Jump to content
SteadyOptions is an options trading forum where you can find solutions from top options traders. TRY IT FREE!

We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

Kim

CMLviz Trade Machine

732 posts in this topic

Recommended Posts

28 minutes ago, Mary said:

 

The Oracle trade I entered (see previous post) on 9/11, automatically ended today for I had set the “Risk Management” to close the trade when gain is above 40% as suggested by Ophir in his article. It had one more day to play out; however, I am pleased to be conservative and take the gain now. @Ophir GottliebThank you to Ophir for your outstanding  suggestions.

@KimAnd, “Thank You” to Kim for this fantastic forum; it is a rich treasury of ideas. 

It is priceless! Oops. I shouldn’t have said that; you might raise the subscription price.

 

Very happy to hear that. I did it as well, hopped out with 45% gain.

Share this post


Link to post
Share on other sites
32 minutes ago, Mary said:

 

The Oracle trade I entered (see previous post) on 9/11, automatically ended today for I had set the “Risk Management” to close the trade when gain is above 40% as suggested by Ophir in his article. It had one more day to play out; however, I am pleased to be conservative and take the gain now. @Ophir GottliebThank you to Ophir for your outstanding  suggestions.

@KimAnd, “Thank You” to Kim for this fantastic forum; it is a rich treasury of ideas. 

It is priceless! Oops. I shouldn’t have said that; you might raise the subscription price.

 

@Mary Just curious. Which article are you referring to? Do you have a link to it?

Share this post


Link to post
Share on other sites
2 minutes ago, Ophir Gottlieb said:

machine learning

I'm curious about that part : can you clarify what do you mean by machine learning, more specifically which part of the machine learning theory are you referring to ?

Interesting article about ORCL nonetheless.

Share this post


Link to post
Share on other sites

Just watched the recording of the webinar...the recorded portion seemed to me to show a lot of over fitting. How is looking back to find one (or a few stocks) where a strategy worked (and many did not) going to be of any value in live trading? Maybe I missed it but I did not see a thesis as to why something would work for FB but not AAPL. Find the one person in ten that flipped heads five times and bet on him???

Share this post


Link to post
Share on other sites
41 minutes ago, TheJersus said:

Just watched the recording of the webinar...the recorded portion seemed to me to show a lot of over fitting. How is looking back to find one (or a few stocks) where a strategy worked (and many did not) going to be of any value in live trading? Maybe I missed it but I did not see a thesis as to why something would work for FB but not AAPL. Find the one person in ten that flipped heads five times and bet on him???

 

Agreed.  But take a strategy and try it out on 50 or even 100 stocks, 5 at a time, and record your results in a spreadsheet.  This allows you to calculate median returns, and if you're good with excel, you can even do a little portfolio modelling.  

When you do that a few times, you can often find things that stand a much better chance of working in the future.

I've been trading a simple credit spread setup that I tested this way and it's done done extremely well over the last few months.  

 

Share this post


Link to post
Share on other sites
3 hours ago, TheJersus said:

Just watched the recording of the webinar...the recorded portion seemed to me to show a lot of over fitting. How is looking back to find one (or a few stocks) where a strategy worked (and many did not) going to be of any value in live trading? Maybe I missed it but I did not see a thesis as to why something would work for FB but not AAPL. Find the one person in ten that flipped heads five times and bet on him???

Trading is a business based on probability. 

 

Nothing works all the time. Otherwise it would never work in the first place. There’s no room for ‘never’ or ‘always’ in the financial markets. Otherwise you’re sure to be surprised in the future.

 

It is very important to understand the difference between probability and certainty. Nothing is certain in the trading. But if something happened 80% of the time, there is a good chance it will happened again. For example: if a stock moved after earnings less than the expected move in 8 out of 10 last cycles, there is a 80% chance that it might happen again the next cycle. Again, there is no certainty that it will happen, only probability. But this is the best we can do.

 

If you believe that a stock will be trading in a range in the next few weeks, you would enter a strategy like calendar or iron condor. At the same time, if you believe the stock will move, you will probably do a straddle. Well, TradeMachine  removes the "guessing" part. It allows you to discover patterns that stocks are trading in different periods of time. It also allows you to check different parameters, like deltas, time to expiration, profit targets etc. and to optimize the strategy.

