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  2. Brokers and commissions

    @Kim, what's are the known downsides / pitfalls of the Tradier's 40 bucks flat fee offer? How much worse the experience / fills / other stuff that we don't know about? With IB and multiple SO services I am out of several K in commissions, which with Tradier would've been 360 so far. Quite a difference, however this tread makes me think of the proverbial free lunch that is nowhere to be found
  3. Brokers and commissions

    Yes, it is similar if you were able to negotiate 0.75 with TOS. To me, the fact that you even need to negotiate while you get much lower rates with many other options friendly brokers is a disgrace. In my opinion, they don't deserve your business. There are too many other excellent alternatives today. When I argued about rates with TOS Trade Desk Manager, his response was: "IB has a place in this industry much like the discount retail stores do in their industry. It comes down to what the client wants, you can buy a car for 10k that will get your from point A to point B but there is also a market for a 30k car which will do the same but with a better experience." How arrogant is this? IB is constantly recognized as the best broker by Barrons, year after year, and he compares it to a 10k car?
  4. Brokers and commissions

    @YowsterTherefore, if one is trading a wide variety of options (both equity and index), TOS & IB are more a less a wash as far commissions/fees are concerned for most moderate volume traders. The advantage, if true, is the better fills at IB. What would be interesting is a test. Several of us enter the same exact trade at exactly the same time at IB, TOS, Tastyworks, Tradier, etc., and see who gets filled first & who gets the best fill. Of course, some here have probably already done this. If, indeed, the fills are better at IB, trade index options on TOS & the rest either at IB or the other brokerages if the latters' lower commission structure overcomes any fill disadvantages.
  5. Brokers and commissions

    @Alan IB does not have a flat fee structure. However, I can tell you that having trading thousands of contracts each year the IB commissions (including exchange fees) averages right around 0.75 per contract. Sometime you pay more, sometimes you pay less, sometimes (rarely) you even get a credit where you are paid to execute the trade. Option trades for 0.01 are always commission free (and in general trades with options worth only a few cents tend to be cheaper commissions). Bottom line is that if you trade a lot of contracts each year then your commissions will average out to be pretty close to 0.75 per contract.
  6. Today
  7. Brokers and commissions

    For a single leg option, when you close the position, i think there is no commission if it's 0.01 or 0.02, i don't remember exactly. https://www.interactivebrokers.com/en/index.php?f=1590&p=options1 "Commissions are not charged for US cabinet buy-to-close trades." Also note that on single leg options, sometimes you can get rebates as well. For IB, i don't think that they negociate. I might be wrong. What you see is what you get.
  8. Brokers and commissions

    @Kim & @sakuraIf the fills are definitely better with IB, that is important to know. Also, the absence of assignment and exercise fees is definitely a bonus. I called IB today to ask a few questions. They told me the following. Please let me know if your experience is different. 1) If one has a 0.70 contract rate at IB & one closes out a short option position between 0.05 - 0.10, the commission drops to 0.50. If the short option is below 0.05, the commission drops to 0.25. I asked if the commission ever goes to zero, and the person I talked to said "no". However, I do believe I have heard IB traders here say that below a certain level they are not charged a commission. For comparison, at TOS there is no reduction in commission between 0.05 & 0.10, but at 0.05 & under there is no commission charged at all. 2) If one is trading index options, IB adds the 0.44 exchange fee per contract to the 0.70 commission. Therefore, the roundtrip cost is 2.28 per contract. I asked if it is possible to negotiate a waiver of the exchange fees if trading large volumes and was told that any negotiation of this would have to be directly with the exchange. I cannot imagine the exchange waiving the fee, but who knows. The person I talked to at IB said that IB would not absorb the fee. This is where TOS appears to be more appealing. If one is at a commission rate greater 0.50, TOS will absorb the exchange fees. If one is under 0.50, they will add the exchange fees. Note that it is possible to get commission rates much lower than 0.75 (i.e. under 0.50) at TOS, but one will have to trade very large volumes. I imagine the same is available at IB. If the fills, indeed, are much better at IB, that argues strongly for the SO strategies where it seems that any advantage in fills can make a significant difference is returns. One of the things that I like to take into consideration when assessing a strategy is scalability. Can the strategy be traded with a large account? It is quite possible that Chris' experience with the fund is a model for trading the SO strategies in large amounts. Hopefully, that is working out well, and he is getting results similar to the SO performance results. It would be nice to know that if I am successful with the SO trades, I would be able to ramp up the account. That said, with the exception of a few equity options with very large open interest, I generally have looked to index options as the way to potentially trade a large account. Of course, that requires finding a strategy that works - I am still looking. However, if one is fortunate to find such a strategy, the large open interest of index options plus their generally higher prices means that that one can conceivably trade a 5 or 6 figure account. That IB does not absorb exchange fess puts a damper on using them for any such index option strategy. For those of you with IB accounts, have any of you been able to get a fee structure without the added exchange fee for index options?
  9. Brokers and commissions

