All Activityhttps://steadyoptions.com/discover/SteadyOptions - All ActivityenWelcome to Steady FuturesOur trades will be posted in about 20-30 minFri, 18 Sep 2020 14:32:11 +0000<![CDATA[Chartaffair.com - RV Charts & Backtesting for Steady Options]]>@Christof+ Website is woorking good now, I'll try IB API soon.Wed, 16 Sep 2020 17:33:46 +0000How to determine ROI for Bullish Put Spread?Thanks, to everyone very much for suggestions (^v^)Tue, 15 Sep 2020 16:05:39 +0000<![CDATA[Chartaffair.com - RV Charts & Backtesting for Steady Options]]>@bandito I've checked the site, all RV charts I checked look ok and are up-to-date. I have also not received any other user complaints so far. Can you please send me via personal message the symbols you see missing data so I can take a look?Tue, 15 Sep 2020 09:30:40 +0000<![CDATA[Chartaffair.com - RV Charts & Backtesting for Steady Options]]>@Christof+Other thing, RV charts have not been updated since September 10thTue, 15 Sep 2020 05:09:49 +0000<![CDATA[Chartaffair.com - RV Charts & Backtesting for Steady Options]]>@Christof+:Yes, I followed your instructioms. I reinstall IB API, but not working.Mon, 14 Sep 2020 19:30:20 +0000How to determine ROI for Bullish Put Spread?Lots of educational stuff out there that is legit. Everything I've read on the SO site has been really good. For the real basics, the OIC or Options Industry Council has some great webinars and educational stuff, if you have the patience for webinars. The only books on options I've really studied were the Options as a Strategic Investment, this can be used as a text book, reading what you understand and working your way through it.
Your question is a very basic one, so you need to do some education on options. Any naked short option is an altogether different critter than a vertical spread, shorting puts looks easy until you misjudge or worse, don't take a nasty loss to prevent an overwhelming one, then you get your hat handed to you.Mon, 14 Sep 2020 18:30:55 +0000<![CDATA[Chartaffair.com - RV Charts & Backtesting for Steady Options]]>Hi @bandito,
Appreciate it. Did you follow all the instructions on the download page? Possible try to de-install and reinstall IB API, it will take only little time. If it still dies not work please drop me a PM.Mon, 14 Sep 2020 17:43:19 +0000<![CDATA[Chartaffair.com - RV Charts & Backtesting for Steady Options]]>@Christof+ Hi, I subscribed your service and I'd like to try excel RT-EV Tool, but I get error always.
Screenshot enclosed.
Thx.Mon, 14 Sep 2020 17:20:57 +0000How to determine ROI for Bullish Put Spread?I would like to know the Pros and Cons between Sell Put vs Bullish Put Spread.
Which one is better under different situation?
Does anyone have any suggestions?
Thanks, to everyone very much for any suggestions (^v^)Mon, 14 Sep 2020 16:44:09 +0000How to determine ROI for Bullish Put Spread?Thanks, to everyone very much for suggestions (^v^)Mon, 14 Sep 2020 15:52:49 +0000How to determine ROI for Bullish Put Spread?@oemOptions I would suggest reading the articles that we posed links to. They should provide you with the information you need. for more educational articles, please visit our Education Center
Education CenterMon, 14 Sep 2020 15:45:07 +0000How to determine ROI for Bullish Put Spread?For Bullish Put Spread, if ROI is determined by 2.5/6 = 42% without considering probability.
I think this calculation is playing trick on math without considering probability, so I get no idea on how to compare ROI between Sell Put vs Bullish Put Spread in order to determine on which one is better.
Do you have any suggestions?
Thanks, to everyone very much for any suggestions (^v^)Mon, 14 Sep 2020 15:36:24 +0000How to determine ROI for Bullish Put Spread?Risk Reward Or Probability Of Success?
Calculating The Probability Of Option Payoff
Option Payoff Probability
Probability And Option Risk
Risk/reward and probability of success always have reverse relationship. High probability of success means lousy risk/reward (you risk $8 to make $2).
