/biz/ - Business & Finance

>>16454405
Who do you use?
How much is each spread (roughly) and how much do you make per trade?
How long are your trades usually open?
What was your worst loss and best win?
Are they better in quiet or volatile markets?
If I think of more I'll axe you.

>>16454405
Whats the best resource to learn this shit.

>>16454435
1. I personally use the Think or Swim platform hosted by TD ameritrade

2. It really depends on the size of your account (cash) that you are willing to risk, but an appropriate size for each spread would be 1-3% of your account, however it is relative. If you are using an account under 5,000$USD I'd recommend trading spreads with 2-3% of your total account, while an account with let's say 30,000$USD could just trade 1-2% per spread since it's a large account.

3. The return is relative to the credit you receive, and the probability of the trade being in your favor, (the higher the probability of the spread you sold expiring worthless vs the lower net credit you will receive) If I had to give an average, it'd be around 15-30% return per spread.

4.I trade weekly and monthly contracts so that explains the time frame, however once I have a decent profit from the spread due to time decay/ IV adjustments, I'll take my return then and there to capitalize on the trade being successful in the first place

5. My worst trades are outright losers (the whole investment gone), but I'd never trade an amount I'm not willing to lose, since I am a probability trader. So really my best "wins" are concurrent win (averaging)

6. Trading credit spreads can work really in any market, however liquid securities with volatility tend to be your best bet for receiving large premiums. (this is really relative to what IV is in the security)

7. Please do

>>16454452
The internet my friend, and youtube.

Channels like, Project option, and Option alpha will give you all the information a beginner needs to start with.

Also, https://www.theoptionsguide.com/default.aspx (for definitions and elaboration for a variety of spreads and rules of options trading.)

How much should a beginner start while they are learning the fundamentals? I wanted to do forex trading but realized stock and even e minis are more volatile I am trying to trade not invest. What are your main variables of the market movement that you look out for the most?

>>16454405

what makes options expensive or cheap?

I looked up dozens of different stocks and for the same amount of money, as well as the same % move, some were very cheap while others were very expensive

>>16454607
If you're still learning, consider paper trading option spreads, as I said previously in another post, 1-3% of your account size is plenty per spread.

I look for companies with high open interest, Liquidity, and high IV, and tight bid/ask spreads. Not sure if that answers your question exactly but if it doesn't, feel free to rephrase it.

>>16454620
The price of option premiums is relative to the actual strike price the contract has relative to the current price of the security. However IV (implied volatility) has a stronger averaging factor when it comes to the actual premium (IV affects the premium more than the actual strike price of the contract.

EX: XYZ : 50.00$ per share with a 45 Call priced at 2.50 with IV : 30%

VS

EX: XYZ: 50.00$ per share with a 45 Call priced at 4.50 with IV: 50%

The only difference between these two examples is the IV, which changes the price of the premium for said contract.

>>16454641
To am extent however I meant stuff like quarterly reports annual reports the feds interest rates did I miss anything no one pays attention to?

>>16454667
In all honestly, besides earning reports in companies which can affect volume/direction, I never pay attention to those things, and they've never affected me negatively. Don't let that be a pass by me, always observe and take into account what you are aware of (if you understand how it affects the market)

Woah! A thread that is useful and gives professional priceless information on how to trade?

See ya in page 10.

What stocks do you like?

I'm playing around with 3k wheel trading, stock covered calls and cash covered puts, selling. Thoughts?

Do you think HEX is a good cryptocurrency for the ecosystem? Do you have a ref link I can click and claim my BTC with?

>>16454698
1. What age did you start?
2. What age are you now?
3. Have you automated your trading at all yet? If not, why not?
4. What is your educational background?
5. Where did you learn to trade options and what got you into it?
6. How do you determine your %chance of success from the variables mentioned in >>16454658
and
>>16454641
I can only imagine you can derive accurate values for these from a model that's been back tested automatically (over large data sets), but I don't know
7. When everyone says things like "the markets are all controlled by hedge funds and you will never make a dollar off of them", what is your response, and how do you explain/rationalize your success in this context?

