CML TradeMachine Trade Ideas

[IgorK]

50 minutes ago, Maji said:

I think the markets are gyrating while waiting for the FOMC meeting outcome.. the announcement is at 2pm on 12/13/2017. 

I am hoping that the markets take off after that... before the so called correction that all the pundits are talking about

Not sure about markets, but I hope ADBE and COST take in the right direction.

Edited December 12, 2017 by IgorK

[NikTam]

ADBE and COST perking up.  I will hold into tomorrow since CML back-testing indicates better results than selling the day before earnings (today).

[Sirion]

COST sold for 3.1, 40% profit target hit. ADBE and ORCL back in the green. MU still looking grim, but not worth the commissions to close. Refraining from adding wood to that one.

[IgorK]

20 hours ago, IgorK said:

 

Added one contract for each position. Now 2.68 for ADBE and 2.35 for COST. Hopefully it recovers.

Sold COST for 3. 26.86% profit.

Sold ADBE one for 2.70, one for 3. Foes at 2.54 on average after accidental day trading.  3.69 profit. may reenter for ADBE.

Thanks guys.

Edited December 13, 2017 by IgorK

[IgorK]

Just now, krisbee said:

No. I'm done with this.  Looking for other opportunities.

Which once?

[siddharth]

1 hour ago, NikTam said:

ADBE and COST perking up.  I will hold into tomorrow since CML back-testing indicates better results than selling the day before earnings (today).

Cost starting up retreat. 

[Sirion]

Closed my second pass at adobe for 40% at 4.00, and it just kept popping. It's around 4.25 now. ORCL is threatening breakeven while MU will have to be saved in earnings. I'd need a pop of like 6% to save breakeven. Ugh.Ah well, win some lose some but it looks like I should have been strict with my stoploss.

[siddharth]

On 11/30/2017 at 7:51 AM, cuegis said:

I also bought bought the $1.50 calls before the breakout because , it was APRIL, you were probably REALLY paying .48 cents of extrinsic value, because they were in the money by .20 cents.

Then I loaded up on April $2 calls, There is SO much time, and it is happening now, in November

With rad delaying earnings  report, are you still holding onto this or is this a warning of bad news. 

[IgorK]

17 minutes ago, Sirion said:

Closed my second pass at adobe for 40% at 4.00, and it just kept popping. It's around 4.25 now. ORCL is threatening breakeven while MU will have to be saved in earnings. I'd need a pop of like 6% to save breakeven. Ugh.Ah well, win some lose some but it looks like I should have been strict with my stoploss.

Looks like I was too eager with ADBE yesterday

[cuegis]

4 minutes ago, siddharth310584 said:

With rad delaying earnings  report, are you still holding onto this or is this a warning of bad news. 

Well, as a general, or pretty absolute, rule, I never hold positions through earnings. And that applies to the mostly delta neutral trading I do.

But, with a directional trade, I would never hold through earnings.

This is a strange one though because of it's unique factors. Namely, that it is .30 cents, expires in april, and is so close to ATM.

I hate to use the word "hope" but, the CML software has shown that it is a common tendency among "certain" stocks, to historically move higher, in the 3,5, or 7 day period leading up to earnings.

Unfortunately, I don't see that coming up on CML as a normal tendency of RAD.

So, I am going to see how it behaves now that we are approaching the period leading up to earnings, and depending on what it does (i.e. IF it were to rally leading up to earnings), I would dump it just before, as I would with anything else.

If it does nothing, I will have to decide as we approach earnings.

Because it has SO much time on it, i might, in this case, hang on to part of it.

But, I want to see what develops ( or not) between now and then.

[Sirion]

5 hours ago, Sirion said:

Closed my second pass at adobe for 40% at 4.00, and it just kept popping. It's around 4.25 now. ORCL is threatening breakeven while MU will have to be saved in earnings. I'd need a pop of like 6% to save breakeven. Ugh.Ah well, win some lose some but it looks like I should have been strict with my stoploss.

ORCL sold for 1.23, 18% gain. Crossing my fingers for MU.