 

Again, no guarantees that what worked will continue to work. But doing iron condor on FB after earnings has much better probability to succeed that doing the same trade on GOOG, NFLX or AMZN. Why? Because it worked most of the time.

 

Members continue posting their winning trades based on TradeMachine backtesting. This is real life trading, not some hypothetical results. We already closed FB trade based on TradeMachine backtesting and started implementing TLT strategy based on the same backtesting. 

 

This is not some kind of sleazy marketing. It really works.  

 

Share this post


Link to post
Share on other sites
4 minutes ago, Kim said:

Trading is a business based on probability. 

 

Nothing works all the time. Otherwise it would never work in the first place. There’s no room for ‘never’ or ‘always’ in the financial markets. Otherwise you’re sure to be surprised in the future.

 

It is very important to understand the difference between probability and certainty. Nothing is certain in the trading. But if something happened 80% of the time, there is a good chance it will happened again. For example: if a stock moved after earnings less than the expected move in 8 out of 10 last cycles, there is a 80% chance that it might happen again the next cycle. Again, there is no certainty that it will happen, only probability. But this is the best we can do.

 

If you believe that a stock will be trading in a range in the next few weeks, you would enter a strategy like calendar or iron condor. At the same time, if you believe the stock will move, you will probably do a straddle. Well, TradeMachine  removes the "guessing" part. It allows you to discover patterns that stocks are trading in different periods of time. It also allows you to check different parameters, like deltas, time to expiration, profit targets etc. and to optimize the strategy.

 

Again, no guarantees that what worked will continue to work. But doing iron condor on FB after earnings has much better probability to succeed that doing the same trade on GOOG, NFLX or AMZN. Why? Because it worked most of the time.

 

Members continue posting their winning trades based on TradeMachine backtesting. This is real life trading, not some hypothetical results. We already closed FB trade based on TradeMachine backtesting and started implementing TLT strategy based on the same backtesting. 

 

This is not some kind of sleazy marketing. It really works.  

 

"For example: if a stock moved after earnings less than the expected move in 8 out of 10 last cycles, there is a 80% chance that it might happen again the next cycle."

Way too small of a data pool to have any validity.

You would need, at a minimum  ....ideally 1000 occurances, but at least 100 to make sense.

8 outcomes = 0 outcomes in statistics.

Share this post


Link to post
Share on other sites
3 minutes ago, cuegis said:

"For example: if a stock moved after earnings less than the expected move in 8 out of 10 last cycles, there is a 80% chance that it might happen again the next cycle."

Way too small of a data pool to have any validity.

You would need, at a minimum  ....ideally 1000 occurances, but at least 100 to make sense.

8 outcomes = 0 outcomes in statistics.

And yet we have 77-80% winning ratio on most of our strategies while looking at 4-6 last earnings cycles in most of our trades..

 

Theoretically you are correct. Practically we cannot look at 1000, 100 or even 20 occurrences. 

Share this post


Link to post
Share on other sites
16 hours ago, Kim said:

Trading is a business based on probability. 

 

Nothing works all the time. Otherwise it would never work in the first place. There’s no room for ‘never’ or ‘always’ in the financial markets. Otherwise you’re sure to be surprised in the future.

 

It is very important to understand the difference between probability and certainty. Nothing is certain in the trading. But if something happened 80% of the time, there is a good chance it will happened again. For example: if a stock moved after earnings less than the expected move in 8 out of 10 last cycles, there is a 80% chance that it might happen again the next cycle. Again, there is no certainty that it will happen, only probability. But this is the best we can do.

 

If you believe that a stock will be trading in a range in the next few weeks, you would enter a strategy like calendar or iron condor. At the same time, if you believe the stock will move, you will probably do a straddle. Well, TradeMachine  removes the "guessing" part. It allows you to discover patterns that stocks are trading in different periods of time. It also allows you to check different parameters, like deltas, time to expiration, profit targets etc. and to optimize the strategy.

 

Again, no guarantees that what worked will continue to work. But doing iron condor on FB after earnings has much better probability to succeed that doing the same trade on GOOG, NFLX or AMZN. Why? Because it worked most of the time.

 

Members continue posting their winning trades based on TradeMachine backtesting. This is real life trading, not some hypothetical results. We already closed FB trade based on TradeMachine backtesting and started implementing TLT strategy based on the same backtesting. 

 

This is not some kind of sleazy marketing. It really works.  

