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Kim

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This is an excellent question and very well covered by @cuegis response.   Let me just add the observation that delta is often used as a predictive factor in choosing an option position.  The higher the delta, the higher probability that the option strike price will be met.   Correct @cuegis?

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14 minutes ago, NikTam said:

This is an excellent question and very well covered by @cuegis response.   Let me just add the observation that delta is often used as a predictive factor in choosing an option position.  The higher the delta, the higher probability that the option strike price will be met.   Correct @cuegis?

That's right. The delta is also widely considered to be the probability that the option will end up in the money.

Which also means that selling the option is the probability of the option expiring worthless..

Some people also believe that if you double the delta number, that will give you the probability that the price will "touch" the strike at some point during it's lifetime.

I left out the whole concept of gamma,and how delta is different for each consecutive $1 move in the same direction of the underlying.

I didn't want to confuse him too much.

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Guest Loving My Subscription
On Saturday, April 15, 2017 at 0:04 PM, Ophir Gottlieb said:

Hi Bam,

The $49 / mo is actually the promotional price. The price will go up to $99/mo (likely) once we add stock technical studies, custom strategies etc.. But anyone that signs up now does get all upgrades for the same price.

 

 

I subscribed to the trade machine. The best $49 I ever spent. I'm up 150% in one month. I started with 6480 and I'm sitting at  16,313.00. To say it works well is an under statement.

I'm a very happy customer. 

Tropical Girl

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14 hours ago, Guest Loving My Subscription said:

I subscribed to the trade machine. The best $49 I ever spent. I'm up 150% in one month. I started with 6480 and I'm sitting at  16,313.00. To say it works well is an under statement.

I'm a very happy customer. 

Tropical Girl

 

That is great news! We hope to improve everyone's trading and much like Kim, we don't hand you a fish, we teach you to fish for yourself.

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1 hour ago, Ophir Gottlieb said:

 

That is great news! We hope to improve everyone's trading and much like Kim, we don't hand you a fish, we teach you to fish for yourself.

I haven't tried the trial yet, but is there or will there be a sorted list of most profitable back tests?

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16 hours ago, Guest Loving My Subscription said:

I subscribed to the trade machine. The best $49 I ever spent. I'm up 150% in one month. I started with 6480 and I'm sitting at  16,313.00. To say it works well is an under statement.

I'm a very happy customer. 

Tropical Girl

150 % in 1 month ??   willing to share some trades you took ?

Edited by 4REAL

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3 minutes ago, Edwin said:

I haven't tried the trial yet, but is there or will there be a sorted list of most profitable back tests?

 

We post 3-10 trade setups a week which get our members thinking about various ways to approach a trade. You can see it explicitly here (again, not advice, just getting the wheels turning).

http://bit.ly/TM_returns

 

PORTFOLIO RETURNS
 
# Wins # Losses Win % Average
Return
Median
Return
27 9 75% 45% 14.5%

 

 

 