>>16454405
What's the best website/book/path to follow to actually learn this stuff instead of having spotty knowledge about a few things?
I sell options pretty succsessfully (lol you're the house in Vegas how could you lose) but I'm tired of feeling like I don't really know what I'm doing when pressed.

Great thread... I’m trading calls/puts in a $5k account. Would like to learn how to do spreads eventually.

>>16454965
>"What stocks do you like?"

Liquid securities, high IV, and tight bid/ask spreads. If you mean to differentiate securities by sector that's not really my skill set nor do I have a lot of input on that.

Collecting premium is always a better strategy than a form of debit spread statistically so you're doing the right thing. However if you aren't sure of what you're doing, try paper trading a strategy confidently
and see what your results are. It's hard to really give you a sure fire answer on what I think of what you're doing since I don't understand the methodology or algorithm to trading.

>>16454984

I don't know a lot about cryptocurrency (or HEX) in terms of growth if you mean as an investment, however that's really up to the fundamentals of your "coin" and if they have real world value.

1. I started educating myself around the age of 18 about technical analysis and trading stocks.

2. I'm 28.

3. By automated do you mean performed by a bot? If so, I'm not really familiar with how to even go about that since I don't believe I have a true algorithm that a robot could go about performing the same manner I would and with the same success rate.

>>16455280
>and see what your results are. It's hard to really give you a sure fire answer on what I think of what you're doing since I don't understand the methodology or algorithm to trading.

Current strategy is to stick to stocks I don't mind holding longer term, like ford and wab, etc.
Sell some cash covered puts until I get assigned, then sell covered calls till they get assigned away. Enjoy the small premium.

It's just some fun money, but I'm looking into paper trading on TastyTrade again. I had a decent strategy previously that worked mostly via set it and forget it trading. Bake in the 5-10% profit and use after hours trading mostly.

>>16454405
I'm an actuary, so I have a pretty good theoretical foundation for these things from my actuarial exams. Where would I actually go to practically trade option spreads as a retail, individual investor?
To what extent will understanding all those theoretical Black-Scholes models and adjustments to them, forward trees, Markov chains, hedging with the Greeks, etc. that I learned actually help me in a practical setting?
I've got a good grasp on statistics and financial modeling, including probability at a graduate level, but I wouldn't know exactly where to start applying it to my own investments because it usually all requires theoretical assumptions like lognormal stock price distributions or something. Where would I start?

>>16455326
By 3 yes I mean a bot, and I'm sure a lot more can be done algorithmically than you know, but understood.

I ask because I'm a software developer and very mathematically inclined so trying to determine how to employ my skills here.

How about the rest of my questions?

>>16455326
How do you like Technical Analysis, I generally look at all but the most basic TA as mostly healing crystals and scented oils for men.

>>16455341
Since we're all anons here, I'm looking to learn more about into software development and was thinking to slap together babies first neural network to view sentiments of an online community to chase becky stocks. But, aside from /pol/ there isn't a great data source.

>>16455370
I did a bit with neural networks in college (not my first pick for sentiment analysis) but there are plenty of online sources of information. You can scrape any forum for info of your choice. Hell you could scrape the biz /SMG/ threads

>>16454986
1. I started educating myself around the age of 18 about technical analysis and trading stocks.

2. I'm 28.

3. By automated do you mean performed by a bot? If so, I'm not really familiar with how to even go about that since I don't believe I have a true algorithm that a robot could go about performing the same manner I would and with the same success rate.

4. I have a high school degree, as well as a plumbing license for a future venture.

5. I learned to trade with all the information available online for free, really that's all. Any question you have or might conceive of is answered online somewhere I really learned most of what I know now from probability trading and a few friends who had similar interests.