Generally speaking, 50% probability typically translates to 1:1 risk/reward (risking $5 to make $5).Mon, 14 Sep 2020 15:30:46 +0000How to determine ROI for Bullish Put Spread?Case 1
For Sell Put 100, ROI is simply premium / Strike Price
Max Profit is $8
Max Lose is $100 with probability 3%
How to determine ROI?
Case 2
For Bullish Put Spread = Sell Put 100 + Buy Put 90
Max Profit is $4
Max Lose is $10 with probability 33%
How to determine ROI?
I would like to compare on which ROI is higher with considering probability.
Do you have any suggestions?
Thanks, to everyone very much for any suggestions (^v^)Mon, 14 Sep 2020 15:26:01 +0000How to determine ROI for Bullish Put Spread?🤐 I'll have to check my system for trackers 😂Mon, 14 Sep 2020 15:17:14 +0000How to determine ROI for Bullish Put Spread?ROI for Credit spreads is calculated as described in this article.
In short, being a credit spread, ROI is calculated based on margin requirement (your investment).
The margin requirement is (Spread Width -Credit Received) x 100.Mon, 14 Sep 2020 15:15:58 +0000How to determine ROI for Bullish Put Spread?For more details, you can read How To Calculate ROI On Credit SpreadsMon, 14 Sep 2020 15:15:02 +0000How to determine ROI for Bullish Put Spread?Max profit is : $4
Max Loss is : -$6
ROI will be worked out at the time of close - say you open for 4, and close the trade by buying back the put spread for 1.5, then your net profit is 2.5, and this gives an ROI of
2.5/6 = 42%Mon, 14 Sep 2020 15:06:48 +0000How to determine ROI for Bullish Put Spread?I would like to know on how to determine ROI for Bullish Put Spread.
For Sell Put 100, ROI is simply premium / Strike Price
For Bullish Put Spread = Sell Put 100 + Buy Put 90
Max Profit is $4
Max Lose is $10
Does anyone have any suggestions?
Thanks in advanceMon, 14 Sep 2020 14:57:03 +0000Put/Call Parity: Two Definitionshttps://steadyoptions.com/articles/putcall-parity-two-definitions-r601/As a starting point, “parity” does not mean equalization of bid and ask. The differences in these two prices often are misused and misapplied. For example, in the calculation of pricing models such as Black-Scholes, the most used “premium” is the mid-point between bid and ask. However, this price never applies to either side. To be truly accurate, and pricing model should calculate two prices, one for buyers and the other for sellers. If the net between the two prices is zero after allowing for transaction costs, this could represent one version of parity.
The variations in bid and ask will rely on volatility, but also on moneyness and time to expiration. It is not fixed in time. However, for the purpose of identifying whether a given trade makes sense or not, the spread between the two prices is of great concern. The wider the spread, the more difficult it becomes to achieve parity.
Simple net price parity
The first and easiest definition of put/call parity is related directly to the bid and ask prices. For example, Boeing (BA) closed on August 27 at $51.72 per share. The closing prices of the September 4 options at 51.50 strike were:
Call, bid 1.18, less transaction fee of 0.05 = 1.13
Put, ask 1.07, plus transaction fee of 0.05 = 1.12
The two prices are only one cent apart, practically at par. If a synthetic short stock trade were opened, the net position would reflect a one-cent difference in the two sides. Another adjustment would be for the difference between underlying price of $51.72 and option strike of 51.50, or 0.22. This is close enough to at-the-money that the significance of this adjustment is not great. The synthetic position may still be assumed to be at put/call parity despite the one-cent net offset in prices or the 22-cent difference between strike and underlying price.
For those trades like synthetics, the closer to put/call parity, the more desirable. With this achievable, less adjustment will be required to realize a net profit. In the case of the synthetic, the net cost may be assigned a value of zero (or close to it), so that a small move in the long side would be profitable, and on the short side, time decay is assumed to take care of the changes realized due to price movement. This all assumes that price movement is not extreme on either side, and one danger of any combination is that the underlying will move in the undesired direction. Consequently, the options will also reflect a disappointing outcome, mirroring the underlying price changes.