Published Ticker Custom Earnings Description Frequency Return (%) Back-test Link
6/2/17 FB Yes Custom Earnings + Covered Call Monthly Not Triggered Yet Link
6/1/17 AVGO Yes Custom Earnings + Short Put Spread Monthly Not Triggered Yet Link
5/30/17 JPM Yes Custom Earnings + Short Put Spread + Stop Monthly Not Triggered Yet Link
5/25/17 ULTA Yes Custom Earnings + Short Put Spread + Stop Monthly 8.8 Link
5/23/17 V Yes Custom Earnings + Short Put Spread Monthly Not Triggered Yet Link
5/23/17 GS Yes Custom Earnings + Short Put Spread Monthly Not Triggered Yet Link
5/18/17 ADSK Yes Custom Earnings + Short Put Spread Monthly 14.2 Link
5/16/17 BABA - Short Put Spread + Avoid Earnings Monthly -3.7 Link
5/15/17 AVGO Yes Custom Earnings + Long Straddle Monthly 3.3 Link
5/11/17 REGN Yes Custom Earnings + Long Straddle One Week Not Triggered Yet Link
5/10/17 GPRO Yes Custom Earnings + Long Straddle One Week Not Triggered Yet Link
5/9/17 NVDA Yes Custom Earnings + Long Condor Monthly 87.4 Link
5/9/17 NFLX Yes Custom Earnings + Short Put Spread Monthly Not Triggered Yet Link
5/8/17 TWTR Yes Custom Earnings + Short Put Spread Monthly Not Triggered Yet Link
5/5/17 AMBA Yes Custom Earnings + Short Put Spread Monthly Not Triggered Yet Link
5/5/17 KO Yes Custom Earnings + Short Put Spread Monthly Not Triggered Yet Link
5/4/17 INTC Yes Custom Earnings + Long Straddle One Week Not Triggered Yet Link
5/4/17 FB Yes Custom Earnings + Short Put Spread Monthly Not Triggered Yet Link
5/3/17 TSLA Yes Custom Earnings + Short Put Spread Monthly Not Triggered Yet Link
5/2/17 AAPL Yes Custom Earnings + Long Straddle One Week Not Triggered Yet Link
5/2/17 TWTR Yes Custom Earnings + Long Straddle One Week Not Triggered Yet Link
5/1/17 AAPL Yes Custom Earnings + Long Strangle Monthly 59.9 Link
4/27/17 GOOGL Yes Custom Earnings + Long Straddle One Week Not Triggered Yet Link
4/26/17 SBUX - Short Put Spread + Avoid Earnings Monthly 3.2 Link
4/24/17 AAPL - Long Iron Condor + Avoid Earnings + Stop Monthly 12.1 Link
4/20/17 TSLA - Short Put Spread + Avoid Earnings + Stop Every Two-Months Not Triggered Yet Link
4/19/17 MS - Long Strangle + Avoid Earnings Monthly -97.9 Link
4/17/17 BABA - Long Risk Reversal + Avoid Earnings + Stop Every Two-Weeks 19 Link
4/12/17 NVDA - Long Iron Condor + Avoid Earnings Monthly 122.2 Link
4/7/17 AMZN - Long Iron Condor + Avoid Earnings Monthly 51.1 Link
4/4/17 JPM - Short Puts Monthly -5.1 Link
4/3/17 DAL - Short Puts Monthly 14.7 Link
3/29/17 GOOGL - Short Put Spread + Stop Monthly 33.8 Link
3/28/17 VEEV - Short Put Spread Monthly 51.8 Link
3/27/17 IBM - Short Put Spread + Avoid Earnings Weekly -60.1 Link
3/22/17 ANET - Short Put Spread + Stop Monthly 31.6 Link
3/22/17 AMD - Short Put + Stops + Limits Monthly -40.2 Link
3/21/17 HP - Short Put + Avoid Earnings + Stop Monthly 1.1 Link
3/20/17 DIS - Short Put + Avoid Earnings + Stop Weekly 2.3 Link
3/20/17 AMZN - Short Put Spread + Stop Weekly 28.7 Link
3/17/17 ULTA - Short Put + Avoid Earnings + Stop Every Two-Weeks -4.8 Link
3/16/17 ORCL - Short Put Spread + Avoid Earnings Monthly Not Triggered Yet Link
3/15/17 SWKS - Short Put + Avoid Earnings Monthly 29.2 Link
3/13/17 NFLX - Short Put Spread + Avoid Earnings + Stop Monthly 65.7 Link
3/12/17 TSLA (closed) - Long Call + Avoid Earnngs + Stop Weekly 968.9 Link
3/8/17 ADBE - Short Put + Avoid Earnings Weekly 17.2 Link
3/6/17 AMGN - Covered Call + Avoid Earnings Monthly -8.9 Link
3/6/17 AAPL - Covered Call + Avoid Earnings Monthly 7.6 Link
3/6/17 CELG - Short Put + Avoid Earnings + Stop Weekly 6.7 Link
3/2/17 BAC - Short Put + Avoid Earnings Every Two-Weeks -8.7 Link
2/27/17 GLD - Short Put Spread + Stop Every Two-Weeks 34.8 Link
2/21/17 V - Short Put Spread Every Two-Weeks 119.7 Link
2/20/17 MSFT - Short Put + Stop Every Two-Weeks 26.3 Link
2/15/17 VXX - Short Call Spread + Stop Every Two-Weeks -5.2 Link
2/13/17 QQQ - Short Put + Stop Monthly 20.6 Link