    Assigment fee ZERO. Exercise fee ZERO.
  10. Brokers and commissions

    I was able to negotiate with TOS my commissions from 1.5 to 1 per option trade recently. The problem is that TOS would not reduce my option assignment fees which are 15 and increased commissions for a stock from 5 to 6.95. What are assignment fees at IB?
  11. Brokers and commissions

    Yeah.... @Kim, I hear what you are saying. Actually I even have an account at IB and have been trading it for years already (not too actively, of late). But my account at TOS is a lot bigger and I am using a part of that account for my SO trades. And... I am somewhat lazy in moving some more funds over to IB so I can do my SO trading over there. And, honestly I do not like the TWS platform, at all. I'm very happy with the TOS platforms, both mobile as desktop. But maybe I should give TWS another try. I will give it some more thought ;-) You are of course right about the low commissions and better fills.
  12. Brokers and commissions

    I must say that it puzzles me why people negotiate a rate with TOS which they can get with IB without any negotiation? The fact that you even need to negotiate to get a good rate speaks volume. And fills at TOS are consistently worse than IB.
  13. Brokers and commissions

    LOL, you are right. I now realise I am also in the $0.75 plan.... Forgot I bargained about a year ago, like you did. ;-)
  14. Brokers and commissions

    I was at 1.50 with TOS for years. About a year ago (maybe a bit longer), suddenly TOS became open to lowering the rates. I managed to get down to 0.75, and I know many others who also managed the same. I also heard that some managed to get down to 0.60, but they were doing very large volume. I do not know if they are still quite as accommodating. An added bonus for TOS, at least for me, is that customer support has been very good. That said, if the smart routing at IB really is much better than TOS, that could make a big difference. Ergo, my original question.
  15. Brokers and commissions

    You can negotiate even lower with TOS. I know for a fact some retail traders pay $1 a contract. Probably still more than other brokers, but lower than $1.25.
  16. Brokers and commissions

    TOS is not competitive from a commissions standpoint. I know with TW, I save 50-75% in commissions over TOS, and that is based on the negotiated rate of $1.25 per contract price. However, it seems like I don't get quite as good of fills as is reported here with IB.
  17. Brokers and commissions

    I don't know whether TOS does the same kind of routing, to different exchanges, for spreads, that IB does. But, since people are very commission conscious , as they should be...I am at IB, and don't know what is going on but, in the past few weeks, the commissions on most 2 leg spreads, have been .57 cents, which is .28 cents per leg. Maybe this has something to do with their routing systems, but this is about as low as I have seen.
  18. Brokers and commissions

    I happen to be with TOS. One of the benefits of IB that has been mentioned is "Smart Routing". Today I called TOS and asked them about smart routing. Specifically, I asked whether the legs of a multilegged position would be sent to different exchanges in order to facilitate a fill. He said that TOS, like IB, does do it this way. Does anyone happen to know whether this is true or not?
  19. How Position Sizing Impacts Your Returns

    I'm trying not to have more than 10-12 positions in the trading account. Of course long term accounts are different. But it's really personal choice, you need to go with what you feel comfortable.
  20. How Position Sizing Impacts Your Returns

    I read this article again because of the recent TLRY trade. Excellent article. Question for Kim. If I follow this article what is the limit you would use of trades to have open at any one time?? Many Thanks
  21. Yesterday
  22. Revisiting Anchor Part 2

