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I just received this email addressing some issues SO was facing in the past. I’m not a member anymore but I was and I’m familiar with the strategies. I’m a vol trader since over 20 years so here my 5 cents. There is no fundamental change in volatility. Volatility is behaving as it always does. Volatility reflects the future expectation of movement of an underlying during a certain time frame. One important driver of Volatility are events. The bread and butter of SO, earnings events. Since Trump took office, single stock volatility also incorporates a lot of Macro Event vol and there are a lot more than normal. Best example is the one you used: SOFI. Expiry is 1st of August. Thats Trump’s Tarif deadline and that’s something effecting all businesses. Hence to the normal earnings expectations you got additional macro risk that is specifically fixed on one date. But Trump started taking some expectations out of the deadline by announcing the sending out of letters with deals about two weeks ago and about one week ago announcement of a deal with Japan and on Monday the deal with EU. Hence 1st of August premium got priced out after several parts of the big event got communicated down the road. Thats like pre earning releases. There are a lot of these Macro Events around. Hence, if you trade volatility, you need to be aware of these (extra)events and what the additional premium for these events are on top of the normal micro events. It’s ok trading on backtesting but you need to be aware of the future, hence if the future has addition risk that isn’t replicate in past comparisons. I can clearly say, the SO edge isn’t lost, you just need to be aware what expiry vols you are buying/selling and what (additional) risk they incorporate.

Hi everyone, As some of you already know, I’m not only a fellow Steady Options member but also a physicist who loves coding Python tools to help me make better trading decisions—always grounded in probabilities and statistics. I’m excited to share that I’ve put some of these tools online at math-trading.com. One of the main ones available right now is my Monte Carlo simulation tool. Pricing: $39/month or $359/year (before applying the coupon). Special for SO members: you get 15% off all subscriptions until December 31, 2025. And here’s the bonus—new tools I’m currently developing (including a Monte Carlo + Credit Put Spread combo) will be added over time without any price increase. Feel free to check them out, and if you have any questions or ideas, just reach out through the math-trading.com website. Happy trading—and thanks for your trust! Romuald

Hi everyone, I have added a new tool to my math-trading.com website. It is a table showing the results of a scanner that computes the Probability of Profit (POP) for Credit Put Spreads options trading strategies on some ETF's (the most liquid in options) using Monte Carlo Simulations. The Monte Carlo Simulation runs thousands of individual stock price simulations and uses the data from these simulations to average out a POP number, using the Black&Scholes formula. Unlike other calculators, this new tool lets you is a scanner and tries different target profits (as a percentage of maximum profit that will trigger the position to close when it's reached in the simulation. Here's how it works: The algorithm scans: ETF tickers For each ticker: DTEs between 30 and 60 days For each expiration, it tries different deltas combinations: (0.45, 0.40), # Short delta = 45, Long delta = 40 (0.45, 0.35), # Short delta = 45, Long delta = 35 (0.40, 0.35), # Short delta = 40, Long delta = 35 (0.40, 0.30), # Short delta = 40, Long delta = 35 (0.35, 0.30) # Short delta = 35, Long delta = 30 ] For each Credit Put Spread, for each day between today and the expiration date, it performs 5,000 simulations of Monte Carlo and, for each of the 5,000 prices obtained, applies the Black & Scholes formula to estimate the price of the initially opened Credit Put Spread. When the GTC of 30%, 40%, and 50% is reached, it looks at the number of days it took to reach it. If it is not reached, the Credit Put Spread is considered lost. It thus calculates, for all simulations, a profit probability and an average day to close. Note, of course, that the IV is considered constant and equal to the value when the Credit Put Spread was opened. The stock price volatility is equal to the implied volatility and remains constant. It makes the following assumptions for its simulations : Geometric Brownian Motion is used to model the stock price using Monte-Carlo simulations, Risk-free interest rates remain constant, The Black-Scholes Model is used to price options contracts, Dividend yield is not considered, Commissions are not considered, Assignment risks are not considered, Earnings date and stock splits are not considered, Of course, not all of these assumptions are true in real life and so there are limitations to this approach. For example, it's highly unlikely that the stock price volatility remains constant for several days. Thus, one should take these results with a grain of salt. Here are the results for yesterday 2025-08-20: On that image I have applied the filters : Gain/Loss min = 0.50, GTC/Loss min = 0.25 and Avg DTC (Day to Close) max = 10 : it means that I want the scanner to select the trades that have reached their GTC within the 10 days after the opening of the trade : this filter is because it is better to close these kind of trades once we get within a 2 weeks of expiration because gamma risk gets much higher closer to expiration. Of course you can click on each columns to sort by ascending / descending order. The computation process itself is very long, given that 5,000 Monte Carlo simulations must be carried out for every day over the 5 last years (for the history of Monte-Carlo simulations), for all tickers, for different combos of Deltas and different expiration dates. On my powerful PC, this takes about 3 hours, without running anything else. Therefore, it is only possible, on math-trading.com, to put the final results table every day. You can see in the image that I have put very interesting filters so that everyone can choose according to their wishes. I will put a complete user guide and deeper explanations in the coming days but, in the footer of the table, you already have a brief description of the different terms ("dictionary of terms"). I hope you all find this tool useful! In preparation : a new tool for calculating the Probability of Profit (POP) and the Average Day to Close for a lot of options trading strategies using Monte Carlo Simulations! Stay tuned! Romuald

