an edge in the market you would open a hedge fund and rake in billions. Everyone else is just playing the law of large numbers and the winners happened to flip 50 tails in a row.
I agree but trading OPTIONS is not day trading. It is based on probability and DURATION. Selling premium allows you to pick your duration,probability of profit and value at risk. This is NOT day trading which is financial sugar. This is the message that tastylive.com advocates. I am NOT compensated by them but they ARE people I trust and respect.
>I agree but trading OPTIONS is not day trading. It is based on probability and DURATION.
Idk if you bought a course from them or what or why you are convinced that trading Options, at home as a non professional trader is somehow NOT day trading.
>Selling premium allows you to pick your duration,probability of profit and value at risk. This is NOT day trading which is financial sugar.
So you have non zero probability of profit which you are almost certainly miscalculating and some value at risk. Aka you are not guaranteed to make money and if the market does something unexpected you will in fact lose it. You seem to THINK you are more sophisticated or safer than the average Robinhood options trader but you really aren't...
Lol ok this guy thinks he stumbled upon a free money machine where can make money on 90% of trades. Day Traders are among the most delusional people on the planet.
you REALLY don't understand this do you. The entire options market is based on this principal. I have NO idea where you get the idea we day trade. I will try again as it seems that serious investors are reading this thread.
Our approach is to pick a underlying which has an attractive premium for our risk tolerance. To do so we normally look for something whose price is > $50, has high liquidity and has a implied volatility which is attractive to us. We also consider the historical volatility trend for 20 10 5 days and compare it to the 30d implied vol to get a feel for it's cheapness. THEN we look at the 45 day option and SELL premium against that. We tend to look for a probability of profit of 70 -80% and that defines the premium.
In short it's NOT day trading, it's NOT a magic formula and it's NOT a scam. Should anyone wish to listen to ACTUAL serious traders working everyday to help retail investors then look at tastylive.com. Again, I am NOT being paid for this. I just am answering the OP's question regarding what we did post 5 startups to keep us busy. Our approach allows us to risk 25 % of our capital ( just in case it goes wrong we don't lose everything) we get about 10 - 30% return on 100% of our capex. we use the kelly criterion to define our thinking regarding when to get out when we get it wrong. We mostly use naked puts but in the current environment we consider back ratios or spreads. Does ANY of this sound like day trading or some magic formula. I don't really care about your opinion but I wanted to ensure that anyone reading this thread could have something to reality check against other than your "comments"
Hey, thanks for the detail here. Are you modeling in the increased IV due to upcoming earnings announcements? Do you hold anything in its run-up to earnings or through an earnings announcement?
Are you using OptionNet Explorer or OptionVue, or just your own software using the math you learned from your CBOE friend?
Interesting to hear about trying to use the Kelly criterion. I've always thought of it for bet sizing, which is tough since you never know your true odds (unlike counting cards, for instance).
For my own trading, I am having moderate success with selling premium on index options. I find it tough to make a meaningful amount of money while keeping blow-up risk low.
I was in Silicon valley for most of my time, lucky to have Tom Perkins as our Chairman and Ceo for our first startup as he taught us how to ignore the "shiny" tech. Our experience with Julia has led us to believe that it's a language with a great future behind it. We're going to work with the Carbon guys to highlight lessons learnt.
sorry, not sure why we would post a blog or write anything on this topic. It's just our practical experience based on trying to use julia. What I can say is that we were VERY impressed with DataFrames.jl and Pluto.jl the people on discourse were excellent. In fact the community was top notch but there were too many red flags for us. I think the Carbon people seem to be taking an interesting route and we will discuss our issues with Julia with them when we meet up. This could be a case where late moving advantage pays off. Sorry to have given you the impression we would write anything.