 

I'm not suggesting anything is sleazy, I'm sure it's a great tool. I'm just trying to understand how it works and how it is applied. The sum total of my knowledge on this product is a brief fast paced webinar. I also understand the purpose of the webinar was to demo features, not be a training session on back testing methodology. So, I would like to understand how it is applied to real trading. I also acknowledge I have more background in other areas of investment and as a newbie I'm open to learning what does and does not apply to the world of options. So, a few options newbie questions:

1. A key principle of back-testing/fitting is the concept of out of sample testing: Pick a point in time, say 2010 and develop your rules/system using only the data that was available a that time (the sample data). Then, walk it forward from 2011 to present to see how it would have performed (the testing data). Not splitting the data in some fashion is almost a guarantee of fantastic results. So, does the software (or how it is generally applied) test in-sample or out-of-sample? In the webinar, I only saw in-sample which prompted the original post. (Systematic Trading by Robert Carver provides a great discussion of over fitting).

2. For a strategy to be considered robust, it generally should work across a markets and time frames. If I am developing a trend following system for futures and it only works for soybeans over the past nine months, I probably don't have much of a strategy. Unless, of course, there is a thesis to go with it: e.g. identification of something that changed in only the soybean market nine months ago. So, I would like to understand how looking at the behavior of an individual stock over a relatively short sample period translates to a robust enduring strategy. How do we know we are not being fooled be randomness? 

3. In another post in this thread you stated a win rate as evidence the tool works. Great, but I would like to know more to really know the effectiveness of the tool. What is the win rate for the base strategies without application of the back tester? More importantly, how much did the back tester increase profit for winners and/or decrease the losses on the losers?

4. You also stated in another response that as a practical matter you can't look at "...even 20 occurrences". Why not? How can there be confidence in any back test with a tiny sample size. I would just like to understand this one.

Thanks 

 

 

Share this post


Link to post
Share on other sites

So lets take as an example two of our main strategies: pre-earnings straddles and calendars.

Our goal is to find stocks that are suitable for straddle and those that are suitable for calendars. There are patterns. Some stocks tend to move 1-2 weeks before earnings in expectation for earnings beat. Others are more stable. By identifying those trends, we simply increase our probability of success. Stocks like NFLX, GOOG, FB etc. work better as calendars. 

Once we identified the trend, we can play with different parameters, like when to enter, which deltas to use, what is the optimal profit target etc. I don't know what would be the results without backtesting, but I'm pretty sure they would be worse.

Why not 20 occurrences? Well, first, it is not practical. If you look at charts produced by some of our members, you won't see much if they included 20 lines. It would be too busy. Second, I think that for most stocks, the last 4-8 cycles are the most relevant. Patterns change, some stocks become more volatile, some less, and what worked 4-5 years ago, might not work today. But the most recent data is the most relevant.

TradeMachine is just another tool that helps us to fine tune our strategies and find new opportunities (like the FB condor we did).

Share this post


Link to post
Share on other sites
42 minutes ago, TheJersus said:

I'm not suggesting anything is sleazy, I'm sure it's a great tool. I'm just trying to understand how it works and how it is applied. The sum total of my knowledge on this product is a brief fast paced webinar. I also understand the purpose of the webinar was to demo features, not be a training session on back testing methodology. So, I would like to understand how it is applied to real trading. I also acknowledge I have more background in other areas of investment and as a newbie I'm open to learning what does and does not apply to the world of options. So, a few options newbie questions:

1. A key principle of back-testing/fitting is the concept of out of sample testing: Pick a point in time, say 2010 and develop your rules/system using only the data that was available a that time (the sample data). Then, walk it forward from 2011 to present to see how it would have performed (the testing data). Not splitting the data in some fashion is almost a guarantee of fantastic results. So, does the software (or how it is generally applied) test in-sample or out-of-sample? In the webinar, I only saw in-sample which prompted the original post. (Systematic Trading by Robert Carver provides a great discussion of over fitting).

2. For a strategy to be considered robust, it generally should work across a markets and time frames. If I am developing a trend following system for futures and it only works for soybeans over the past nine months, I probably don't have much of a strategy. Unless, of course, there is a thesis to go with it: e.g. identification of something that changed in only the soybean market nine months ago. So, I would like to understand how looking at the behavior of an individual stock over a relatively short sample period translates to a robust enduring strategy. How do we know we are not being fooled be randomness? 

