Hey Matt, thank you for

    Posted by sydney on 25th of Jan 2022 at 05:55 am

    Hey Matt, thank you for your video on your spy system, it is amazing!!! You have put in a lot of effort in analysing, scripting and testing. From a system point of view you are the first that have this kind of perfection. I also follow another trader who has a system, almost to perfection as well, but it is not automated, though he has the ability to do so, but I think he does not want to lose his skills once he automates his system. I have also seen a few other good systems over the years and yours is excellent with statistics. I may try to trade a larger position.

    One thing I am confused is this

    " For first entry trades I target a delta of 0.6, for 2nd entries I target a delta of 0.5, and for rare 3rd entries I target an even lower delta below 0.5. The thought process there is that 2nd and 3rd entry options have a higher probability and thus I I can buy options with lower delta to give more leverage."

    If the 2nd and 3rd entry options have a higher probability (because spy is stretched), why not use 0.7 or even higher delta instead of lower 0.5 delta? Higher delta gives you more leverage. I do follow John Carter who likes 0.7 delta for higher leverage.

    Sydney…it is because the later

    Posted by chartboy on 25th of Jan 2022 at 07:00 am

    Sydney…it is because the later entries, the lower Delta trades, will have a higher gamma. The option's gamma is the measure  of the option’s rate of change of the Delta. 

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