Welcome to SteadyVIX

[Kim 7,958]

SteadyVIX is volatility based strategy that targets 30%-40% in annual compounded returns, while being fully hedged against black swan events. The model portfolio will be based upon $10,000 and will usually be approximately 80% invested.  There are no liquidity concerns on VIX near term monthly options. The strategy is using a mix of debit spreads, credit spreads and calls in a certain ratio.
 

The SteadyVIX Overview thread on members forums possesses a wealth of information on previous trades allowing new subscribers to get up to speed very quickly.

It is recommended that this strategy be traded with a low cost broker like Tradier.  

February 2024 offer from Tradier:

Steady Options customers receive a special Index Option pricing of only $.10 per contract when you sign up for the Tradier Pro plan.**

Customers must be subscribed to Steady Options in order to take part in this promotion. Limited to one account per household. 

*Single Listed Index Options are subject to a $0.10/contract commission in addition to any other charges for exchange, OCC, and regulatory fees. See Fee Schedule for more details. Tradier Brokerage Inc. charges for exchange, OCC, and regulatory fees. Other fees and applicable minimums may apply see Fee Schedule for more details.

The bottom line is that Single Listed Index Options (VIX etc) will have a special pricing of around 0.50-0.55 per contract all in.


Service highlights:

• Model portfolio: $10,000
• Underlying: VIX options
• Average holding period: 3-5 weeks
• Tailored for short to medium term traders
• Profit targets: 30-40% per year
• 2-3 trades per month, plus adjustments
• Less than ~1%/month commission impact (unless trading with Tradier)
• Fully scalable

June 30, 2024 update

Scott Batchelar (who was the original strategy manager of SteadyVol and introduced the strategy to our members in November 2022) has left our company to pursue other opportunities. Mr. Batchelar is no longer managing any of our services. He is not involved in any of our activities in any capacity. We are not associated in any way with any of Mr. Batchelar's businesses and cannot comment, advise or endorse any of them. The strategy has new managers as of June 30, 2024.

To avoid confusion, SteadyVol has been renamed to SteadyVIX. For the record, the original strategy description has been written by Scott Batchelar.

[Romuald 626]

I complete my post of 11/11/2022 with more accurate statistics on VIX :

So 80% of the time since 1990 VIX was under 25.3.

 

[Peeyotch 243]

This trading system is generally very forgiving of timing. If vol isn’t moving much, the pricing of the position (especially if it is brand new) is not likely to move much either. Even if vol does move, you can watch it for when it comes back into the area where the trade was placed and you can probably get in for a similar price.

 

This contrasts with Steady Options where a quick trigger finger or proactive standing orders are often needed to get into advantageous trades. Those are not necessary here. Skipping a trade is really only called for when there is not enough profit potential left in the trade when you are trying to get in. 

[Marshall 4]

Good morning.  I am new to SteadyVol.  Can you please shed more light or an example of how the monthly returns for this service are calculated?  I am placing my trades using the same size as shown in your trades (my account value is $100,000) and am also pretty closely matching your actual fills in terms of price.  But am not seeing the returns you show in the Performance section of the website.  For example, does the 2.3% return for October represent mark-to-market gains or gains on closed trades, etc?  Any clarity on this topic is greatly appreciated.

Thanks.

[Kim 7,958]

On 11/21/2023 at 9:38 AM, Marshall said:

Good morning.  I am new to SteadyVol.  Can you please shed more light or an example of how the monthly returns for this service are calculated?  I am placing my trades using the same size as shown in your trades (my account value is $100,000) and am also pretty closely matching your actual fills in terms of price.  But am not seeing the returns you show in the Performance section of the website.  For example, does the 2.3% return for October represent mark-to-market gains or gains on closed trades, etc?  Any clarity on this topic is greatly appreciated.

Thanks.

It is based on all trades closed in the specific month. For example for October:

If you summarize all 5 trades results, this is what you will get.