3. In another post in this thread you stated a win rate as evidence the tool works. Great, but I would like to know more to really know the effectiveness of the tool. What is the win rate for the base strategies without application of the back tester? More importantly, how much did the back tester increase profit for winners and/or decrease the losses on the losers?

4. You also stated in another response that as a practical matter you can't look at "...even 20 occurrences". Why not? How can there be confidence in any back test with a tiny sample size. I would just like to understand this one.

Thanks 

 

 

 

So, thanks for all your feedback. You have put a lot of thought into your response.

 

I'm not here to answer all of your questions, which can be addressed rather directly. But, one broad response should do the trick.

 

Options trade in cycles -- that is to say, volatility trades in cycles, and option trading is volatility trading, whether you mean it to be or not. This is not a model fitting software, this is a back-tester and the two are radically different.

 

In model creation we now know that more data is better (this was not obvious before, and in the early days neural nets were widely dismissed). My professor at Stanford, now widely accepted as one of the great minds in AI (Andrew Ng) did not like Neural Nets back in 2006.

 

Specifically in back-testing options (vol cycles), more data is worse. We don't care how a trade did out of this vol cycle, nor do we care how it will do in a year. We care that if we hold a hypothesis that for the next week volatility will behave more or less as it has in the last 2 years (or 3 years, or 1-year), then what trade has worked the best? That's it. The extrapolation is minimal and intended to be so.

 

Models look to extrapolate broadly, option back-tests look to verify in the short-term.

 

The back-tester actually has much more data than we expose, and those that saw the webinar know how to reach it. As a former option market maker on two exchanges and as the finance quant scientist widely recognized as one of the earliest to ever bring neural networks to finance (see SSRN) and institutions with assets over $1 trillion, as well as an open endorsement by the head of Germany's Artificial Intelligence Think Tank, I can tell you that I never use more than 3-years in an option back-test. I find vol cycles outside of the current to be ineffective and in fact spurious.

 

On the other hand, when I built FAM, the equity model designed to work during all times and all cycles (and yes, this model was purchased by MSCI)I used in sample, out of sample, out of universe and then large re-aggregations of different datasets along with several perturbations. That model building was robust and extensive with sensitivity analysis of all sorts. But, it was intended for extrapolation for years -- even decades.

 

This is not a model. This is a back-tester. It is intended to capture vol cycles.

 

I hope that helps.

 

 

Share this post


Link to post
Share on other sites

One of the things I found odd about the Trade Machine was that it didn't differentiate between a straddle and a strangle.  Tried a number of tickers and the results are exactly the same. Its as if they are identical strategies+

Share this post


Link to post
Share on other sites

Kim & Ophir,

Thanks for taking the time to indulge a newbie, I think I'm starting to understand at least a bit of the principles involved. As you were describing 4-8 cycles/more data is worse the concept seemed somewhat analogous to a momentum strategy: stocks that out performed over the past six months have a tendency to outperform over the next six months, not the next six years. So both the option back-testing results and a momentum stock screen are, to borrow a phrase, a wasting asset: the FB trade may or may not work in four years (Sorry, my brain keeps gravitating to things I know). And yes, I see how model fitting is not what we are doing. Time to sign up and give this thing a spin!

 

Share this post


Link to post
Share on other sites

@TheJersus and @cuegis: You are correct, provided the events are independent from one another (like flipping a coin). Although the patterns won't be identical, the way a stock trades in a particular year, is not independent from how it will trade the next year. When we calculate an average RV, for example, we don't need 1000 earnings cycles worth of data for it to be useful.

Share this post


Link to post
Share on other sites

With regard to you most recent "Discover" backtest involving the SPY.

The results that you are showing have produced 23 wins and 4 losses, with a total return of 166%.

I was not sure how long the testing period was, then found that it was 2 years.

Then, I left everything the same , and ran it for 3 years.

The results were 21 win/ 18 losses, with a total loss of 21%.

A sound strategy, that is profitable, should be profitable over the long run.

Sometimes less profitable, and sometimes more profitable.

But, it is not a sound strategy if just 1 additional year can turn it from a complete winner to a 50/50 trade. (53% winners), producing a loss of 20% over a 3 year period.

It would make more sense, as a potentially profitable approach, if adding a 3rd year lookback, might have lowered the returns from 166% to 80% for example.

That would mean it was HALF as  profitable by adding the 3rd year.