[RyanHo]

FDX  post-earnings Iron Condor looks nice.

http://tm.cmlviz.com/index.php?share_key=20171215031646_qgwfWhyRw281u0lW

[NikTam]

My Pre-Earnings Momentum trades this week were a mixed bag.  I sold ADBE this morning in the first 30 min for a 30% profit.  Very nice. Then I watched COST jump in first few minutes but missed the exit,  After that it was just teeth grinding until the finish when I got out in the final hour with a 15% loss.  COST had great back-testing results -- but past results are no guarantee of future behavior.

[siddharth]

I don't remember who but someone posted that the PE calls were doing much better than the post earnings condors via CML.

[Maji]

Orcl was also a loser!

[IgorK]

Guys, did anyone try this one: http://www.cmlviz.com/cmld3b/index.php?number=11859&app=news&cml_article_id=20171215_alert-the-technical-indicator-that-works-in-zoetis-on-path-to-trigger&source=TM_insights

 

[ykotowitz]

1 hour ago, IgorK said:

Guys, did anyone try this one: http://www.cmlviz.com/cmld3b/index.php?number=11859&app=news&cml_article_id=20171215_alert-the-technical-indicator-that-works-in-zoetis-on-path-to-trigger&source=TM_insights

 

No trigger yet.I think there are at least 2 more days to go.

[IgorK]

16 hours ago, ykotowitz said:

No trigger yet.I think there are at least 2 more days to go.

Thanks.  I see. Had to read it again. 

[zxcv64]

Its been a bit quiet on the CML board of late. I missed out on the pre-earnings trades for some of the biggies this week, but an interesting post-earnings trade is coming up for FDX.

http://www.cmlviz.com/cmld3b/index.php?number=11860&app=news&cml_article_id=20171217_how-to-trade-options-after-earnings-in-fedex-fdx&source=TM_insights

 

It's a IC to be opened 2 days after earnings, and closed 21 days after earnings.The history on this trade looks good with 338% return over the last two years.

 

[akito]

Yup, that one does look to be a good one. I'm planning on trying it out. I think @krisbee had mentioned this one in the FDX trade idea topic.

[IgorK]

12 minutes ago, zxcv64 said:

Its been a bit quiet on the CML board of late. I missed out on the pre-earnings trades for some of the biggies this week, but an interesting post-earnings trade is coming up for FDX.

http://www.cmlviz.com/cmld3b/index.php?number=11860&app=news&cml_article_id=20171217_how-to-trade-options-after-earnings-in-fedex-fdx&source=TM_insights

 

It's a IC to be opened 2 days after earnings, and closed 21 days after earnings.The history on this trade looks good with 338% return over the last two years.

 

 

6 minutes ago, akito said:

Yup, that one does look to be a good one. I'm planning on trying it out. I think @krisbee had mentioned this one in the FDX trade idea topic.

Yes, it was mentioned in FDX topic. Just  caution for guys small accounts:  

 

[cwerner376]

Hi everyone!  It's my first day in SO and my first post, but Ive been using CML Trade Machine for a few months.  I've had a pretty good success using the PE trades, not so much with the TTM squeeze trades.  I'm looking forward to learning and trading with everyone.  Lots of great discussions across the SO forums. 

Concerning the CML 2 day post FDX IC...it looks like IV has dropped pretty sharply to ~ 15%.  Down to levels below the last JAN. and will possibly rise 2-5% over the next 3 weeks.  I have never traded a 3 week IC, I usually us 45-60 day expirations.  When I model the P/L on the shorter IC, the 5% swing has a big impact.  What do you guys think?  BTW I am using Fidelity's IV/HV index comparison, so if you see something different let me know.

[IgorK]

22 minutes ago, cwerner376 said:

Hi everyone!  It's my first day in SO and my first post, but Ive been using CML Trade Machine for a few months.  I've had a pretty good success using the PE trades, not so much with the TTM squeeze trades.  I'm looking forward to learning and trading with everyone.  Lots of great discussions across the SO forums. 