 

+79

+100

+124

+239

-308

Total: 234 or 2.34%

 

[greenspan76 332]

19 minutes ago, Petr said:

I only wanted to add, that I have similar figures. For the last 3 months, I can confirm $0.84/contract Round Turn (option open and close). For Tradier broker of course.

You mean $0.42 per open + $0.42 per close for $0.84 round-trip? Because using Tradier in 2023, I opened 318 total VIX option contracts + closed all 318 of those contracts and my total commissions/pass-thru fees was $525.10. That $525.10 / 636 total contracts = $0.825 per contract traded. And according to Tradier's website, they charge:

 

$0.35/contract Commission
$0.045/contract Clearing fees
$0.40/contract Single listed option index fee
---------------
$0.795/contract total cost (+ ORF regulatory fees which Tradier says are $0.02905/contract but they change periodically

Edited December 13, 2023 by greenspan76

[Petr 25]

As a European resident and thus a non-US citizen, I'm engaged in financial trading through a brokerage account that I opened with Tradier in September 2023. This journey to establish my account took approximately six weeks, primarily due to the meticulous compliance process at Firstrade. My first trading activity was executed on September 27th. In line with standard industry practices, I receive individual confirmations for each trade I conduct, which includes specific confirmations for each options trade. Additionally, to keep track of my financial activities and portfolio performance, Firstrade provides me with a comprehensive monthly statement.

16 minutes ago, greenspan76 said:

I am using the daily confirmation report - I just assumed it looked the same for everybody, but yours is just showing the $0.45 commission and what they call the "transaction fee" on my report. It doesn't include the $0.40 single listed option fee or the the $0.045 clearing fee, which are both included in the "Add'l Fees" column on the report I see. Weird. I don't know if there is some difference for non-Americans, but their website clearly states the commissions/fees for VIX that I showed a few posts above and that adds up to what I get charged

 

Edited December 13, 2023 by Petr

[Petr 25]

International Individual Account (margin) with Firstrade not Tradier. Now I see, what is going on. @greenspan76 wrote about Tradier a me about Firstrade. Sorry for that. My mistake.

Edited December 15, 2023 by Petr

[Bullfighter 385]

I don't get the $1.10 IBKR calculation. My understanding is that IB charges $0.65 per contract, and the exchange and regulatory fees pass through for VIX is $0.24. Can someone trading VIX with Firstrade confirm that they just charge the $0.24 per contract? Right now TOS charges me $0.24 on behalf of the exchanges and regulators plus their own commission. The above calculation for IBKR would make sense trading SPX, as there the exchange plus regulatory fee adds up to $0.52 instead of $0.24, so that's $1.17 on IB per contract.

[greenspan76 332]

32 minutes ago, Bullfighter said:

I don't get the $1.10 IBKR calculation. My understanding is that IB charges $0.65 per contract, and the exchange and regulatory fees pass through for VIX is $0.24. Can someone trading VIX with Firstrade confirm that they just charge the $0.24 per contract? Right now TOS charges me $0.24 on behalf of the exchanges and regulators plus their own commission. The above calculation for IBKR would make sense trading SPX, as there the exchange plus regulatory fee adds up to $0.52 instead of $0.24, so that's $1.17 on IB per contract.

Total costs for trading VIX options at IB:

 

$0.65 IB commission
$0.02685 regulatory fees
$0.02 OCC clearing fees
$0.45 CBOE fee for VIX options
--------
$1.14685 total cost per contract

+ $0.000008 * aggregate value SEC transaction fee
+ $0.00279 x qty sold FINRA trading activity fee

I split my SteadyVol portfolio between IB and Tradier from November 2022 through August 2023 and my average commission per contract on all IB trades was $1.16xx

 

https://www.interactivebrokers.com/en/pricing/commissions-options.php?re=amer
https://www.interactivebrokers.com/en/accounts/fees/CBOEoptfee.php

Edited February 5 by greenspan76

[Bullfighter 385]

If you look at the CBOE fee schedule, it is complicated, depending on adding or substracting liquidity and other variables, plus the traded product (RUT, VIX, SPX, etc.). It seems most brokers are passing the maximum common exchange fee for the product regardless of situation. However, it looks like TOS does a precise passthrough. In this example in one of my accounts, misc fees is the sum of exchange and regulatory fees and commissions is what TDA/Schwab charges. When going long a vertical spread, they are charging 32.64 cents per contract. When going short a vertical spread, they charged 18 cents. When going long a single, they charged 25 cents. In any case, always less than 45 cents. In the case of SPX options, it comes up to 52 cents.