 

 

 

 

 

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On 6/1/2017 at 1:18 PM, cuegis said:

It is just a long delta trade.

Do the exact same backtest but just change 1 thing.....replace long call spread instead of short put spread... much better returns

You are right. Would have also worked better on my recent trade: .

 

On 6/1/2017 at 1:10 PM, ykotowitz said:

An alternative strategy for AVGO is Selling a bear one week put 40/20 delta just before earnings and holding for 2 or 3 days post earnings.

seems to yield over 90% success rate . with average returns of about 20%. Am trying it today. Will report results in a few days.

Sold june 9 235/225 bear put @3.95  on June 1, bought it back @0.15 June 2=60% profit. Wold have been higher, had I pursued Cuegis' strategy.

Thank you

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3 minutes ago, ykotowitz said:

You are right. Would have also worked better on my recent trade: .

 

Sold june 9 235/225 bear put @3.95  on June 1, bought it back @0.15 June 2=60% profit. Wold have been higher, had I pursued Cuegis' strategy.

Thank you

Honestly, I wasn't trying to right off the bat, suggest that the long call spread would be better.

All I did was to first look at what you were actually doing, and what caused the profit, and I narrowed it down to 2 things.

1- Long Deltas

2- The timing of entry and exit.

I could have tried several other things that would create a long delta effect, and then try to add something additional that would increase the profit from the timing aspect.

For example, a Long Delta Butterfly/Iron Butterfly.....like buy 1 - 235 call/ sell 2- 240 calls/ buy -1 - 245 call, with the 1st expiration after earnings.

I havn't checked this one out yet so I don't know how it would perform.

But, my very first reaction was to do the opposite of a short put spread , which is a long call spread, and I was actually very surprised to see that the outcomes were so much better.

Because, if I had to guess, I would have thought they would be pretty equal outcomes.

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13 minutes ago, ykotowitz said:

You are right. Would have also worked better on my recent trade: .

 

Sold june 9 235/225 bear put @3.95  on June 1, bought it back @0.15 June 2=60% profit. Wold have been higher, had I pursued Cuegis' strategy.

Thank you

That is one big profit. Selling the spread for 3.95 and closing it for .15.

I can't imagine how my call spread would have done better than that.

Which call spread are you referring to?

Also, when you say you made a 60% return, how are you arriving at that number?

It looks like a much larger return than 60%

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20 minutes ago, cuegis said:

That is one big profit. Selling the spread for 3.95 and closing it for .15.

I can't imagine how my call spread would have done better than that.

Which call spread are you referring to?

Also, when you say you made a 60% return, how are you arriving at that number?

It looks like a much larger return than 60%

@cuegisCost basis is 1000 width of spread minus 395 credit collected = $605.   Profit of 395-15=$380   380/605=63% gain

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1 hour ago, cuegis said:

That is one big profit. Selling the spread for 3.95 and closing it for .15.

I can't imagine how my call spread would have done better than that.

Which call spread are you referring to?

Also, when you say you made a 60% return, how are you arriving at that number?

It looks like a much larger return than 60%

if I pursued your strategy: B 235/250 call June 1 @4.92. S June 2 @13.54. Much higher profit on lower investment risk.

