Welcome to SteadyYields

[Drizzle_268 1]

With such a year return, what is the max drawdown in this strategy? 

[SBatch 2,222]

13 hours ago, Alpha Harvester said:

Credit spreads obviously work nicely for the delta neutral (iron condor) trades on TMF/TLT. How do you decide whether to use a debit or credit spread for the directional (bullish/bearish TMF/TLT) trades?

I use credit spreads unless I am anticipating a very sharp elongated move.  I want to be Theta positive while I wait for the move to play out, and rolling allows to also capitalize on Delta. For example, the model portfolio is up about 50% MTD using only credit spreads.

[SBatch 2,222]

1 hour ago, Drizzle_268 said:

With such a year return, what is the max drawdown in this strategy? 

I keep the max estimated drawdown to around 20%.

[jvo 9]

1 minute ago, SBatch said:

I keep the max estimated drawdown to around 20%.

Thanks for this Sbatch.

Wondering how this strategy would look alongside SteadyVol within the same account. 

I believe SteadyVol was attempting to keep the max drawdowns to around 30%. 

If wanting to run both in the same account, can this be done with $20k (assuming the $10k model trades for each strategy) without running into any margin issues?

[SBatch 2,222]

Just now, jvo said:

Thanks for this Sbatch.

Wondering how this strategy would look alongside SteadyVol within the same account. 

I believe SteadyVol was attempting to keep the max drawdowns to around 30%. 

If wanting to run both in the same account, can this be done with $20k (assuming the $10k model trades for each strategy) without running into any margin issues?

Max estimated drawdown for SV is also around 20%. Yes both could be traded in a $20k account.

[SBatch 2,222]

3 hours ago, drkats said:

@SBatch and team, thank you for rolling out this strategy.  Looks straightforward.  Question: how do you determine whether to use TMF or TLT?

I will use TMF as long as there continue to be no liquidity concerns.

[falkor 20]

My understanding is that the payoff graphs are identical for credit and debit spreads, with the only difference being the payoff timing (whether credit received up front or over the life of the trade), assuming IV doesn't change. Credit spreads are short vol (-ve vega), so work well if you don't expect IV to increase too much. In contrast debit spreads are long vol and work better if you expect IV to go up (eg sudden move). @Kim @SBatch am I on the right track?

[Kim 7,475]

19 minutes ago, falkor said:

My understanding is that the payoff graphs are identical for credit and debit spreads, with the only difference being the payoff timing (whether credit received up front or over the life of the trade), assuming IV doesn't change. Credit spreads are short vol (-ve vega), so work well if you don't expect IV to increase too much. In contrast debit spreads are long vol and work better if you expect IV to go up (eg sudden move). @Kim @SBatch am I on the right track?

It depends on the strikes. If using they same strikes, they would have the same (or very similar) Greeks. Different strikes would have different effect on the Greeks. @Yowster wrote an article recently how IV impacts different trades - https://steadyoptions.com/articles/the-impact-of-implied-volatility-iv-on-popular-options-trades-r805/

[ItsNoahTime 3]

On 4/21/2024 at 6:40 AM, Bullfighter said:

I find SY way less involved, as you don't need to focus in a plethora of securities. Also, you execute less trades overall. The profit percent per trade is higher, so timeliness of execution is less of a factor. Sometimes you can get better pricing, but it's a coin flip. Still, you shouldn't dilly dally and place the order sooner rather than later, as the thesis can play out without you.

I feel the same way about this strategy.  SteadyOptions is great, but the SteadyYields trades have been more profitable and the fills happen faster.  The only advantage of SteadyOptions is the proven longevity.  I have probably mid-level knowledge on options trading and SteadyYield's spreads are easier to understand and somewhat replicate if there's liquidity issues. 

I am also pretty excited about the fund/s.  Seeing how awesome SteadyYields has done has alleviated some of my anxieties about the fund's performance (it's my first fund).  The convenience and discipline of the fund manager, while also boasting market beating returns, is literally exactly what I've been looking for.  There's syndicate funds, but usually I don't see them making as much as the potential CAGR of these.  Either way, I'm pretty stoked about finding this website as it's always been "steady."  

[Drizzle_268 1]

Do you preform any technical analysis when you’re looking at the two securities?

[SBatch 2,222]

6 hours ago, Drizzle_268 said:

Do you preform any technical analysis when you’re looking at the two securities?

I pay attention to trend lines and ranges on the 30 year bond.

[V_NAM 6]

If we were to apply the 'Efficient market' theory to this strategy; as more and more people trade this strategy, the advantage afforded by this correlation of CL with TLT should slowly reduce. But it is interesting to note that this trend existed for past 20 years! Wonder what makes it tick. I read some of the links posted in the thread, but I am not finding them very convincing. Of course, I wish the lagging correlation continues to exist!!

[SBatch 2,222]

11 minutes ago, VNambula said:

If we were to apply the 'Efficient market' theory to this strategy; as more and more people trade this strategy, the advantage afforded by this correlation of CL with TLT should slowly reduce. But it is interesting to note that this trend existed for past 20 years! Wonder what makes it tick. I read some of the links posted in the thread, but I am not finding them very convincing. Of course, I wish the lagging correlation continues to exist!!

We will not be affecting the largest market in the world (Treasury), I assure you. Petrodollar system is a very convincing reason.

[mrputsncalls 11]

We also have to be sceptical about the efficient market hypothesis. "Hypothesis" btw, not a theory. 

The way I reject the hypothesis for myself is I look at the list of the most successful hedge fund managers, hedge funds in general, successful traders from books on the biographies of those. The list is long. None of these people's success would have been possible if the hypothesis was true. 

[TrustyJules 2,946]

7 hours ago, SBatch said:

We will not be affecting the largest market in the world (Treasury), I assure you. Petrodollar system is a very convincing reason.

LOL in the proverbial words: "When I die I want to come back as the bond market because then you can intimidate anybody."

[Drizzle_268 1]

What trigger do you look for before entering a trade?