Obviously, you are still better off at Firsttrade even if they pass 49 cents towards exchange and regulatory fees, provided fills are comparable. I know for options traded on multiple exchanges (stocks and ETFs), is is advantageous to get filled on IBKR or TDA even if they charge fees because there's less slippage. I don't think there's a difference in slippage in single exchange traded options like SPX of VIX.
  

[Bullfighter 385]

According to Firstrade's website, they trade quotes in increments of 5 cents if the premium is under $3 and 10 cents if the premium is over $3. For VIX that is ridiculous, especially if they don't do price improvement on fills. I have placed VIX orders at $3.34, $1.14 or $0.39 which got filled with TOS. If that is the case, it totally negates the fee advantage of Firstrade. https://help.en-us.firstrade.com/article/173-in-what-price-increments-are-equity-and-index-options-quoted

[Kim 7,958]

Tradier recent pricing change is a game changer for those who cannot trade with FirstTrade. No more excuses.

[SteadyRandy 4]

On 2/29/2024 at 10:37 AM, Carstensentm said:

I would also like to know; If I start a firsttrade account, I'm having difficulty mapping out existing trades against firsttrades Roth IRA trade restrictions. Is steady volatility a good idea for a Roth?

IMO, the Firstrade Roth or regular IRA is not suitable with SteadyVol considering the following information:

 

STEADY OPTIONS
ITM debit and credit spreads on front and back month VIX futures hedged by a ratio of long calls

FIRSTRADE GENERAL 
Which option trading/investing strategies do you provide?

Currently we support writing Covered Calls (including Roll Forward), writing Cash-Secured Equity Puts, purchasing Calls & Puts; as well as Spreads & Straddles, Butterfly & Condor (including Iron Condors); and writing Uncovered Puts.

Please note that at this time we do not support Calendar & Diagonal Spreads on Index Options. 

FIRSTRADE IRA
What types of investments are eligible for my IRA account?

You can invest in stocks, bonds, mutual funds, CDs, and options (write Covered calls, write Cash-Secured Equity Puts and purchase Calls & Puts only) just like a regular cash account. 

However, the use of margin is not allowed for IRA accounts.

 

[pbuuck 9]

30 minutes ago, kirkr1517 said:

I am a returning subscriber. Long story short I couldn't get my emotions out of the way in the past. Here's my question;

I use Tastytrade and they have a maximum $10 per leg no matter the contracts for stock options. Would this work well with SteadyVol due to the larger quantity of contracts?

I use Tastytrade as well. Unfortunately their $10 max does not apply to VIX - you will pay $1 commission for every VIX position you open. Overall they are pretty expensive for this system, but I am using them for convenience right now while I consider a long term alternative. It's still a profitable system though.

[Kim 7,958]

https://tastytrade.com/commissions-and-fees/

 

[jroback 5]

Looks like those of us on ToS will move to a zero-commission structure when accounts move to Schwab. Should be more equivalent to the package that Tradier offers. Time will tell whether fills and customer service get worse with that change, however. 

[Infineo 33]

1 hour ago, jroback said:

Looks like those of us on ToS will move to a zero-commission structure when accounts move to Schwab. Should be more equivalent to the package that Tradier offers. Time will tell whether fills and customer service get worse with that change, however. 

Hmmm...Unless I am missing something, I don't see any change with TOS to Schwab move. On TOS its $0 commission for option trade + .65 per contract. It's the same on Schwab. I did contact TDAmeritrade in the past for a better price and they reduced it to .50 per contract for me. Hopefully that stays when my account is moved. 