6. You're very accurate actually regarding the large data set. I base most of my trades off of Greeks like Delta and built in functions in trading platforms like POP (probability of profit) to figure how to properly price my spreads. I actually use very little technical analysis when it comes to pricing / choosing spreads.
I hope that answers what you meant.

7. There are successful options traders no? What more proof do you need than that? It's really because a majority of people trading don't come up with an accurate algorithm or methodology to trading and use emotion and some form of rationalization to decide where they should put there trades.

>>16455333
Go with the tastyworks platform and attempt your strategy. Definitely check out probability trading though.

Regarding what you said though, you have to assign portfolios to which you manage differently and interact with differently. This way you can have a more accurate reading on what's performing which way and why.

>>16455386
I'm approaching trading for the masses as an information issue. Finding a decent source is the real challenge, as /pol/ might work because of how unfiltered it is, /SMG/ is retarded to use because everyone shills stocks here, the real fun would be seeing what the larger traders and market makers use themselves.

>I did a bit with neural networks in college (not my first pick for sentiment analysis) but there are plenty of online sources of information. You can scrape any forum for info of your choice. Hell you could scrape the biz /SMG/ threads

>>16455422
>Go with the tastyworks platform and attempt your strategy. Definitely check out probability trading though.

I'll have to go dig up my notes sometime. Gotta rescue it from a crashed hard drive. Let me see if I can recover the account and get in.

It was KISS candlesticks and worked alright, but oil pips are too addicting.

Good advice on the different portfolios to test, I never thought of that.

>>16455339
Honestly that question I wish I could just talk to you face to face about because that's a discussion not a question haha. You seem like a smart lad, In my personal opinion you never need to understand the Black-Scholes models to trade, it's really tied up in understanding the Greeks, Volatility, Pricing, and Technicals. Or at least if you wanna trade the way I do, which is with probability. If you understand the Greeks properly, you already have a head start. I'd almost say you're overthinking it, but again, that's a hard one to answer, sorry about that.

>>16455370
Technical analysis can be used if it's understood.

Really you have to create a trading algorithm with isn't fun in my opinion or reasonable work for what you might end up with (an algorithm that doesn't work 80% of the time) which also doesn't adjust to different markets. However it can be done and I've been close to it, but no cigar

>>16455433
All good points. You could look into StockTwits API for info. I hear they have some valuable sentiment readings already generated by posts on their site, but who knows how reliable it is.

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Hey guys, Just so you guys know, I will be posting these threads a couple times a week (I'll try to) so there can be a somewhat consistent options thread with real information being exchanged. I'll try to answer as many questions as I can, I do need my smoke breaks though after all. Thanks again for your interest.
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>>16455453
Anybody who is wealthy, manages said wealth. Definitely organize your trade or investments (long term / short term) So you can always have your big picture.

>>16455280
What would you consider a high number for IV?

>>16454405
>for a living
whats your portfolio size, avg theta/month
how many underlyings

>>16455555

Quints holy crap, in my thread? And I'd say anything above 60~+

>>16455482
>Really you have to create a trading algorithm with isn't fun in my opinion or reasonable work for what you might end up with (an algorithm that doesn't work 80% of the time) which also doesn't adjust to different markets. However it can be done and I've been close to it, but no cigar

That's the problem man, you're approaching from the wrong angle. You're never going to be able to beat the actual high frequency trading algos and never be able to get up to the second tickers. Nevermind the whole latency issue as well as fills issue. The deck is stacked against that.

What I'm sideying is a way to pull general internet chatter and sentiments on products and use that as markers for magnitudes.

>>16455492
StockTwits has the same issue, as does the platform twitter itself.

You basically need to find an unmolested corner of the internet.

>>16455521
I've got ~100k in a boring safe Schwabb account, mostly in boring equities.

This is 3k short term to play around with options, to get comfortable taking ~10k and more actively managing it.