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27 minutes ago, ykotowitz said:

if I pursued your strategy: B 235/250 call June 1 @4.92. S June 2 @13.54. Much higher profit on lower investment risk.

@ykotowitz-  

Yes, but it is a different trade; for your put spread, it was enough that AVGO staid above 235, for the call spread you (would have) started to profit from 239,92 on.  In hindsight - with AVGO around 252 - the call spread is evidently the better choice, but what if AVGO just had staid around 238/239 

Edited by 4REAL

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5 minutes ago, 4REAL said:

Yes, but it is a different trade; for your put spread, it was enough that AVGO staid above 235, for the call spread you started to profit from 239,92 on.  In hindsight the call spread is evidently the better choice, but what if AVGO just had staid around 238/239

Very good point.  'No free lunch'. Obviously, the risk profile of the two trades is quite different. However, it is interesting that for the past 3 years the call strategy would have yielded much higher returns.

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1 minute ago, ykotowitz said:

Very good point.  'No free lunch'. Obviously, the risk profile of the two trades is quite different. However, it is interesting that for the past 3 years the call strategy would have yielded much higher returns.

what deltas do you use for the call spread, or if you have the CMLviz backtest link  ?

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4 minutes ago, ykotowitz said:

Very good point.  'No free lunch'. Obviously, the risk profile of the two trades is quite different. However, it is interesting that for the past 3 years the call strategy would have yielded much higher returns.

That is what also surprised me. The call spread beat the short put spread, in a big way, in all lookback periods.

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1 minute ago, 4REAL said:

what deltas do you use for the call spread, or if you have the CMLviz backtest link  ?

Good point. We should compare apples to apples. if we use a 40/20 put spread, then compare it to a 40/20 call spread.

But it still isn't the same trade because the long call spread HAS TO have the stock price go up to make the full profit.

The short put spread just has to stay where it is, or go up. It just can't go down to get the full profit.

But, that said, the call spread wins in every lookback period.

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How to Trade Covered Calls in Tesla Inc


 

TSLA_building_2.jpg

 

How to Trade Covered Calls in Tesla Inc

Date Published:  

This article can be watched as a video, below, or read as a dossier below this video: 

 

PREFACE 
A covered call is a common option strategies for owners of a stock, but the fact that it is ubiquitous has also meant a lack of rigor. With relative ease, we can go much further -- to identify the risks we want to take, and those that we don't, to optimize our results. Tesla Inc (NASDAQ:TSLA) is a great example. 

STORY 
Before we get into a real action strategy, we can look at how selling a covered call in Tesla Inc has done over the last two-years, trading monthly options, and how it has failed. 

 

TSLA_nothing_cc_2yrs.PNG



We see a weak 4.8% return and of the 27 times this trade was put on, it only was a winner 15-times, or 55.6% of the time. 

Now we take the first step (of two), to dig out the risk and optimize the returns. Earnings is one of the riskiest events for a stock, so let's see what happens if we always avoid earnings but do the same strategy -- a covered call every month for two-years. 

What we want to impress upon you is how easy this is with the right tools. Just tap the appropriate settings. 

 

cc_setup_ex_earnings.PNG



And here are the results: 
 

TSLA_nothing_exe_cc_both_2yrs.png



We can see the returns have nearly tripled to 13.1% and the win-rate is now up to 68%. But, if we're fair with our analysis, this isn't particularly exciting either. So what next? 
 

Are there better months to sell a covered call than other months?



It turns out that the answer for Tesla Inc is, yes. 

BETTER 
We can test a simple idea: As the earnings date approaches for Tesla Inc, we can try a hypothesis that the stock will neither "go up a lot" nor will "go down a lot" in just that month right before earnings. 