I am going to reach out to them again and see if they can get it somewhere close to .40 cents because I see Tradier is .35 per contract.  
Doing some calculations on my end, I think Tradier is cheaper even with the $10 monthly fee + the contract prices compared to what I am paying for TOS. 

[Bullfighter 385]

I moved a small portion from my TOS portfolio margin account to Firstrade and my fills are comparable for the same VIX structures in both platforms. It takes seconds to setup a trade in TOS, while Firstrade is painful. For a non-frequent trade like Steadyvol it is worth it. For something more frequent or more sophisticated, specially if the fee is a much smaller percentage of the profit, I will stick with TOS.

[kaush 0]

I have been using Fidelity for trading SteadyVol for the past 3 months as I have been testing out the service. Paying a lot in commissions so want to lower them now because I also want to utilize SteadyYield. Should I go with Tradier or FirstTrade?

Seeing 0.35 on Tradier's website - does the pro account have an option to lower the fees to 0.10 if I email them? And what is the fee structure with FirstTrade? Do SteadyOptions members get a deal with FirstTrade?

[Darren Dawson 14]

Kaush,

I have some questions for you since you are Fidelity to test drive SteadyVol.

What was the drag in Fidelity for the SteadyVol trades?

What option trading level in Fidelity do you need to have for the SteadyVol trade?

Thanks

Darren

[kaush 0]

@DarrenWhat do you mean by drag exactly? Quite new to this so don't understand all the technical terms.

 

I had to get Tier 3 at Fidelity; they only allow it on one account at a time so open a new account and request Tier 3 on that account if you want to keep your stocks and options purchases separate.

I just opened FirstTrade and applied for Tier 4 and was approved within 2 days. I plan to move some assets there to do both SteadyVol and SteadyYield.

[kaush 0]

1 minute ago, kaush said:

@DarrenWhat do you mean by drag exactly? Quite new to this so don't understand all the technical terms.

 

I had to get Tier 3 at Fidelity; they only allow it on one account at a time so open a new account and request Tier 3 on that account if you want to keep your stocks and options purchases separate.

I just opened FirstTrade and applied for Tier 4 and was approved within 2 days. I plan to move some assets there to do both SteadyVol and SteadyYield.

Just read about drag. I honestly cannot answer this because I did not look. I try to make the trades as quickly as possible upon posting and for the most part I have been able to get the same or better price when posted. It does happen that sometimes I do not get it and I have to pay more (or the loss is more when selling) but that's may be 2 out of 10 times in the last 3 months. I also did not place every single trade posted; I missed some because I did not hit the follow button properly on every trade so adjustments were missed and that impacted some returns.

 

So far in 3 months, I have paid $311 in options contract fees to Fidelity (I only have SteadyVol) and I'm in a profit of $1,423 as of today. I think FirstTrade would be much better for me.

[Darren Dawson 14]

6 minutes ago, kaush said:

@DarrenWhat do you mean by drag exactly? Quite new to this so don't understand all the technical terms.

 

I had to get Tier 3 at Fidelity; they only allow it on one account at a time so open a new account and request Tier 3 on that account if you want to keep your stocks and options purchases separate.

I just opened FirstTrade and applied for Tier 4 and was approved within 2 days. I plan to move some assets there to do both SteadyVol and SteadyYield.

Drag - How much were you losing to fees and commissions in Fidelity? Could you give me a rough for idea for the SteadyVol trade?

Do you nee level 3 in Fidelity to do the SteadyVol trade? or can you do it at the Spread Level?

 

 

[kaush 0]

1 minute ago, Darren Dawson said:

Drag - How much were you losing to fees and commissions in Fidelity? Could you give me a rough for idea for the SteadyVol trade?

Do you nee level 3 in Fidelity to do the SteadyVol trade? or can you do it at the Spread Level?

 

 

I think we posted at the same time - So far in 3 months, I have paid $311 in options contract fees to Fidelity (I only have SteadyVol) and I'm in a profit of $1,423 as of today. I think FirstTrade would be much better for me as I would have lost much less in commissions.