Concerning the CML 2 day post FDX IC...it looks like IV has dropped pretty sharply to ~ 15%.  Down to levels below the last JAN. and will possibly rise 2-5% over the next 3 weeks.  I have never traded a 3 week IC, I usually us 45-60 day expirations.  When I model the P/L on the shorter IC, the 5% swing has a big impact.  What do you guys think?  BTW I am using Fidelity's IV/HV index comparison, so if you see something different let me know.

Kim opened unofficial test IC here. Not sure if it is still possible to get in.

 

[NikTam]

1 hour ago, cwerner376 said:

Hi everyone!  It's my first day in SO and my first post, but Ive been using CML Trade Machine for a few months.  I've had a pretty good success using the PE trades, not so much with the TTM squeeze trades.  I'm looking forward to learning and trading with everyone.  Lots of great discussions across the SO forums. 

Concerning the CML 2 day post FDX IC...it looks like IV has dropped pretty sharply to ~ 15%.  Down to levels below the last JAN. and will possibly rise 2-5% over the next 3 weeks.  I have never traded a 3 week IC, I usually us 45-60 day expirations.  When I model the P/L on the shorter IC, the 5% swing has a big impact.  What do you guys think?  BTW I am using Fidelity's IV/HV index comparison, so if you see something different let me know.

I think your analysis is very pertinent.  I think I will pass on this one.  Three week trades can be excruciating when starting at a disadvantage.  

Edited December 21, 2017 by NikTam

[kirkr1517]

NKE had earnings today.  I looked up an after-earnings play in CML Trade Machine and came up with a trade selling a put spread 2 days after earnings that looks pretty decent.  For a 2 year study it's showing an average 16% return per trade, and 85.7% win rate.  That would be next Tues.

http://tm.cmlviz.com/index.php?share_key=20171222191253_eB1F0dbwOI4vSXDe

[zxcv64]

Kirk, what parameters are you using for the backtest? When I open your link, I get a 45.9% return in three years (opening trade 2 days after earnings, closing 30 days), and the 'Days to expiration' is set at 40.

[kirkr1517]

47 minutes ago, zxcv64 said:

Kirk, what parameters are you using for the backtest? When I open your link, I get a 45.9% return in three years (opening trade 2 days after earnings, closing 30 days), and the 'Days to expiration' is set at 40.

It defaults to 3 years instead of the 2 that I was checking, plus it put in 40 days to expiration.  Also, it's open 2 days after earnings, close 29 days.  Although, 30 days to expiration gives a better return.

Edited December 22, 2017 by kirkr1517
spelling error

[cuegis]

3 hours ago, krisbee said:

http://www.cmlviz.com/cmld3b/index.php?number=11844&app=news&cml_article_id=20171212_xlf-how-to-trade-the-great-financial-rotation-with-options

There is no way he can present this backtest seriously!

I'm looking at his link to this backtest , and although I have not gone through all 254 individual trades.  Just looking at the first 10 trades shows that he is buying the long call for .28, but, more importantly, selling the short call for .02 cents ,TO OPEN!.

Almost the same thing on the next trade, selling the short leg for .08 cents to open.

Either he is not serious , or I am reading the wrong test. But, I am using HIS link, and all of the other numbers coincide with the text of his description.

Do I even need to ask the question? Or, I would hope, it does not need any explanation.

Selling anything for .02, or .08, to open, as part of a position,....to what end?

It is not a hedge. It's purpose is to be the "short leg" of a calendar. Really? .02 cents.?..., .08 cents? Then it goes on, .12 cents, then, once again .02 cents.

It was not a one time mistake, it is done repeatedly . He is selling the short leg , of a calendar, for .02 cents to open, many, many times.

Why not just sell it for .00?

I'm surprised that nobody else has brought this up.

 

I have to add this. I just found several cases where he is selling the short leg for .01 cent to open!

