porgie

Also depends if you are selling shorts right at the money of course. If you sell the delta 30 calls instead I wonder if the performance would be better over a long bullish cycle. Also if you are really bullish one could go with 1/2 ratio on the shorts---I wonder what the performance would be with 1/2 ratio at the delta 30 shorts, but then again I am drifting away from the discussion on "pure" covered calls.

@gf58 A quote from your post above "The best solution just seemed to be to throw an order for a single combo in several dollars below the mid/down at insult prices and then patiently step you way up..once you get a hit/establish the actual market mid you can then scale in from there. Not rocket science but its an improvement I never would have captured if I hadn't been launching my own trades and making myself focus on one thing at a time." That seems to capture the essence of getting into some high probability trades. I also learned if I have the time to keep an eye on the computer---is to adjust your entry price to reflect a decent RV throughout the trading session. Another new lesson "learnt". See if others agree---say for instance a stock with reasonable liquidity has an RV of 5.0 on an earnings straddle 6 days prior and the median RV is usually 6.0--you also note RV stays relatively flat up to earnings and median T-0 RV is 5.5---so the setup looks good. The stock is trading at 100.00 at the open---so you place an entry straddle order a little bit low ( the 5.0 RV entry would be 100*.05= 5.00), so you start at 4.90-4.95 or so---now the stock goes to 105 a few minutes after the open. So the new entry at RV 5.0 would be 105*.05= 5.25. I've learnt to adjust the entry price a bit higher to get into some winning trades---in this case I may ratchet up gradually to 5.10-5.15 or so to see if I can get filled at a still reasonable RV. Perhaps at a smaller allocation, then scale in if the price comes back as you mentioned. Thoughts from the group?

@gf58 I went ahead and ran my numbers and I thought they looked good: So for the month of August with just one trading day to go I have closed on 8 SO trades----for me there were 7 winners and one loser. Overall performance after commissions was 8.75%--please see explanation below as I have already closed 2 active open SO trades. I have already closed out CPB and KR for my profit targets and they are still open trades with SO---the main reason for closing these early is I will be spotty next week at being able to monitor the trades--my big winner this month was the TLT trade. In addition using SO trade theses and using smaller allocations ( because I am still learning ) for these trades I added another 1.3% after commissions with 7 winners and 2 losers and actually the 7 winners came after the 2 losers--so 7 in a row. If I had used the usual allocations I use for SO official trades the gain after commissions would have been 6.3%. My losers on my own trades were: BYND through earnings hedged straddle X 2, Winners were ZM pre-earnings calendar, PTON pre-earnings calendar, BBY earnings straddle, ZM pre-earnings calendar #2, ZM pe-earnings calendar #3, and CRWD pre-earnings Cal, and PTON pre-earnings calendar #2 Obviously I am more comfortable with the pre-earnings calendars than the straddles, but my comfort level is growing with time on screening for the straddles. Next to try to learn better over time is the ratios--note I have not traded any of these on my own as I do not feel I have studied them enough to really understand how to pick high probability winners. The real reason for my post is not to boast but to show other new members what learning the strategies and being patient and selective with entering trades can do to increase the odds of winners and add to overall returns/success So overall a gain of 10% on the month--not bad for an amateur.....I think many others probably did better than this.... P.S> I am also in the Anchor Trades on EFA, IWM, and SPY and these are also doing quite well

Congrats @gf58----7.8% in one month!!! Lets see--even 7%/month computes to 84% gain on capital on a year of similar and not unachievable months. Thanks for sharing and here's to more similar months!!

@yalgaarHello. Obviously it is your money and your time--and ultimately you decide what works best for you. I joined SO late last year. What I cannot understand is how you are not in profit since you joined. Something seems wrong to me. Are you "chasing" trades to get fills? When I started I definitely did this and took some small losses if the entry and exit points were difficult. But then I became more patient and would not take a fill 1% above the official posted price. As far as exits--I would set some profit targets and scale out of trades--this has worked well also. By being more patient many of the official trades I participate in actually get better fills as the prices do fluctuate. If the trade gets posted and runs away I skip it altogether. I would say that has happened roughly 20% of the time as I have become more disciplined. But is that not good trading anyway? If you are trading on your own you set a price you are willing to pay before you enter and if the trade is not giving you that price you walk away. In addition you do learn to do some trades on your own as you become more comfortable with the setups. You also learn to do modifications of the original official trade setups if the underlying price changes quickly. The professionals here are trying to show us how to put the odds more in our favor when we initiate the trades based on the underlying thesis and that does lead to more wins and profits. (At least it has for me) Another big factor is the Covid 19 wreaking havoc with the volatility of the market--thus the classic setups are more difficult to find currently. So my pep talk is to hang in there--stick with the thesis and strategies. Develop your own trades using the recommended tools. This will become a profitable venture for you as it has for hundreds of other subscribers.