But, it is unacceptable, for 1 more year to turn it from total winner, to 50/50 loser.

That is way too big of a change.

Share this post


Link to post
Share on other sites
6 minutes ago, NikTam said:

@cuegis just curious if you went into settings and ran it for 4 or 5 years if the losing trend would persist.  

Are you sure they is a way to go back more than 3 years? I looked in settings and the closest thing I could find was the ability to put in your own dates.

But, I thought the machine was limited to 3 years 

Share this post


Link to post
Share on other sites
4 hours ago, cuegis said:

Are you sure they is a way to go back more than 3 years? I looked in settings and the closest thing I could find was the ability to put in your own dates.

But, I thought the machine was limited to 3 years 

They've added more data now back to the start of 2012.  You just have to enter an earlier start date in the settings.

Share this post


Link to post
Share on other sites
17 hours ago, Darcy MacDonald said:

They've added more data now back to the start of 2012.  You just have to enter an earlier start date in the settings.

Yes, you are right. I took the backtest from the "Discover " article and ran it for 3, 4, and 5 years. It does go back 5 years.

Their article is based on a 2 year look back and has it with 11 wins and 1 loss, and 200+% total return.

Looking back 3 years turns it into a 20% loss with 50/50 win/loss

These are the results from 4 years ,and 5 years.....

https://tm3.cmlviz.com/index.php      it turns back to just above break even

https://tm3.cmlviz.com/index.php      it becomes profitable again, but still 50/50 win/loss

 

I just tried going back 6 years and got more data....

https://tm3.cmlviz.com/index.php

Edited by cuegis

Share this post


Link to post
Share on other sites
2 minutes ago, NikTam said:

Thanks, @cuegis   But when I click on these links it just takes me to Trade Machine opening page -- not a results page.

I just copied the address bar from my results pages, which has always worked in the past. Why don't you try using the link from the "Discover Tab" article on the "SPY" strategy, and then , first look at the results, then hit the 3 year lookback button, then go into settings, and then go back to a 2013, 2012, and 2011 starting year

Share this post


Link to post
Share on other sites

I tweaked the SPY trade idea from CML and thought I would post the results:

http://tm.cmlviz.com/index.php?share_key=20170918163931_WJZF114ckNKoXhQd

Looks like if you change the iron condor to 30/20, and close on gains above 50%, take out closing losses, and open next trade immediately, you get 170% gain for 1 yr, 272% gain for 2 yrs, and 159% gain for 3 years. 

Share this post


Link to post
Share on other sites

 

@Ophir Gottlieb I am trying to back test this NFLX idea on Trade Machine -  I thought Calendar was an available strategy but not seeing it.  So we have to build it as a custom earnings strategy?  Have you covered this elsewhere -- please advise -- thanks!

I see a 30 DTE Put Cal under Custom-beta -- is that it?  I get error message when I try to run it...it does run at 6mo and 1 yr. 

 

Share this post


Link to post
Share on other sites
1 hour ago, NikTam said:

Yes, but this is pretty much the outcome I would expect from this strategy on the SPY.

It has a lot of losses, even though the total gain is a high number.

49/22 is not a trade I would get involved in because I know myself and I would not be happy with such a large number of losses, no matter what the outcome.

I want to see % at least higher than 80-85

Share this post


Link to post
Share on other sites
Guest iqbal Singh

Hello, 

 

I have been using CML-Trade Machine and have become a heavy use of it.  Like it love. I hope it improves my options profitability. while testing Proscan, Ai m noticing some issues.  
 
Example: 
AZO and ADBE post earnings 21 day Iron Condors that  Ophir recently published are not showing up in the ProSCAN fro that strategy. THAT IS very strange. I have spent an hour trying to figure it out. And there are other. 
 
How do we report these kinds of issues? Anomalies like these cause loss of trust in the system and worry of loosing money on other trades. I will like to contribute to enhancements of the system, 
 
Iqbal Singh 

 

Share this post


Link to post
Share on other sites
4 hours ago, Guest iqbal Singh said:

 

 
How do we report these kinds of issues? Anomalies like these cause loss of trust in the system and worry of loosing money on other trades. I will like to contribute to enhancements of the system, 
 

 

 

 

Try: support@cmlviz.com 

 

Share this post


Link to post
Share on other sites

I signed up yesterday and believe that this is a great tool to mine interesting options trading ideas. I watched a few of the very well made training videos and wanted to try one by myself.