Edited December 22, 2017 by cuegis

[greenspan76]

10 hours ago, krisbee said:

http://www.cmlviz.com/cmld3b/index.php?number=11844&app=news&cml_article_id=20171212_xlf-how-to-trade-the-great-financial-rotation-with-options

 

6 hours ago, cuegis said:

There is no way he can present this backtest seriously!

I'm looking at his link to this backtest , and although I have not gone through all 254 individual trades.  Just looking at the first 10 trades shows that he is buying the long call for .28, but, more importantly, selling the short call for .02 cents ,TO OPEN!.

Almost the same thing on the next trade, selling the short leg for .08 cents to open.

Either he is not serious , or I am reading the wrong test. But, I am using HIS link, and all of the other numbers coincide with the text of his description.

Do I even need to ask the question? Or, I would hope, it does not need any explanation.

Selling anything for .02, or .08, to open, as part of a position,....to what end?

It is not a hedge. It's purpose is to be the "short leg" of a calendar. Really? .02 cents.?..., .08 cents? Then it goes on, .12 cents, then, once again .02 cents.

It was not a one time mistake, it is done repeatedly . He is selling the short leg , of a calendar, for .02 cents to open, many, many times.

Why not just sell it for .00?

I'm surprised that nobody else has brought this up.

 

I have to add this. I just found several cases where he is selling the short leg for .01 cent to open!

Agree completely with cuegis on this one. I saw the XLF blog post the other day, then looked at XLF's price over the last 5 years and the current premiums on weekly calls and instantly knew the trade was a great example of why you have to look at trade details and not just trust the backtest alone. But since I'm not a current CML subscriber and they stopped letting non-subscribers view the trade details of the blog posted backtests, I never actually saw the trade details. I did wonder if there was another longer-term setup that might still produce good results. For example, buy a 180DTE long and sell/roll monthly shorts. In its current form, though, its a solid "pass and don't look back"

[cuegis]

9 hours ago, greenspan76 said:

 

Agree completely with cuegis on this one. I saw the XLF blog post the other day, then looked at XLF's price over the last 5 years and the current premiums on weekly calls and instantly knew the trade was a great example of why you have to look at trade details and not just trust the backtest alone. But since I'm not a current CML subscriber and they stopped letting non-subscribers view the trade details of the blog posted backtests, I never actually saw the trade details. I did wonder if there was another longer-term setup that might still produce good results. For example, buy a 180DTE long and sell/roll monthly shorts. In its current form, though, its a solid "pass and don't look back"

As I looked at more of the 265 trades, I was absolutely amazed that, they were selling the short leg of the calendar , to OPEN, at .01 cent, a significant percentage of the time , to call it part of the "norm" of this strategy.

Even without the fact that it is a majority of the time, that they are selling the short leg for .01 to .03 cents, I personally don't feel that this is a candidate worth considering at all, because, ALL options prices are way too low, all of the time, to make it a viable "calendar type" candidate.

Maybe there is another strategy that would make sense "in reality, not theory", for XLF.

They show what the total return of XLF was, over the same period of time. And This strategy , in a backtest, produced returns, that were approx 10 times greater. So you have to ask "where did those returns come from?"

They didn't come from accumulating .01 cent 256 times.

The only place left is using the "leverage" of the long gamma of options, that created the greater returns. If not, then what did?

The whole advantage , of a calendar, is that the part that you are selling having a reasonable amount of premium, to create a profit.

You are collecting .01-.03 cents, on the short leg, the majority of the time,  so I would guess that you would get a very similar result, if you ran this backtest, but only buying the long call part of the trade, and not selling anything against it.

It would have to be.

[Djtux]

20 hours ago, krisbee said:

http://www.cmlviz.com/cmld3b/index.php?number=11844&app=news&cml_article_id=20171212_xlf-how-to-trade-the-great-financial-rotation-with-options

The csv with the extracted trades of the backtest.

 

CML TM Trades Call Calendar Spread 20171223.csv

[cuegis]

26 minutes ago, Djtux said:

The csv with the extracted trades of the backtest.

 

CML TM Trades Call Calendar Spread 20171223.csv

Is that it below (shown)?..Or do I happen to open the .csv link you provided?