Present value parity
The second version of put/call parity is more complex and involves calculation of present value based on an assumed interest rate. The calculation is based on European expiration of both the call and the put. The purpose of this calculation is to decide (based on the assumption involved) whether a trade is desirable. The time to expiration and moneyness of the options also come into consideration, as with all strategies.
The calculation combines premium of both sides as well as time to expiration:
C + X ÷ ( 1 + r)t = P + U
C call premium
X strike
R assumed interest rate
T time to expiration
P put premium
U underlying price
This version of put/call parity is applied more in arbitrage trading than in the day-to-day and short-term speculation trades. When a cheaper combination is bought and a more expensive combination is sold, arbitrage strategies assume the result is riskless profit. Whether this works out in practice is a separate question.
For most traders, with emphasis on short-term trading and even speculative positions, the inclusion of interest rate assumptions and present value are not of great concern. It is more likely that moneyness and time to expiration will influence decisions, and of course the spread between bid and ask. The spread measures the potential profitability of a combination, but unfortunately this often is overlooked or discounted, especially if a net credit is possible with a given strategy.
The assumed interest rate adds an element of uncertainty to the advanced calculation. Remembering that the mid-point between bid and ask is not accurate for either side, the use of any interest rate only complicates the outcome. Considering that this calculation is based on European style options, what happens for American style? The formula is accurate only if the positions are left open until the last trading day, and this restriction limits the usefulness of the put/call parity formula.
Yet another complication is found when dividends are involved, and when the ex-dividend date falls within the period in which the options will remain open. This further distorts the reliability of put/call parity, because (a) if the trader also owns shares, dividends represent added income, or (b) if the call is on the short side of a trade, dividend capture may throw the trade into turmoil if exercise occurs and the combination trader must recognize a net loss.
The takeaway from this is that the first version of put/call parity is simple, but it offers a realistic method for identifying value of a combination. Parity is desirable in traders such as synthetic long or short stock, and if the net credit/debit is at or close to parity, the trade is likely to be more desirable than one with a large spread, especially if the net is a debit. That means that to yield a profit, price movement must occur in the right direct, and must exceed the debit as well.
In comparison, the many variable involved with the second form of put/call parity make it practical in arbitrage trading, but less so for most traders whose short-term traders are normally based on American style options and not in consideration if interest rates or dividends.
Michael C. Thomsett is a widely published author with over 80 business and investing books, including the best-selling Getting Started in Options, coming out in its 10th edition later this year. He also wrote the recently released The Mathematics of Options. Thomsett is a frequent speaker at trade shows and blogs on his website at Thomsett Publishing as well as on Seeking Alpha, LinkedIn, Twitter and Facebook.Fri, 11 Sep 2020 18:49:00 +0000Using VIX Options to Hedge Your PortfolioVIX options are very expensive at this point, so I'm not sure this is a good strategy at this point.Thu, 10 Sep 2020 02:08:32 +0000Using VIX Options to Hedge Your PortfolioIm just reading this article and finding this an interesting hedge. Do you think this is a valid trade in this volatile environment? ThanksWed, 09 Sep 2020 19:58:27 +0000Not making money yetDo you use ONE or any other option analytics software? If you want to export a report of your trades (or just the relevant ones), I'd be happy to take a look at that. You could also probably do this through your broker, depending on who your broker is. I do want to be clear that I'm not claiming to be some expert, but I could at least tell you if I see any obvious problems.
To respect Kim's request, either direct message me the info or post it in a private topic on the members only forum.Wed, 09 Sep 2020 16:17:57 +0000Not making money yetI don't think a public forum is an appropriate place to discuss specific trades. Discussing general issues on a public forum is fine, but I would prefer not to discuss specifics and details on a public forum. Please create a new topic under members forum or discuss it privately. Thank you for your understanding.Wed, 09 Sep 2020 15:01:54 +0000