It is the AMZN 6 days pre earning. volatility scalp. Here is what I get when I do a scan of the ticker and then back test the idea with default settings.

AMZN: qa Long Short Straddle2
Expiration:      Custom
Risked: $6073 
Total Return: $2825 
% Return:46.5%
Commissions:  $20
% Wins:100%
Wins: 4Losses: 0
Gain: $2825 Loss: -

Great results.

However, now if I set the execution at halfway prices to account for some slippage, suddenly it doesn't look that invincible.

AMZN: qa Long Short Straddle2
Expiration:      Custom
Risked: $1430 
Total Return: $206 
% Return:14.4%
Commissions:  $4
% Wins:75%
Wins: 3Losses: 1
Gain: $221Loss: ‑$15

In fact, one of the winners became losers. I find this is true for many of the scans. They are profitable in a very narrow range. Is that what others noticed too?

Thank you.

 

 

 

Share this post


Link to post
Share on other sites

I'm sure I have seen this but now I don't remember and I can't find it,

Please can somebody explain how to calculate amount of gain or loss, what is the value used on the CMLvis to apply the 40%, margin used on the trade? or how much was paid to enter the trade, or max. lost?

Thanks

 

Close Trade When
Gains Above 40  %
Losses Above 40 %

 

Share this post


Link to post
Share on other sites

@Ophir Gottlieb  I so very badly want to become a subscriber, but I once blew up an account after (not knowing at the time) curve fitting a strategy on tradestation.  Do you offer any tutorials or videos to help prevent this when using your program?

Also, do I need a pc to run the program, or will any tablet or mobile device work?

 

Share this post


Link to post
Share on other sites

Hi @Ophir Gottlieb. Not sure if this thread is still monitored as it has been inactive for 1 month. I am a happy subscriber and find TM extremely beneficial and a good complement to the SO trades on this site. I think, however it would be of great benefit to address the Calendar Days / Trading Days issue. I have just looked at your latest trade discovery email (Analog Devices). Throughout your commentary you go out of your way to stress that the trade should be entered 5 Trading Days before earnings, which is fine.

The issue is that when I run a backtest, it is calculated using Calendar Days. For example over 3 years of the ADI backtest, of the 12 trades 4 were closed early; 4 ran for the full 5 Trading Days; and 4 only ran for 3 Trading Days due to weekends. I am concerned that the results from the backtests are simply inaccurate. Now the real results may be better or worse, but it would be very good to be able test the inputs that are meant to be tested rather than having to waste an inordinate amount of time manually recreating this.

IMO I see no benefit in counting weekends in testing. Are there any plans to address this, or even to offer a choice between using Calendar Days or Trading Days when setting test parameters?

Thanks in advance.

 

Share this post


Link to post
Share on other sites
On 4/14/2017 at 12:27 PM, Kim said:

Before ever entering a trade, we need a plan. For example, we want to know whether we should avoid earnings, or trade with earnings. Knowing where to place a stop loss, and even a limit gain. Knowing which strike to trade. Knowing whether to trade the monthly or weekly options.

But it even goes further – even if we know which direction we think the stock will go – do we sell puts or sell a put spread? Do we buy calls or a call spread? Should we be net owners or sellers of volatility? Has there been measurable edge in the trade in the past, or not?

This is how people profit from the option market — it’s preparation, not luck.

All of these questions were designed to be answered with the CMLviz Trade Machine, which is an option back-tester created by Capital Market Laboratories (CML). I have been in the same circle as this company’s founder for years.

CML is in fact a member of the famed Thomson First Call roster. Their research sits side-by-side with Goldman Sachs, Morgan Stanley, Barclays and the rest of the bulge bracket banks, but they have a different goal: To break the information asymmetry that exists between the top 0.1% and the rest.

To learn more about the product, you can tap on the link below. You will see a 4- minute video demonstration. I think, for many of you, it will become a valuable tool to supplement your trading and the analysis that Steady Options provides.

Tap Here to Watch the Video and Sign Up

P.S. Our members know that I rarely promote other products. But this one really got me excited. I encourage you to give it a try. They plan tons of additional functionality in the upcoming months, including custom strategies to trade around earnings which can be a great benefit for us.

 

CMLviz Trade Machine is constantly adding new features, and the price will be increasing as new features are added. Those who sign up are grandfathered at the price they signed up even as the prices increase.