I don't have excel on the computer I'm sitting at this moment.

Were the the results exactly what you would have expected?

[zxcv64]

I couldn't get any details when I open the XLF link above, so I can a similar test for 1 year, and then looked into the details - the very first trade has an error.

Check out the price of the short call below - it is a long way OTM and yet it has three times the price of the long ATM call. This is clearly wrong.

I have found many bugs in CML in the last we week, and this is a good example. I have realised that any back-test which shows a %Return figure of 1000% + is due to an error in the data.

 

Edited December 23, 2017 by zxcv64

[cuegis]

13 minutes ago, zxcv64 said:

I couldn't get any details when I open the XLF link above, so I can a similar test for 1 year, and the looked into the details - the very first trade has an error.

Check out the price of the short call below - it is a long way OTM and yet it has three times the price of the long ATM call. This is clearly wrong.

I have found many bugs in CML in the last we week, and this is a good example. I have realised that any back-test which shows a %Return figure of 1000% + is due to an error in the data.

 

It's enough to make consider cancelling it but, I was one of the 1st subscribers, so I got "grandfathered" in to their best "Pro" version for $49.

Anyway, I have never used their backtests to 100% recreate the plan right down to the exact way they do it.

More often, than not, I just use it to trigger ideas, which I then tweak on my own into something that makes sense.

There are many of their strategies that don't make  enough sense, by following their exact plan, but, with a few tweaks,can be a great underlying,at a specific time, to tweak into something of your own creation..

I have even looked at some of their suggestions,and when I just pulled up a basic, daily, price chart, said "wow, this is damn bullish" ,and just bought a vertical.

Or, if it was something I would plan to hold for 1-3 days, maybe even just buy outright 50-60 delta calls (or puts),and make it a purely directional trade.

Although the majority of my trading is delta neutral , premium selling strategies, mostly of commodities (they definitely provide higher premiums than stock, all things equal)....I am not opposed to an occasional directional trade.....Or a butterfly, for example, that is leaning in one direction.

 

In crude Oil futures options, for example,...if I go out to March (which expires in Feb), I am able to collect,as much as 75%+ of the distance between strikes, on a butterfly.

And, defying the "science" of options theta...they lose value very fast . Sometimes just as fast as equity options that have 1/2 as much time remaining.

Edited December 23, 2017 by cuegis

[zxcv64]

I like CML, it's a really fun toy, but am cautious until the results prove themselves. So, for a month now, I have been on a mission to take as many CML trades on as possible (on a tiny allocation, of course) and see what my results look like. By the end of Jan, I will have probably completed about 50-70 CML trades and will document my findings here.

If the results look good, then I'll formulate a structured approach and create a separate CML portfolio with a sizable deposit.

 

(PS - I opened that GC butterfly trade you mentioned last week. Am dipping my toes at the moment in commodities.)

 

[cuegis]

6 minutes ago, zxcv64 said:

I like CML, it's a really fun toy, but am cautious until the results prove themselves. So, for a month now, I have been on a mission to take as many CML trades on as possible (on a tiny allocation, of course) and see what my results look like. By the end of Jan, I will have probably completed about 50-70 CML trades and will document my findings here.

If the results look good, then I'll formulate a structured approach and create a separate CML portfolio with a sizable deposit.

 

(PS - I opened that GC butterfly trade you mentioned last week. Am dipping my toes at the moment in commodities.)

 

I really like GC and CL (Crude).

Crude futures options , unlike equity/etf options, are x1000, rather than x100. It is 1000 barrels of oil.

So, .50 cents, for example, is $500, not $50.

I have been selling $3.00 wide iron butterflies, with about 50-60 DTE, for more than $2.00. I shoot for $2.20, which is nearly collecting 75% of the distance between strikes.

 

The real, reality of these trades, is that you can sell them between $2.00- $2.20 credit, with 50-60 DTE, and buy them back for $1.40 in 2-3 weeks.

I have seen studies that show that a 10 delta CL option, with 60 DTE,  loses half of it's value in 2 -3 weeks.

