Posted by mattsox05 on 7th of May 2014 at 01:38 pm
Hello all - anyone using options to trade the mechanical systems
? If so, I'd like to hear how your doing with the strategy.
Currently, my strategy is to go long call spreads (and vise versa)
close strike,,, 2 points out, with a 4 point differential - 30 days
minimum to expiration.
Posted by pjwhiteley on 7th of May 2014 at 03:36 pm
I use options only for the mechanical system. My avg
profit is 30 percent. To scal out I with sell some contracts, or
sell all and replace,with a strike further,out in time and/ or
price. I use a 2 to 3 week expiration. seems like we start
scaling out after just a few days.
Posted by pjwhiteley on 7th of May 2014 at 07:48 pm
For the mechanical system I buy right at the money tostart.
After a runup, I sell and Buy new contracts just out of the
money. Sometimes I roll out a week farther too if I have been
in the trade a week or more.
Posted by spytrader on 7th of May 2014 at 04:02 pm
Just started BPT recently, looking to fine-tune my system. I've
also been using long SPY options, $2 ITM, 30-60 d until expiration
and have been closing with profits of 20%-ish. Sounds like you are
going OTM? Also, how are you managing stops? I've been moving them
to b/e at 10% gain but I'd love to know if something is working
well for you too.
Posted by pjwhiteley on 7th of May 2014 at 08:01 pm
With the mechanical system I don't buy a lot of time, just 2
weeks or so. That keeps my cost down. I buy just out of the money
or at the money.Right away I put in a limit price at a 30percent
profit. I watch the one hour chart. if the 5 moving average
trend line starts moving against me I lower my price to a 20
percent profit. That is as low as I ever go.
I never use stops, instead I use a straddle if the market moves
against me. This works for me because I never use more than 3
percent of my capital on any trade. This way I never lose sleep.
I don't know if this is the way for anyone else. After 4 years
of trading, this is my system that works for me. hope it
helps you.
its nice...for this last trade of SPY PRO you sould bought jun14
187 call at 3.06 and soldl jun14 189 call at 2.53, total debt:
0.53..or you want more spread ?
Posted by mattsox05 on 7th of May 2014 at 02:38 pm
I actually bought the Jun 189 calls (as you stated) and sold the
Jun 193 calls - I did the 4 point wide to capture the bigger moves
the system catches..
If the market moves substantially higher, like 192 and the
system is still long, I will roll the position up as long as the
system remains long.
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Using options to trade
Posted by mattsox05 on 7th of May 2014 at 01:38 pm
Hello all - anyone using options to trade the mechanical systems ? If so, I'd like to hear how your doing with the strategy. Currently, my strategy is to go long call spreads (and vise versa) close strike,,, 2 points out, with a 4 point differential - 30 days minimum to expiration.
Any thoughts ? Or recommendations ?
Thanks
Options only
Posted by pjwhiteley on 7th of May 2014 at 03:36 pm
I use options only for the mechanical system. My avg profit is 30 percent. To scal out I with sell some contracts, or sell all and replace,with a strike further,out in time and/ or price. I use a 2 to 3 week expiration. seems like we start scaling out after just a few days.
anyway I am finding it very profitable.
pjwhiteley
Posted by mattsox05 on 7th of May 2014 at 04:25 pm
How far away from at the money are your strikes ?
Right at the money
Posted by pjwhiteley on 7th of May 2014 at 07:48 pm
For the mechanical system I buy right at the money tostart. After a runup, I sell and Buy new contracts just out of the money. Sometimes I roll out a week farther too if I have been in the trade a week or more.
Details please, pjwhiteley?
Posted by spytrader on 7th of May 2014 at 04:02 pm
Just started BPT recently, looking to fine-tune my system. I've also been using long SPY options, $2 ITM, 30-60 d until expiration and have been closing with profits of 20%-ish. Sounds like you are going OTM? Also, how are you managing stops? I've been moving them to b/e at 10% gain but I'd love to know if something is working well for you too.
Details
Posted by pjwhiteley on 7th of May 2014 at 08:01 pm
With the mechanical system I don't buy a lot of time, just 2 weeks or so. That keeps my cost down. I buy just out of the money or at the money.Right away I put in a limit price at a 30percent profit. I watch the one hour chart. if the 5 moving average trend line starts moving against me I lower my price to a 20 percent profit. That is as low as I ever go.
I never use stops, instead I use a straddle if the market moves against me. This works for me because I never use more than 3 percent of my capital on any trade. This way I never lose sleep.
I don't know if this is the way for anyone else. After 4 years of trading, this is my system that works for me. hope it helps you.
pjwhiteley. Thanks for your input
Posted by mattsox05 on 7th of May 2014 at 09:39 pm
Interesting legging into a straddle to hedge the loser, never thought of that.
thanks for sharing, great info
Posted by spytrader on 7th of May 2014 at 08:52 pm
its nice...for this last trade
Posted by pointa on 7th of May 2014 at 02:26 pm
its nice...for this last trade of SPY PRO you sould bought jun14 187 call at 3.06 and soldl jun14 189 call at 2.53, total debt: 0.53..or you want more spread ?
is that ok ? Steve , Matt..what do you think ?
I actually bought the Jun
Posted by mattsox05 on 7th of May 2014 at 02:38 pm
I actually bought the Jun 189 calls (as you stated) and sold the Jun 193 calls - I did the 4 point wide to capture the bigger moves the system catches..
If the market moves substantially higher, like 192 and the system is still long, I will roll the position up as long as the system remains long.