If this is true, then selling a covered call should work very well. Here is how we set it up: 

Rules 
* Sell a covered call 29 days before earnings 
* Close the position one day before earnings 

We note that we are not taking earnings risk, but are closing the covered call before earnings. It's easy to see in the settings: 

 

setup_29_1.png



And now, here the results over the last year: 
 



The return has jumped to 36.9% and the win-rate has jumped to 75%. In the last two-years this has worked six of the last eight times. 

We can also see how this has done over the last year and six-months: 

 



That 15.7% return in the last year came from just 4-months of trading, which is in fact over 60% annualized returns. 

WHAT HAPPENED 
For those that are long Tesla Inc stock, a 36.9% return from just the month before earnings in the last two-years is a serious find. So too is a 15.7% return in just 4-months of trading over the last year. 

To see how to do this for any stock 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. 

Back-test Link

 

 

 

 

 

 

 

 

 

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13 hours ago, Ophir Gottlieb said:

 

How to Trade Covered Calls in Tesla Inc


 

TSLA_building_2.jpg

 

How to Trade Covered Calls in Tesla Inc

Date Published:  

This article can be watched as a video, below, or read as a dossier below this video: 

 

PREFACE 
A covered call is a common option strategies for owners of a stock, but the fact that it is ubiquitous has also meant a lack of rigor. With relative ease, we can go much further -- to identify the risks we want to take, and those that we don't, to optimize our results. Tesla Inc (NASDAQ:TSLA) is a great example. 

STORY 
Before we get into a real action strategy, we can look at how selling a covered call in Tesla Inc has done over the last two-years, trading monthly options, and how it has failed. 

 

TSLA_nothing_cc_2yrs.PNG



We see a weak 4.8% return and of the 27 times this trade was put on, it only was a winner 15-times, or 55.6% of the time. 

Now we take the first step (of two), to dig out the risk and optimize the returns. Earnings is one of the riskiest events for a stock, so let's see what happens if we always avoid earnings but do the same strategy -- a covered call every month for two-years. 

What we want to impress upon you is how easy this is with the right tools. Just tap the appropriate settings. 

 

cc_setup_ex_earnings.PNG



And here are the results: 
 

TSLA_nothing_exe_cc_both_2yrs.png



We can see the returns have nearly tripled to 13.1% and the win-rate is now up to 68%. But, if we're fair with our analysis, this isn't particularly exciting either. So what next? 
 

Are there better months to sell a covered call than other months?



It turns out that the answer for Tesla Inc is, yes. 

BETTER 
We can test a simple idea: As the earnings date approaches for Tesla Inc, we can try a hypothesis that the stock will neither "go up a lot" nor will "go down a lot" in just that month right before earnings. 

If this is true, then selling a covered call should work very well. Here is how we set it up: 

Rules 
* Sell a covered call 29 days before earnings 
* Close the position one day before earnings 

We note that we are not taking earnings risk, but are closing the covered call before earnings. It's easy to see in the settings: 

 

setup_29_1.png



And now, here the results over the last year: 
 



The return has jumped to 36.9% and the win-rate has jumped to 75%. In the last two-years this has worked six of the last eight times. 

We can also see how this has done over the last year and six-months: 

 



That 15.7% return in the last year came from just 4-months of trading, which is in fact over 60% annualized returns. 

WHAT HAPPENED 
For those that are long Tesla Inc stock, a 36.9% return from just the month before earnings in the last two-years is a serious find. So too is a 15.7% return in just 4-months of trading over the last year. 

To see how to do this for any stock 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. 

Back-test Link

 

 

 

 

 

 

 

 

 

I certainly can't argue with the results. But, with regard to the 3rd alteration you made....selling the call 29 days before, and buying it back, the day before earnings.

Just logically, on it's face, you would be selling the call at a lower IV, and buying it back right at the point of it's highest IV.

Your results are true, but, my statement is true also.

How can I make sense of them both being true?

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13 minutes ago, cuegis said:

I certainly can't argue with the results. But, with regard to the 3rd alteration you made....selling the call 29 days before, and buying it back, the day before earnings.