You don't get anything close to this in stocks and etf's. If you are a premium seller.

There is also great liquidity,and just as good, or better opportunities, in Soybeans, Sugar, etc.

Lately I have been having a "logistical" problem, that is driving me crazy.

Even with a fairly large account, like 6  figures, I find that I have a lot of commodity based positions on, so the cash has to be swept over to the commodity section of my account, leaving me with less than $25,000 in the equity section, and I'm not allowed to open new equity/etf positions, because of the pattern day trader rule.

The PDT rule does NOT require that you have a net liq value of $25,000 to make day trades.

You have to have $25,000 in the "Securities" portion of your account. You, theoretically, could have a $1 million account, and have $976,000 in commodity positions, and your account is considered too small to meet the PDT rule!

It's crazy!

That rule is just about the sickest rule ever, and needs to be revoked immediately.

[siddharth]

Do you always go to the atm strike ? Are there any times that you look to open ? Can I just open on Tuesday morning or is there anything to keep in mind ? What is your exit criteria if it moves?

[cuegis]

22 minutes ago, siddharth310584 said:

Do you always go to the atm strike ? Are there any times that you look to open ? Can I just open on Tuesday morning or is there anything to keep in mind ? What is your exit criteria if it moves?

I do look at charts. But, I never use any indicators, because they can "suggest" a direction that you might want to see.

Strictly looking at price, is looking at reality.

I try not to predict the future, if I can help it. But, for example, if we are in a clear uptrend, or just broke out of a sideways pattern into a new direction, then I will center the Iron Butterfly above ,(or below) the market, depending which way the price is trending.

Crude has been in a sideways range for awhile now, which has been good for selling delta neutral premium.

But, I do unusual things. For example, I will center more of my I butterflies ATM, but have a few above, and below the market, which widens out my potential range of profitability.

Crude has been especially good because you get a large up day, immediately followed by a large down day....all within the larger range.

So, on a large up day, I might buy back some (profitable, for that day) short put spreads. Then on a reversal, put it back on. But, only on a small piece of it.

You want to keep the base position pretty close to how you set it up...as long as it is behaving itself.

But, a sideways market is one of the main criteria for a good candidate to sell delta neutral premium.

So, I would'nt put on a position like that , in something that is in a clearly trending market, which most stocks have been for awhile now, as you know.

That is why I like commodities, because there is enough stuff that is not all correllated the same way.

I also found that going out further in time, and collecting a lot of premium, can give back great returns faster than you would think.

Like the TLT trade that everyone has been doing.

I'm looking out to June , where I can collect $4.20 , on the same $5.00 wide fly that everyone else is collecting $2.50 with 40 DTE.

My risk is MUCH less, and if it pops out of the range, it allows much more time to recover back.

with Jan or Feb, you are not collecting enough premium, and if it does pop out of the range, you 

1- do not have enough premium to protect yourself and

2- do not have enough time for it to return to some sort of mean reversion.

Try doing strategies that you have already been doing (premium collection strategies), but go much further out in time.

You might be surprised how quickly they lose value. while giving you more protection.

Edited December 23, 2017 by cuegis

[Yowster]

The comments regarding CML go in line with what I've been saying from the very beginning - you have to dig into the trade details to validate things.   Its a powerful tool and fairly easy to use, and its great for that 1st level of trade research, but don't take the summary stats at face value until you validate things.   Its a pretty new tool and with that comes bugs, IMO they need to add some sanity check logic to their trades.   Some of the problems may be with their data, but that doesn't excuse not filtering for things that just don't look right.   Some particular things to look out for when looking at trade details (in addition to the out of whack pricing that Cuegis mentioned in his post):

• Selling a vertical for more than the width of a spread.
• non-equal wing widths on condors/butterflies, sometime the difference is minimal but I've seen quite large differences too.
• Non equal weighted trade iterations.  Technically not a bug, but when you have backtests of stocks whose price has changed greatly over time (GOOG, AMZN, VXX, SVXY come to mind off the top of my head) you wind up with some trade iterations factoring into the overall gain much more than others.  Also, if you are backing during both earnings and non-earnings periods then options are more expensive during earnings and this causes earnings trades to count more toward the overall than non-earnings trades do.  This could be solved by simply taking the average of each trade iteration, but is something you can't do right now in CML.
• Going short options for a few cents, or selling credit spreads for a small fraction of the spread width.  Again, technically not bugs, but something you would never do in your actual trades.