>>16455455
Thanks for the response. I'll take into consideration the other posts you've made in this thread for platform advice. "Technicals" might be the only thing you mentioned I'm not very good with, but I understand the indicators at least, or what they are anyway.

My one question would be how do you decide what pricing models to use? Is it just based on which ones have the closest assumptions to your situation? Or do you run Monte Carlo simulations instead?

>>16455580
Ammm I gonna make it??

Holy shit, I never see 60%. When I see my calls get into 30s and 40s shit seems to get wild. I figured average IV to be like 25ish. Guess I gotta study this more.

>>16455562
>theta
Irrelevant

>Port size
It's really not a single number, or at least how I've designed it, however I trade with an account size of 70-110k +

>underlyings
Many.

>>16454405
1) You started learning when you were 18. When did you start trading options for a living?
2) Have you ever blown up your account? (Vast majority of people blow up their account within 90 days)
3) Do you compare the POP with the max win and max loss? (A spread might sell for a 20 cent credit with a max loss of 1 dollar and a POP of 75%. Placing that trade 4 time would yield 3 wins with a 60 cent gain and 1 loser with a 1 dollar loss)

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Going to bed shortly guys, I'll be sure to make another thread soon. Sorry to disappoint, feel free to converse though.
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>>16455588
You are definitely more creative than me.

>>16455653
Please do... need more stuff like this on /biz

>>16455596
More towards closest assumptions my my situation. The information I derived from online and collected really led me to trade the way I do, I didn't really observe all of my possibility's, but really which one was the safest and most probable.

>>16455612
IV doesn't have to be a high number to be "high", always reference historical volatility when assuming if a stocks current IV is high or low at the current time relative to the past.

>>16455633
to everyone else in this thread:
this is what a red flag looks like

>>16454405
>I trade option spreads independently for a living.
no you don't.

>>16455718
I’d like some context on the picture. It looks like it would be very painful

>>16455641
1. I slowly transitioned over from a job into option spreads once I had stable footing. I lived within my means I'll tell you that much.

2. No I have not, impossible to do if you use caution (small positions sizes) and have a strategy. (which most people don't have or do)

3. This is actually why most traders who trade with probability lose money, they don't set up the trade properly to begin with.

An algorithm to remember to see if a trade is even worth it (credit spread wise) would be

Credit = POP x Strike width
(Credit should be equal to or greater than to have a fair trade to begin with.)

>>16455702
Hmm how can I find historical options volatility? Never saw that on any charts.

>>16455666
Anytime friend. Thanks for participating.

>>16455727
If you don't believe me that's fine, there are plenty of other threads to enjoy.

>>16455733
Stephen mcdaniel interrogation, guys peak autism

>>16455741
These resources are available within your trading UI (application) Or at least should be. Try seeing if it's available, otherwise there might be an online resource.

>>16455741
Check out historical IV and IV percentile to get a more firm understanding. You won't regret it.

>>16455702
>always reference historical volatility when assuming if a stocks current IV is high or low at the current time relative to the past.

I'm using the 30day and 200day IV for comparison. Is that what you use?

Also do you ever long options for directional plays?

It would be good if you posted example trades for people to follow along.

We have a discord server you could join if you want.
I trade options and most people trade crypto in the discord and there are people writing their own trading bots.

my discord is VWRlc2g#4757 add me as a friend and I'll send you an invite.

My overall goal is to write a options trading bot that sell spreads mechanically like you do, so if you want to learn about automating your trades let me know.

Is the probability of profit thing you mentioned a website?

>>16455758
Well I guess I asked for it.
>In June 2011, the dismembered torso of Giddings, an Agnes Scott graduate and Mercer law student, was discovered in a trash cart outside her Macon, Georgia apartment. She was just 27.

Sorry for this grisly interlude into what is a very interesting thread. I want to learn more.

>>16455741
>Hmm how can I find historical options volatility? Never saw that on any charts.
Here's an example of historical IV for MUX
It's a one year chart from Interactive Brokers.

Do you have a trading account anywhere?