Just logically, on it's face, you would be selling the call at a lower IV, and buying it back right at the point of it's highest IV.

Your results are true, but, my statement is true also.

How can I make sense of them both being true?

@cuegisTSLA IV certainly increases, but with TSLA, theta decay typically outpaces the IV increase.  Look at our RV charts for TSLA, the straddle RV typically goes down as earnings date approaches (a sign of theta outpacing IV).  This is also why TSLA pre-earnings calendars have typically been very good performers (take a look at all the TSLA calendars in the Peformance tab over the last few years).   While this backtest has positive results, I'm sure that a pre-earnings calendar backtest for TSLA will show even better results based on our actual calendar trades over the last few years (once the calendar trades are fully supported in the tool).

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4 minutes ago, Yowster said:

@cuegisTSLA IV certainly increases, but with TSLA, theta decay typically outpaces the IV increase.  Look at our RV charts for TSLA, the straddle RV typically goes down as earnings date approaches (a sign of theta outpacing IV).  This is also why TSLA pre-earnings calendars have typically been very good performers (take a look at all the TSLA calendars in the Peformance tab over the last few years).   While this backtest has positive results, I'm sure that a pre-earnings calendar backtest for TSLA will show even better results based on our actual calendar trades over the last few years (once the calendar trades are fully supported in the tool).

Yes, I really can't wait for all of the additional tools to come out.

TSLA calendars certainly will show great results, and hopefully the backtesting might help us find a small tweak to make it even better.

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@cuegisYes, agreed... That being said, I think I found a big problem while looking at the detailed trade data..

 

@Ophir GottliebFor your just published TSLA covered call backtest, the trade data does not match your open close criteria.   I noticed this when I saw little value in the TSLA options being closed which didn't look correct given that earnings is supposedly 1 day away.   The earnings dates in the tool are way off compared to the actual earnings date.  The following data shows the actual TSLA earnings date and the trade closing date in the tool (supposed to be 1 day before earnings):

8/5/15 - 7/1/15, 11/3/15 - 10/1/15, 2/10/16 - 1/1/16, 5/4/16 - 4/1/16, 8/3/16 - 7/4/16, 10/26/16 - 9/30/16, 2/22/17 - 1/2/17, 5/3/17 - 3/31/17.

 

So, the tool appears to backtest a trade opened approx 2 months prior to earnings and closes it one month prior to earnings - not the 29 days prior and 1 day prior as specified in the trade criteria.  This is a big deal because the short call uses options that expire prior to earnings as opposed to options that would expire after earnings (which would be the case when closing the trade 1 day before earnings).

 

Also, another question, the tool had a few odd closing dates - Jan 1, and July 4.   How could these be closing dates when they are holidays where the market is closed???

                         

Edited by Yowster

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3 minutes ago, Yowster said:

@cuegisYes, agreed... That being said, I think I found a big problem while looking at the detailed trade data..

 

@Ophir GottliebFor your just published TSLA covered call backtest, the trade data does not match your open close criteria.   I noticed this when I saw little value in the TSLA options being closed which didn't look correct given that earnings is supposedly 1 day away.   The earnings dates in the tool are way off compared to the actual earnings date:

The following data shows the actual TSLA earnings date and the trade closing date in the tool (supposed to be 1 day before earnings)

8/5/15 - 7/1/15, 11/3/15 - 10/1/15, 2/10/16 - 1/1/16, 5/4/16 - 4/1/16, 8/3/16 - 7/4/16, 10/26/16 - 9/30/16, 2/22/17 - 1/2/17, 5/3/17 - 3/31/17.

So, the tool appears to backtest a trade opened approx 2 months prior to earnings and closes it one month prior to earnings - not the 29 days prior and 1 day prior as specified in the trade criteria.  This is a big deal because the short call uses options that expire prior to earnings as opposed to options that would expire after earnings )which would be the case when closing the trade 1 day before earnings).