[NikTam]

On 12/23/2017 at 12:09 PM, cuegis said:

I do look at charts. But, I never use any indicators, because they can "suggest" a direction that you might want to see.

Strictly looking at price, is looking at reality.

I try not to predict the future, if I can help it. But, for example, if we are in a clear uptrend, or just broke out of a sideways pattern into a new direction, then I will center the Iron Butterfly above ,(or below) the market, depending which way the price is trending.

Crude has been in a sideways range for awhile now, which has been good for selling delta neutral premium.

But, I do unusual things. For example, I will center more of my I butterflies ATM, but have a few above, and below the market, which widens out my potential range of profitability.

Crude has been especially good because you get a large up day, immediately followed by a large down day....all within the larger range.

So, on a large up day, I might buy back some (profitable, for that day) short put spreads. Then on a reversal, put it back on. But, only on a small piece of it.

You want to keep the base position pretty close to how you set it up...as long as it is behaving itself.

But, a sideways market is one of the main criteria for a good candidate to sell delta neutral premium.

So, I would'nt put on a position like that , in something that is in a clearly trending market, which most stocks have been for awhile now, as you know.

That is why I like commodities, because there is enough stuff that is not all correllated the same way.

I also found that going out further in time, and collecting a lot of premium, can give back great returns faster than you would think.

Like the TLT trade that everyone has been doing.

I'm looking out to June , where I can collect $4.20 , on the same $5.00 wide fly that everyone else is collecting $2.50 with 40 DTE.

My risk is MUCH less, and if it pops out of the range, it allows much more time to recover back.

with Jan or Feb, you are not collecting enough premium, and if it does pop out of the range, you 

1- do not have enough premium to protect yourself and

2- do not have enough time for it to return to some sort of mean reversion.

Try doing strategies that you have already been doing (premium collection strategies), but go much further out in time.

You might be surprised how quickly they lose value. while giving you more protection.

@cuegis Thanks for sharing this idea.  It has features I find pretty compelling.  Not the least of which is a longer  time frame to manage profit and loss.  

[Maji]

On 12/22/2017 at 2:40 PM, cuegis said:

There is no way he can present this backtest seriously!

I'm looking at his link to this backtest , and although I have not gone through all 254 individual trades.  Just looking at the first 10 trades shows that he is buying the long call for .28, but, more importantly, selling the short call for .02 cents ,TO OPEN!.

Almost the same thing on the next trade, selling the short leg for .08 cents to open.

Either he is not serious , or I am reading the wrong test. But, I am using HIS link, and all of the other numbers coincide with the text of his description.

Do I even need to ask the question? Or, I would hope, it does not need any explanation.

Selling anything for .02, or .08, to open, as part of a position,....to what end?

It is not a hedge. It's purpose is to be the "short leg" of a calendar. Really? .02 cents.?..., .08 cents? Then it goes on, .12 cents, then, once again .02 cents.

It was not a one time mistake, it is done repeatedly . He is selling the short leg , of a calendar, for .02 cents to open, many, many times.

Why not just sell it for .00?

I'm surprised that nobody else has brought this up.

 

I have to add this. I just found several cases where he is selling the short leg for .01 cent to open!

It looks like almost buying a long call... Financials have been on an uptrend, so if I test with long calls, I think I will get similar results. It might be cherry picking, but I will check this idea and see. I have sent a number of reports, especially about CML's squeeze setups, to the help desk and got emails back that they were looking into it but never a resolution. They now changed the squeeze set up significantly. I am starting to think that this thing is over optimized and maybe working in a bull market. We have to remain vigilant while taking these trades.