In the name of full transparency, I would like to address some issues regarding SteadyOptions recent performance. I will separate the analysis into several separate posts. Our performance in the recent months is not in line with our long term returns, as everyone can see on the performance page. The main reasons for the recent underperformance: We are struggling with a change in the fundamental behavior of volatility at the moment. Our trades rely on RV and therefore also IV and this has not been acting as expected. Periods of extended VIX decline have always been some of our worst performers. The main problem now is that we have been in a long period of VIX decline that’s been going for months - there have been a few spikes but in general VIX has gone from 30+ to the 20’s to the mid teens (and making things worse is many periods of minimal stock price movement during this timeframe). Our core trades do well when volatility is stable or rises. When volatility started to drop, it created some large percentage losers on a few trades that had an oversized negative impact on the portfolio performance. We had much less trades in 2025, which made the impact of those larger losses bigger. We had less trades because some options became very expensive, so it became difficult for many trades to fit into a $1K allocation, and for many stocks with moderate liquidity in normal times, now had less liquidity and very wide bid/ask spreads. This made them much more risky to use for options trades as slippage was a big concern. We used some directional trades, and the stocks did not follow historical patterns in those trades. When a directional trade goes against you, losses can grow very quickly. This is what happened with TTD, XYZ, KO, FL etc. Some of the non directional trades also experienced outsized losses. We will reduce the number of directional trades going forward. We used less calendars than usual because many of them were way too expensive compared to previous cycles. Now with VIX in the mid teens, we expect to trade more calendars, which is one of our best performing strategies. We are having extensive internal discussions on how to adapt to the current environment. Our strategies are designed to make money in any market. They are not guaranteed to make money, but our long term objectives are still in place. No strategy works all the time. There’s no room for ‘never’ or ‘always’ in the financial markets.

Profits come in bunches. The trick when going sideways between home runs is not to lose too much in between - Michael Covel I keep repeating this quote again and again, just look at latest Simple Spreads performance. Every drawdown in S&P 500 was followed by a monster rally (it is now up over 30% from its April lows in just 3 months). Every time SO was "underperforming" for a few months, was following by a monster year.

Here is an extract of the interactive table showing best credit put spread options strategies (from Monte-Carlo simulations POV) for ETF's as seen from my web site math-trading.com :

Yes, IV still reflects future expectations. But for many stocks, those future expectations have been very different from the previous cycles. Macro events like tariffs can add or remove uncertainty to the global markets. This is why VIX jumped to 30+ when Trump first announced the tariffs, and this is why it kept going down gradually when the markets realized that things are not as bad as initially thought. And now it's back to the mid teens after few major deals have been announced. But even when this macro uncertainty is removed (or significantly reduced), there is still specific event risk like earnings. In case of SOFI, all previous cycles priced at least 14-15% move. So why this cycle would price only 10% move, even with reduced macro risk? The earnings are still there. And btw, if you look at the morning of earnings, SOFI moved 17% at the open (it retreated later, but this is not the point). So the market was very wrong in pricing earnings so low. Also, when you enter a straddle during periods of high VIX and VIX goes down during the life of the straddle, it has a negative effect on the straddle price. This kind of "mispricing" happened a lot in the last few months, and this was the main challenge.

Great analysis, and with candor and transparency, too. Thank, Kim. The comment about directional trades did resonate with me, as I have been watching them from the sidelines, or had modified my own trade away from the official. Directional trades probably have their place in a basket of strategies. However when they deviate from the core thesis, it's a red flag for me. Many such trades started out delta positive right off the bat, with no (or not enough) room for error - just the hope that the stock would revert if it went south (pun intended). Somewhere in my basket of wisecracks is a saying that goes "Hope is not a strategy". In such cases I tended to stick with the original thesis, which worked better, or at least add a simple hedge - one that is understandable by the lay person - kind of like like we do with our Double Diagonals, where a calendar is added to mitigate the non-movement of the stock. Taking the loss on a bad trade and moving on is another thing that traders tend to postpone, and then find themselves in trouble. The persistent red values in the daily trade log that present themselves hour after hour and day after day tend to make traders obsess over recovering from them which takes away time from finding potentially successful new trades. Someone had mentioned a while ago, and I agree whole-heartedly, that there is a psychological cost to staring at ugly red losses on a continuous basis. I personally tried this "different" discipline earlier - that is, mostly sticking to the defined max loss and/or profit targets - and my trading became more fulfilling, the losses smaller in number and value, and profitable trades more numerous. Even the moments of depression were fleeting when the closed losing trades were put aside in the cumulative trade log, leaving the active log looking a whole lot healthier. The wonderful thing about SO is the thinking, back-testing, discussion and evolution that have formed all the core strategies, and this time is no exception, I'm sure.

Hi all, I see there are multiples questions about the website, i figure i will create a dedicated thread to answer all of them. Link to the website : https://www.volatilityhq.com/payments/confirm/1/?coupon_code=SO502509 (you need to create an account first). For members of this forum, there is a 50% forever coupon is SO502509 and must be redeemed by Sept 30 2025. The 50% discount will be applied for as long as you keep your subscription (please make sure to update your credit card if it expires). FAQ: How can i contact you for support questions ? How much do you charge ? Why are you not using paypal ? How can i cancel the subscription ? Is there a documentation ? I'm not clear how to interpret the charts. Why is the website not free anymore ? I would like to see X feature to be implemented ? Can you do it ? Where are you getting your data ? Can i share a screenshot of the charts from https://www.volatilityhq.com on SteadyOptions forum ? Do you charge sales tax ?