SBatch

It appears to be a bull put credit spread, no?

Thanks for the info. The issue with TOS doesn't surprise me. They don't smart route, but rather funnel heavy order load to the exchange where they get the largest incentive. Therefore, they often have inferior execution as their orders only sit at one exchange (similar to eTrade and eOption).

For a back-test to fall victim to curve fitting it would need to have way more variables than this strategy. Here the strategy is the stock and how it reacts for thirty days after its earnings release (regardless of its quarterly results). There is no place where curve fitting can be introduced, everything is static. It definitely can be applied to other stocks, it's just a matter of finding them. I use http://stocksearning.com/ to locate stocks that have consistent 7 day trends after earnings and then they can be back-tested in the Trade Machine to determine if the trend holds for 30 days. I would imagine we could find 5 or so that we can use each earnings cycle.

TSLA only beats 33% of the time so this would significantly reduce trading opportunities. Also, the decrease in the stock price during the session after a miss also works to help this strategy in the following 30 days.

Good info. The ORF is .0465 per contract and the OCC clearing fee is .05, so that makes sense. Still a massive savings for everyone as most seem to pay between .50 and 1.00 per contract. I've had the same issue with OX regarding unbalanced flies, however a call to the margin department does result in margin relief. Have you tried contacting the trade desk regarding this? Also, what has been your experience with execution? Thanks.

No problem at all.

I'm not sure what this is referring to. I was asking him about the type of spread transactions he was concerned about not about how he derived the annual expense.

The VIX problem is not uncommon among clearing firms. SPX/RUT probably could be remedied by using SPY/IWM as there are no commissions with Tradier so the larger contract level would not be an issue.

Yes, Apex is growing and becoming a bigger player. They have recently brought on some high level executives from Pershing.

Which type of transactions? I would imagine that is a product of Apex (their clearing firm) and not Tradier.

Yes, $3 is nothing to AAPL in both directions. Let's keep in mind AAPL is up about 60% in the last 12 months and we are heading into seasonal weakness for equities in general. The thesis is that AAPL will grind higher, meaning gyrate in both directions for the next month or so and end around $150 which would be a 2% gain for the underlying between now and then. A very reasonable scenario for a stock in a grinding uptrend.

A couple reasons. I chose the June short strike as it gives me a very solid premium in comparison to the May. Also, I see APPL grinding up from here and not making a strong upward move so it gives the spread time to reach full profit during the next 45 days. If I am correct and we are in the $150 area near June expiration (or a bit earlier), the long leg Sept expiration allows me to roll the June short leg to July for an additional premium if the setup is still favorable. This new spread short leg will expire before AAPL reports again so I will close the entire spread near or at July expiration. Choosing September over August for the long leg also reduces some of the theta drag as we got near July expiration.

I bought a bullish diagonal on AAPL - short the June 150 calls and long the Sept 135 calls for 12.15.

I will be opening an account with Tradier (even though I love OptionsXpress and will be keeping them as well) as the no commission offer needs to be tested in my opinion. Here is my rationale: 1. $40 a month for unlimited option trades will add between 10% and 20% to the annual return if execution is consistent with IB/OX. 2. I think it will be based on order routing history. I have attached the order routing for both IB (as most members use them) and Tradier. Tradier sends its order directly to market makers (with Citadel handling about half the option orders) whereas IB sends directly to the exchange. This would be a deficiency if we were trading high frequency equities, etc. but is not a deficiency when trading option spreads with limit orders. Citadel and the other MM's that Tradier uses employ very sophisticated smart routing technology which is very similar to IB. Here is the Citadel description: "We act as a specialist or market maker in more than 3,000 U.S. listed-options names, representing 99% of traded volume2, and rank as a top liquidity provider on the major U.S. options exchanges, executing approximately 37% of all U.S.-listed retail volume, making us the industry’s top wholesale market maker". Therefore, when we extrapolate further, the Citadel routing is even more diverse than IB with regard to the amount of exchanges. Also, IB's routing to the Boston Options Exchange which they have a very large ownership of (a clear conflict of interest), continues to grow. 3. The Dynamic Trend Option Dynamics platform accessible through Tradier, is one of the absolute best option platforms available. I have used OptionVue, ONE, Option Work Bench and others and Option Dynamics beats them all. They offer superior skew charting, spread future price projection, spread builder, theta decay charting and other modeling components superior to the others. Furthermore, it is fully integrated, meaning not only can you trade from the platform but there is also a real time portfolio window that shows holdings with P&L etc. found directly in the platform. Therefore, there is no need to move back and fourth between Option Dynamics and the Tradier website (like with ONE). I have not used Option Dynamics with Tradier yet so I still need to determine if there are any pitfalls. If we go in under the SO offer, the platform cost will not be discounted. However, for me the free option trades is a 10 fold savings over the $250 monthly cost of the platform. I will report on this thread once I am active with Tradier at some point in the 3rd quarter. Tradier Order_Routing_Disclosure_2016q4.pdf 1Q_2017_IB_ORDER_ROUTING_REPORT.pdf

I think so as well. I'm not interested in bleeding theta after a stock has made its large post earnings move.

See my edit above.

I don't think taking a neutral position would work well long term (but we can find out via the TradeMachine!). I personally would only initiate a directional position.

Ignore my AAPL comment, momentarily thought they already reported.

This is how they recommend using the 7th day predicted move: Predicted Move (Volatility) - 7th Days Expected volatility on 7th day since Earnings results. Why is it Important? Higher Upside reaction on 7th day If historical price change on 7th day is higher than price change on next day, stock tends to gain more from Earnings result. It supports Buy In Post-Earnings strategy. Lower Upside reaction on 7th day If historical price change on 7th day is less than price change on next day, stock tends to give up from next price gain. It supports Sell In News strategy. Further Downside reaction on 7th day If historical price change on 7th day is less than next day drop, stock tends to drop even more from Earnings result. Less Downside reaction on 7th day If historical price change on 7th day is less than next day drop, stock tends to recover from next price drop. It supports Buy In Dip strategy.

http://stocksearning.com/ (same link I shared with you before) will show where the underlying historically trades 7 days after earnings. There are definitive trends with certain underlying equities. The shorter time frame would require a more aggressive strategy than you use with TSLA, but of course the potential gains are realized much more rapidly.

I really think the Tradier offer needs some serious consideration. They route to Citadel and Knight (Citadel would handle most if not all of the option orders) who both have very sophisticated smart routing technology so execution should be solid. The Option Samurai platform is very user friendly and may be quite helpful for those with limited experience in option trading. The unlimited trades for the modest monthly fee I find remarkable. It would be good to hear recent reports from any of those who are currently trading with Tradier.

Not Java, but the Java plug-in. My guess is you are using Internet Explorer or Firefox on a PC that is not running Windows 10. If you have Windows 10 you are out of luck with iVolatility.com.

A major issue of iVolatility.com is their reliance on Java plug-ins. Their P&L calculator will not work without the plug-in and as of March no modern browser supports it any longer due to security issues. Otherwise, I like iVolatility but the plug-in issue was a deal breaker for me so I cancelled my membership.