[cuegis]

6 minutes ago, Maji said:

It looks like almost buying a long call... Financials have been on an uptrend, so if I test with long calls, I think I will get similar results. It might be cherry picking, but I will check this idea and see. I have sent a number of reports, especially about CML's squeeze setups, to the help desk and got emails back that they were looking into it but never a resolution. They now changed the squeeze set up significantly. I am starting to think that this thing is over optimized and maybe working in a bull market. We have to remain vigilant while taking these trades.

You know...they are putting together a piece of software that has great potential but, before, releasing, and taking money, from customers, I think it is very much their responsibility to do their due diligence.

There are enough , way out of the ordinary, results,that should obligate them to look deeper , into the specifics, of those type of backtests.

When you get 2500% returns, I t is your responsibility to dig deep, and find out why, before releasing it , and taking money, from customers.

Here is a thought....out of all of their backtests, that show very outsized returns, what percentage of those backtests created their profits, from one way , or another, just being long deltas, with the wind at your back to catch you..

It's like throwing a dart at a dartboard, and hitting the bullseye vs, just hitting the wall.

If you just threw a dart , and you win, if you only hit the wall....that would be like going long some form of delta position, convieniently, over the past 3 years. Statistically, you most likely would have hit the wall.

Where are the backtests that show 500%-1000% returns on a down move, with short deltas?

What percentage of those (if any at all) are there, compared to outrageous returns from long deltas.?

[cuegis]

Just a reminder to everyone who is using Trade Machine.

Use it all you want, it has tremendous potential to open up your mind to new ideas, and even stocks that you may never even thought of looking at.

I run tests ,sometimes, for hours, and find some things that appear to be amazing.

But, when I open the "trades" tab , to look at each, and every specific trade, I have been finding an endless amount of errors.

Some are very small, but they are outright wrong.

For example, I was just examining the individual entries, and exits, on a strategy that looked very good.

I found that it bought xyz call for $1.48, and closed it out for $1.58, and it showed that trade creating a loss of .02 cents.

I had zero commissions as the default, so it did not come from commissions.

I know that this is a very small example, but, wrong is wrong.

So, if you find something you like, please make sure to carefully examine the actual trades, to make sure that everything is what you are assuming it is.

Edited January 1, 2018 by cuegis

[NikTam]

@cuegis Thanks.  I will add this extra step.  

[krisbee]

Stock: ASML

http://www.cmlviz.com/cmld3b/index.php?number=11881&app=news&cml_article_id=20180102_the-pre-earnings-momentum-trade-in-the-quiet-giant-chip-maker

 

[Sirion]

3 minutes ago, krisbee said:

Stock: ASML

http://www.cmlviz.com/cmld3b/index.php?number=11881&app=news&cml_article_id=20180102_the-pre-earnings-momentum-trade-in-the-quiet-giant-chip-maker

 

Not expected for another couple of weeks (1/17), but a good one to keep on the radar.

Now that things are getting back into swing, anyone looking at any other pre-earnings trades?

[mustafaoe]

I am looking also for GOOGL, AMZN and BIDU

[IgorK]

13 minutes ago, Sirion said:

Not expected for another couple of weeks (1/17), but a good one to keep on the radar.

Now that things are getting back into swing, anyone looking at any other pre-earnings trades?

INFY, NFLX

[cuegis]

18 minutes ago, Sirion said:

Not expected for another couple of weeks (1/17), but a good one to keep on the radar.

Now that things are getting back into swing, anyone looking at any other pre-earnings trades?

Do you mean pre- earnings trades to follow this particular strategy with?

Or  our usual calendars , and straddle approaches?

[Sirion]

6 minutes ago, cuegis said:

Do you mean pre- earnings trades to follow this particular strategy with?

Or  our usual calendars , and straddle approaches?

Was referring to the pre-earnings momentum trades as part of this thread, though other CML ideas I guess are relevant. This would probably be a good time to re-visit splitting this trade up, as it's clearly getting plenty of activity.