>>16455776
200day IV and 30day IV are both good information to reference to trades. However I'd choose the 200day since it's collected a large pool of information.

2. Occasionally but really I don't

3. I will next thread if you'd like.

4. Sure why not, I don't have a discord account but I'll make one and save your link

5. I think we can talk about that for sure.

6. POP is really another version of the Delta measurement but no it's integrated into the platform I use to trade with.

>>16455664
Thanks I think?

I can't recover my old paper trading account. Basic strategy was exploiting limited liquidity after hours, as well as 0 emotions because of automated trades. Set and forget.

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Going to bed now lads, Feel free to record anything you'd like to inquire about in the next thread. Thanks to everybody with open interest to the concepts explained/discussed today. I'll try to start the thread earlier in the day so I can stick around longer.
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>>16455772
Thanks fren, will do

>>16455828
Yeah, Robinhood mostly, but I got TD Ameritrade too. Don’t know how I missed this.

Can you give an example of a winning trade for you in recent memory from what made you find the opportunity, how you determined whether it was worth it, and through to when you decided to sell?

>>16455855
>200day IV and 30day IV are both good information to reference to trades. However I'd choose the 200day since it's collected a large pool of information.
I was following the tastytrade method of IV rank. Which is 30day IV compared to 200 day IV.
If 30 day IV is high relative to 200 day its a good time to sell options.
So you just look for high 200 day and sell then?
>2. Occasionally but really I don't
Look at leaps, I've made trades that go up 44x and 26x.
>3. I will next thread if you'd like.
Awesome.
>4. Sure why not, I don't have a discord account but I'll make one and save your link
Cool
>5. I think we can talk about that for sure.
Great, automated cashflow is the goal
>6. POP is really another version of the Delta measurement but no it's integrated into the platform I use to trade with.
I'll have to look for it in interactive brokers.

>>16455890
good night fren

>>16455908
>Yeah, Robinhood mostly, but I got TD Ameritrade too.
>Don’t know how I missed this.
What did you miss? the MUX trade or the historical options chart.

>>16455983
>Can you give an example of a winning trade for you in recent memory from what made you find the opportunity, how you determined whether it was worth it, and through to when you decided to sell?
Apparently that anon will give examples in their next post.

You want a trade you can put on now?
max loss is $70. I can explain it too you.

>>16454405
join @ChadLounge on telegram

>>16456114
>You want a trade you can put on now?
>max loss is $70. I can explain it too you.
I'm off so just in case you wanted it.

If you sell a $1 Jan 2022 put option today you could get paid $0.25
Option contracts are done in 100 lots, so multiply the numbers by 100.

If MUX goes to $0 you lose $75
If MUX is above $1 by Jan 2022 you made the $25 by risking $100.

>>16455339
I want to become one I am going to take the F Exam in March. I graduated with a BA Finance degree so that exam should be easier than the other ones. Besides passing those exams any ideas to keep those concepts I learn fresh? I am thinking making an algo trading bot with python. I will most of my knowledge to sell UILs to middle class families after I pass my insurance broker exam

>>16456285
You mean Exam FM? Most of the other exams build off of what you learn for FM and P, so they'll stay fresh as long as you use them. My only advice for the ASA exams would be to use Coaching Actuaries. I know they're shilled everywhere but it really is the best way to do it. You'll remember anything you learn on the job. But other than that, print out the formula sheets from Coaching Actuaries (they're free for every exam once you buy just one, I think) and there you have a refresher of the entire exam anytime you need it. Once you pass Exam IFM though, which uses FM, you'll never forget what you learned from just Exam FM because you'll have used it so much.

>>16456328
I downloaded old pdf manuals but id rather be safe and it looks like they offer pass guarantees so I will check it out. Thank you fren

>>16455388
Can you describe how you use POP to make trading decisions? For example, if the premium on an OTM call is 2% of the contract notional value, but it only has a POP of 1%, then you would sell the call?