    Selling calls for a credit to help offset the cost of the hedge is, more often than not, a losing strategy over time in the Anchor strategy. It tends to hurt performance more than help it; About a month is the ideal period for selling short puts over both in bull and bear markets. This tends to be the ideal trade off between decay, being able to hold through minor price fluctuations, and available extrinsic value. Since options come out weekly, we’ll be using a 28-day period; Rolling on a set day like Friday is not the most efficient method of rolling the short puts. Rather having a profit target of between 35% to 50%, and rolling when that target is hit, leads to vastly improved outcomes. Waiting until profits get above 50% tends to start negatively impacting the trade on average. This month we’re going to look at another technique which has the possibility of increasing Anchor’s performance over time – namely reducing the hedge. Reducing the Hedge The single biggest cost to Anchor is the hedge. Depending on when the hedge is purchased, it can cost anywhere from 5% to 15% of the value of the entire portfolio. In large bull markets, which result in having to roll the hedge up several times in a year, we have seen this cost eat a substantial part of the gains in the underlying stocks and/or ETFs. There is also the issue of not being “fully” invested and this resulting in lagging the market. If the cost of the hedge is 8%, then we are only 92% long. In other words if our ETFs go up 100 points, our portfolio would only go up 92 points. A large hedge cost also has a negative impact at the start of a bear market as well due to the losses on the short puts. If the market drops a mild amount, particularly soon after purchasing the hedge, the losses on the short puts will exceed the gains on the long puts, negatively impacting performance. This loss is less noticeable as the long hedge gets nearer to expiration and/or market losses increase as delta of the long hedge and the short puts both end up about the same. However, as was seen a few years ago, if the market drops slightly, then rebounds, those losses on the short puts are realized and any gains on the long puts are lost when the market rebounds. If there was a way to reduce the cost of the hedge, without dramatically increasing risk, the entire strategy would benefit. A possible solution comes from slightly “under hedging.” Testing over the periods from 2012 to the present and from 2007 to the present has revealed if we only hedged 95% of the portfolio, returns would be significantly improved. Let’s take a look at the data from the close of market on September 14, 2018, when SPY was at 290.88. If we were to enter the hedge, we would have bought the September 20, 2019 290 Puts for $14.96. If we have a theoretical $90,000 portfolio, it would take 3.1 puts to hedge (we can’t have 3.1puts so we’ll round down to 3). At that price, three puts would cost $4,488 or 5% of the portfolio (almost historically low). However, if we were to say “I am not upset if I lose five percent of my portfolio value due to market movements; I am just really worried about large losses,” we could buy the 275 puts instead of the 290. The 275 puts are trading at $10.61 – a discount of thirty percent. This means we need less short puts to pay for the position, paying for the position is a simpler process, and rolling up in a large bull market is cheaper. Yes it comes at a cost – risking the first five percent – but given the stock markets trend positive over time, this pays off in spades over longer investment horizons. Even if you are near retirement, any planning you do should not be largely impacted by a five percent loss, but the gains which can come from (a) having a larger portion of your portfolio invested in long positions instead of the hedge (meaning less lag in market gains), (b) having less risk on the short puts in minor market fluctuations, and (c) paying for the hedge in full more frequently more than offset that over time. We will implement this in the official Anchor portfolios by simply delaying a roll up from gains. The official portfolio is in the January 19, 2019 280 puts. We’d normally roll around a 7% or 10% gain (or around SPY 300), instead we’ll just hold until we get to our five percent margin. OR when we roll the long puts around the start of December, we’ll then roll out and down to hit our target. Note – if you do want to continue to be “fully” hedged, you can do so. There’s nothing wrong with this, you just sacrifice significant upside potential and will be continuing to perform as Anchor has recently. If we had implemented this change in 2012, Anchor’s performance would have been more than five percent per year higher. This is not an insignificant difference. Related articles: Defining The Anchor Strategy Market Thoughts And Anchor Update Leveraged Anchor Is Boosting Performance Anchor Trades Strategy Performance Revisiting Anchor (Thanks To ORATS Wheel)
  23. Option Stack

    I saw that on their site and it looked pretty impressive. But, I'm just wondering if it is just showing what the p/l, and risk parameters of a given trade look like, which we already pretty much know. Or, is it taking the specific spread that you want to see, and then bring up the spread in the light of it's history, for that specific stock, and how that specific spread performed in the past , using past data. Sort of like a variation of the vol hq RV charts, which show how a calendar, or straddle, for a specific stock has performed over the past 8 cycles. If it can do this sort of thing, that would be a great tool. It looked a bit complicated, and I wanted to explore it more but you had to subscribe before you can even run a few tests just to see how it all works. ivolatilty looks different than this , but it does have a massive data base of the history of every single option, going back like 10+ years. With their spread scanners you can setup the parameters of the kind of spreads you would be interested in ( ex. front month IV higher than back month IV, in a calendar, and by what %). That is just one example. But they both seem like tools that a bit complicated and will take some time to master. With ivolatilty, for every one one their products, they allow you a free download of the users manual for each product so you can really see exactly what it can do before signing up.
  24. Option Stack

    Does ivolatility have backtesting like optionstack though? At optionstack it seems like you can put together almost any trade you can think of. Screenshot example below for an iron condor. The rules available for assembling trades seem very comprehensive.
  25. Option Stack

    This looks interesting. I have to check it out further but, you should also look into ivolatility.com. They have been around forever, and have one of the most extensive data bases of all options ( stocks, futures etc). The have so many different tools (screeners, scanners) to evaluate anything you can possibly think of with data that goes back endlessly. A few months ago Kim had mentioned that he was looking into getting an SO discount for us here. But the prices for these tools are very close to optionstack ($39-$79)...so it is not crazy expensive for what you are getting.
  26. Option Stack

    Is anyone here a current user of optionstack? I've been considering putting in some time to learn the software and getting a premium account. I'm curious how much people actually use it. Also I saw that the free account only gets you 2016. Do the premium accounts get your current data? For instance, is it 2014 to 2018 for the basic account and 2010 to 2018 for the advanced account?
  27. Last week
  28. The Lorintine SITREP

    Interesting data. Is it actionable? I wonder if a momentum based system would have you out during the correction and back in during the up move?
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