From the Horse's mouth Best execution? Another little-known aspect of zero-commission trading pertains to the execution of a given trade. Before, when brokers charged commissions for each trade, they often were promising a best possible execution, meaning they prioritized time and therefore share price of a security. As zero commissions became industry standard, brokers now go for the cheapest option to execute a trade. Steve Sanders, Interactive Brokers’ executive vice president of marketing and product development, said its zero-commission option — known as IBKR Lite — gets lower priority than its paying IBKR Pro customers for execution. “If it’s IBKR Lite with zero commissions we do what the other brokers do, we send them off to a market maker just like everybody else and there’s payment for order flow that comes back and you may not get as good of an execution,” Sanders said. “If its IBKR Pro you’ll get better execution.”

I like averages as we can exclude the outliers if we wish.

Even though you posted this 3 years ago--I joined CML TradeMachine and was reading through the blog and came across this and it seems like such great advice for newer members such as myself not to "chase" trades much beyond the midpoint of the market---I have gotten much better at walking away from trades that will not fill me at the mid or better.

I am surprised the "relief rally" has lasted this long and taken the S&P 500 as high as it currently is. One would think it cannot sustain this for very much longer. Feels like a "house of cards" adding too many floors while the Covid-19 virus is chewing away at the foundation. Look out below.

Great idea. As a healthcare provider today was quite remarkable. We finally have some US study data rolling in and do not have to rely as much on data out of China. The remdesivir trial results were the first true potential "game changer" since the outbreak started--especially for critically ill patients although the mortality data did not reach statistical significance there was a clear trend toward lower mortality and further population studies with larger cohorts of patients are needed. In addition the problem literally from day one has been our lack of testing capacity. We were previously only able to "ration" testing to the population with the "sickest" profiles so the denominator was confounded by a low sample size and the most ill patients being tested increased the deaths counted in the numerator--therefore making the death rate appear much higher than it will ultimately be. As an analogy imagine if no person had ever had an influenza vaccine and a particularly virulent strain circulated in the US--the number of deaths would likely be in the hundreds of thousands, but the overall death rate in all those infected would perhaps be in the 0.2 to 0.4 percent range. This is very likely the Covid-19 scenario--time and additional studies will tell. "Herd immunity" and/or effective treatments are the key concepts to pay attention to. Thus enough penetration of a population through exposure to a pathogen followed by recovery and immunity or mass vaccination are what is needed. Ultimately we will likely have a "hybrid" of exposed and vaccinated individuals to achieve herd immunity. Interestingly there is a team at Oxford that has a true head start on the vaccine as they have been working on other coronavirus ( SARS and MERS ) vaccines for quite some time and there are already very promising results coming out of that lab which may shorten the timetable to mass vaccination to late this fall. There is another reason for increased optimism--that is antibody treatments. As we can test more individuals for antibodies ( and this is really crucial ) we can develop a global pool of antibody rich plasma to treat very ill patents with and also determine our "herd immunity" status. There is a lab in the San Fran area that has already synthesized an antibody to a Covid-19 receptor protein and this is being studied in trials as we speak. If the synthetic antibody is effective we will have millions of doses to treat patients with. So the progress in the medical war against Covid-19 is developing very rapidly. I think we all have a lot of reason for optimism at this point. As for the markets--many of you are so skilled and talented at looking at them. I am just a rookie. But from a medical standpoint it does appear the market may be pricing in a bet that some of the medical developments along with the Federal Reserve doing everything they can will hasten the recovery.

Thanks. That is what I thought. It seems like the calendars have been so cheap on the RV side lately we have cycled into a higher proportion of them which makes sense.

Just a quick question for the more experienced members. I have noticed that the overall official trade profile is pretty heavy on the calendar side currently--7 out of 9 trades. I realize this likely waxes and wanes as the trading opportunities present themselves, but in general is there usually more of a 50-50 balance between the earnings calendars and straddles. Thanks.

Truly excellent results year after year. How many traders would think 40 percent returns as subpar? Really incredible. Congratulations to Kim and his contributors.