Also, another question, the tool had a few odd closing dates - Jan 1, and July 4.   How could these be closing dates when they are holidays when the market is closed???

                         

 

It looks like we using Tesla's quarterly announcement for unit sales as earnings, not the earnings date. I think this is correct.

 

Also, can you share he back-test link so we can look at the jan 1 issue?

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Just now, Ophir Gottlieb said:

 

It looks like we using Tesla's quarterly announcement for unit sales as earnings, not the earnings date. I think this is correct.

 

Also, can you share he back-test link so we can look at the jan 1 issue?

@Ophir GottliebIt's the backtest link that you included at the bottom of your TSLA backtest writeup.

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Hello All,

 

We will be releasing (finally), custom strategies and multi-ticker back-tests this Sunday night.

 

These added features will be rolled into what we will call CML Trade Machine Premium and it will cost $99 / mo.

 

The current version will still be $49/mo and both products get all the TM insights / set-ups. We are not taking anything away from the current version, we are creating a premium version with new features.

 

Just wanted everyone to know so there are no surprises.

 

My very best,

Ophir

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My 2 cents...  I would hope that calendars would be considered a basic trade type that is supported by the current version of the tool.   I think everyone here would agree that calendars are fundamental options trades - just like call/put verticals and straddles/strangles.   I can understand the need for a premium version for some more elaborate custom trade setups, but a calendar is a basic options trade that should be supported in the base version of the tool.

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1 hour ago, Yowster said:

My 2 cents...  I would hope that calendars would be considered a basic trade type that is supported by the current version of the tool.   I think everyone here would agree that calendars are fundamental options trades - just like call/put verticals and straddles/strangles.   I can understand the need for a premium version for some more elaborate custom trade setups, but a calendar is a basic options trade that should be supported in the base version of the tool.

 

The current version does not do calendars, but the custom version will. You can sign up now for $49 and will automatically get upgraded to the Premium version when we release it, but once we do release it, if you are not a member, it will be $99. 

 

As always, you cancel at any time.

 

For Steady Option members, the sign up page is here:

 

https://cmlviz.com/register/cml-trademachine-49-mo-promotion-so/

 

 

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2 hours ago, NikTam said:

Can we backtest  calendars (and calendars with strangles) with current version?  

 

The current version does not do calendars, but the custom version will. You can sign up now for $49 and will automatically get upgraded to the Premium version when we release it, but once we do release it, if you are not a member, it will be $99. 

 

As always, you cancel at any time.

 

For Steady Option members, the sign up page is here:

 

https://cmlviz.com/register/cml-trademachine-49-mo-promotion-so/

 

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@Ophir GottliebSo when you say "You can sign up now for $49 and will automatically get upgraded to the Premium version when we release it", does that mean if Steady Options members are already signed up for the $49 rate they will get the Premium version for the same $49 per month?   If that is the case, it certainly didn't sound that way in your initial post regarding the premium version.

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37 minutes ago, Ophir Gottlieb said:

 

The current version does not do calendars, but the custom version will. You can sign up now for $49 and will automatically get upgraded to the Premium version when we release it, but once we do release it, if you are not a member, it will be $99. 

 

As always, you cancel at any time.

 

For Steady Option members, the sign up page is here:

 

https://cmlviz.com/register/cml-trademachine-49-mo-promotion-so/

 

 

Glad to hear that this.  I just signed up earlier this week and I'll want to take advantage of backtesting calendars once that feature is released.

Edited by bigbreak

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ophir

I am considering testing this software. Looks very powerful and handy as it is. My question is most people are asking for the ability to test calendars and I think this is important but what about other structures flies,condors, diagnols and so forth are any of these a possibilities?

 

Thanks 

Bret

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2 hours ago, bam1960 said:

ophir

I am considering testing this software. Looks very powerful and handy as it is. My question is most people are asking for the ability to test calendars and I think this is important but what about other structures flies,condors, diagnols and so forth are any of these a possibilities?