I was not able to place one of the trades initially so when I called them they said I need Tier 3 (or level 3). It takes a couple days to get approved. 

[kaush 0]

1 minute ago, kaush said:

I think we posted at the same time - So far in 3 months, I have paid $311 in options contract fees to Fidelity (I only have SteadyVol) and I'm in a profit of $1,423 as of today. I think FirstTrade would be much better for me as I would have lost much less in commissions.

I was not able to place one of the trades initially so when I called them they said I need Tier 3 (or level 3). It takes a couple days to get approved. 

Here's my spreadsheet of trades that I placed this year; you can see all the fees. If you have the time and energy you can likely look up which ones I ended up missing - though I don't think there's an easy table of them like that of SteadyOptions trades.

History_for_Account.csv

[J10 64]

I decided to try the SteadyVol trades with IBKR for myself, reducing commissions by taking an additional long call and foregoing the PCS. It is still very early, but so far it has been profitable. 

[LearPilot 35]

On 4/4/2024 at 8:09 AM, J10 said:

I decided to try the SteadyVol trades with IBKR for myself, reducing commissions by taking an additional long call and foregoing the PCS. It is still very early, but so far it has been profitable. 

Can you give an update? How is it going with IBKR? Is it reasonable with the commissions?

[J10 64]

17 hours ago, LearPilot said:

Can you give an update? How is it going with IBKR? Is it reasonable with the commissions?

Hi,

 

I’ve only been trading it for a short time now, and the strategy doesn’t trade very frequently, so it is still too early for me to draw any real conclusions. After all, I have only completed 2 trades thus far.

 

IBKR commissions are substantial, there’s no doubt about that. Expect to pay around $1.15 per contract (or $2.30 per spread). Commissions will definitely eat a significant chunk of your returns.

 

That being said, I am net positive on the system thus far, despite these high commissions.

 

Edited May 31 by J10

[falkor 254]

My experience is that trading VIX spreads in IB is slightly cheaper than trading individual legs in isolation. This is a recent fill from yesterday. The per-contract cost turned out to be $1.08. But even at these levels it's true that IB comms will eat into this strategy's profits, as J10 said.

[Kim 7,958]

[J10 64]

Just now, Ashish0490 said:

What are the parameters to get $0.65 at IB? I am also being charged higher. Any useful links/information will be appreciated. 

For VIX spreads:

IB commission = $0.65/contract
CBOE exchange fee (Complex VIX, Premium > $2.00) = $0.45/contract

The above fees work out to roughly $0.05/contract

0.65+0.45+0.05 = $1.15/contract or $2.30/spread

[Peeyotch 243]

This is the full VIX exchange fee schedule. You get a break for trading cheaper contracts, which does sometimes come into play. It's also worth noting that some other brokers just charge you $0.45 (or more) per contract, remit the correct amount to CBOE, and pocket the rest.

 

CV Customer, Premium $0.00-$0.10, VIX, Simple 0.10 CW Customer, Premium $0.11-$0.99, VIX, Simple 0.25 CX Customer, Premium $1.00-$1.99, VIX, Simple 0.40 CY Customer, Premium >=$2.00, VIX, Simple 0.45 CZ Customer, Premium $0.00-$0.10, VIX, Complex 0.05 DA Customer, Premium $0.11-$0.99, VIX, Complex 0.17 DB Customer, Premium $1.00-$1.99, VIX, Complex 0.30 DC Customer, Premium >=$2.00, VIX, Complex 0.45

 

[BW.SQL 12]

Looking to subscribe to SteadyVol. Currently trading using ToS and IB. I would like to not have to open a new brokerage account just for this strategy but it appears that may be the best option from a performance standpoint. 

For those who have traded this strategy using ToS, has it made sense to do so given their commission/fee structure? I have seen conflicting posts. 

[Jonah L 11]

Can you please confirm the model portfolio size? The strategy front page and description still show $10,000

[Kim 7,958]

Yes, $10k.