@Kim,

I just switched my monthly subscription to the yearly bundle for free ONE access... that's too good to pass up.

I just signed up for a new IB account.

I'm also very interested in CMLviz Trade Machine... and Optionslam, and... I'm more than a little overwhelmed!

Do you (or any of the other Senior members) have a recommendation for how to ingest these various services and tools in a systematic fashion?  To a beginner, it appears many have at least some over-lapping functionality.  Is there one to start and get comfortable with first, or is there a symbiotic combination that you recommend?

 

Share this post


Link to post
Share on other sites

Hey is anyone still using CMLviz Trade Machine. I just started using it.

  I have working on Buying and Selling Volatilty skew they have been talking about.   I have been working on developing a stock scan that can work well with this setup.

One of the problems they use pretty tight stops to take full advantage of the volatility. Does anyone know if there is a way to automate some of the trades CMLviz recomends

after a position has been moved past the target,  They also seem to base most of there trades on end of the day price.  For people who use TradeMachine do you feel waiting to end of the day helps ? My stock screen has shown some good results using backtesting  but that depends on getting the good fills that the backtest seens t

to be getting. Anyone using TradeMachine can PM me just reply to the board with thoughts on how to automate some of the trades  recommended in selling volatility skew

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account. It's easy and free!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now

  • Similar Content

    • By Ophir Gottlieb
      How to Profit from Trading Options in Autodesk Inc Right After Earnings
       


      Date Published: 2017-05-18 
      Written by Ophir Gottlieb 

      LEDE 
      While Autodesk Inc (NASDAQ:ADSK) just crushed earnings again, sending shares soaring in the after hours trade, one option trade after earnings has been a consistent winner. It takes no earnings risk, little stock direction risk and over the last year has never lost while returning over 160% annualized returns. 

      The Trade After the Excitement 
      While most of the focus is on the actual earnings move for a stock, that's the distraction when it comes to the option market. For Autodesk Inc, irrespective of whether the earnings move was up or down, if we waited one-day after the stock move from earnings, and then sold an out of the money put spread, the results were very strong. 

      We can examine this, objectively, with a custom option back-test. Here is our earnings set-up: 
       


      Rules 
      * Open short put spread 1 day after earnings 
      * Close short put spread 29 days later 
      * Use the option that is closest to but greater than 30-days away from expiration 

      Here are the results over the last year: 
       


      That's a 47.3% return, with 4 winning trades and 0 losing trades. The total holding period was less than 4 full months, meaning the annualized return was over 160%. No earnings risk was taken -- this is not a coin flip over earnings. 

      The Logic 
      This strategy works beautifully in many companies where heavy stock volume follows the earnings release. The logic behind this trade follows a narrative that even after a bad earnings release, if we wait a day after, we find the stock at a point of equilibrium. 

      If it gapped down -- that gap is over. If it beat earnings, the downside move is already likely muted. Here's how this strategy has done over the last 6-months: 
       


      That's a 21.3% return, on 2 winning trades and 0 losing trades. Since this is a total of a two-month holding period, that 21.3% is actually over 120% annualized. 

      If you're curious, yes, this also produced positive returns over the last 3-years. Here are those results. 
       


      Now we can find some comfort in this approach where is shows 9 winning trades and just 2 losing trades over the last three-years. 

      WHAT HAPPENED 
      There are patterns to stock behaviors before and after earnings and those patterns reveal opportunities in the option market, without taking the actual risk of earnings. You can find them, stock by stock, Apple, Google, Netflix and of course Autodesk Inc are just a handful of examples. There has been edge here with this strategy. 

      To see how to do this for any stock and for any strategy with just the click of a few buttons, we welcome you to watch this quick demonstration video: 
      Tap Here to See the Tools at Work 

      Thanks for reading. 

      Risk Disclosure 
      You should read the Characteristics and Risks of Standardized Options. 

      Past performance is not an indication of future results. 

      Trading futures and options involves the risk of loss. Please consider carefully whether futures or options are appropriate to your financial situation. Only risk capital should be used when trading futures or options. Investors could lose more than their initial investment. 

      Past results are not necessarily indicative of future results. The risk of loss in trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition. 

      The author has no position in Autodesk Inc (NASDAQ:ADSK) as of this writing. 

      Back-test Link
       
       
       
       
       
  • Recently Browsing   0 members

    No registered users viewing this page.

×