 

Thanks 

Bret

Hi Bret,

 

We are adding custom strategies, so you can create whatever you like up to 4-legs. It doesn't even have to be a standard strategy, 4-legs, however you like them. 

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We sell options expiring the same week as earnings (after earnings) and buy options 1-3 weeks out, depending on liquidity. For most stocks, the long will be the next monthly expiration due to better liquidity, but there are exceptions.

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3 minutes ago, Kim said:

We sell options expiring the same week as earnings (after earnings) and buy options 1-3 weeks out, depending on liquidity. For most stocks, the long will be the next monthly expiration due to better liquidity, but there are exceptions.

 

1. So you sell the weekly options in the week of earnings, and let earnings happen, then close at expiration.

2. You own the back week (or whenever) and also hold through earnings

3. You close both legs at the same time.

 

Is that right?

Edited by Ophir Gottlieb

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3 minutes ago, Ophir Gottlieb said:

 

1. So you sell the weekly options before earnings, and let earnings happen, then close at expiration.

2. You own the back week (or whenever) and also hold through earnings

3. You close both legs at the same time.

 

Is that right?

No

1 Sell expiry rite after earnings (same week)

2 Buy 1-3 weeks out usually monthly for liquidity

3 close befor earnings

4 yes close both legs at same time

 

Edited by bam1960

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Just now, bam1960 said:

No

1 Sell expiry rite after earnings (same week)

2 Buy 1-3 weeks out usually monthly for liquidity

3close befor earnings

 

* Let's say earnings are on May 5th.

* Let's say weekly options exist expiring May 7th.

* Let's say May monthlies exist expiring May 20th.

 

The trade is:

Do you do this?

* OPEN: Sell ATM straddle in May 7th weeklies on May 1

* Buy ATM straddle May 20th th monthlies on May 1

* Close both on on May 4th

Is that it?

 

 

 

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1 minute ago, Ophir Gottlieb said:

 

* Let's say earnings are on May 5th.

* Let's say weekly options exist expiring May 7th.

* Let's say May monthlies exist expiring May 20th.

 

The trade is:

Do you do this?

* OPEN: Sell ATM straddle in May 7th weeklies on May 1

* Buy ATM straddle May 20th th monthlies on May 1

* Close both on on May 4th

Is that it?

 

 

 

usually 2 weeks out but yes

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11 minutes ago, Ophir Gottlieb said:

ty, Kim.

The trade is always basically the same but, there are a few things that only happen sometimes.

For example, if the 1st expiration after earnings, is a monthly, depending on liquidity, we might have to do a 4 week (2 monthly) calendar.

Also, we pay attention to the IV differential between the 2 expirations.

If you get a situation where 

1- IV all around is VERY high and

2- The difference between the IV of the 2 expirations is like 90 vs. 45

Then this is a trade that can tolerate a significant move away from ATM and still retain most of their value.

So, in a situation like this , we might be more inclined to put the trade on much more prior to earnings than other, similar calendars.

Edited by cuegis

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@Ophir GottliebAlthough the descriptions here say buying and selling straddles, the reality is for the SO pre-earnings calendar trades we typically buy either the call calendar or the put calendar at/near ATM - which ever is cheaper   For some stocks the calendar prices are the same for puts and calls, but some typically have one cheaper than the other due to pending dividends or something else.   

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Guest Tropical Girl
On Sunday, June 04, 2017 at 4:31 PM, 4REAL said:

150 % in 1 month ??   willing to share some trades you took ?

Shopify 60 10 call spreads made the most. Once you have the trade machine you can experiment with the different deltas to find the best return rate. I traded 30 days options. Nvidia was also a great winner.

You need to do your own due diligence but I know the back tester gives me an edge. 

It's no longer luck.

Tropical Girl

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