Three professional option traders; Tom Sosnoff, Tony Battista and Tony Rihan.
They offer free subscription to Bob the traders signals (Tom and TonyB).
I open an account with www.tastyworks.com and link Bob the trader to my account so that I can get Tom and Tony’s option trades free for two years.
Below are some of their option trades in real time.
The above is the result of back test of SPY using delta neutral strategy.
- Weekly option open on Monday
- Premium collected around $0.15
- Close on the last day market close
- Loss is calculated base on the different of the 1 SD and closing price
- Strategy used is Delta neutral (Strangle or IC with $2 wide spread )
- The 17 trades resulted in a net loss
- Undefined risk or wide spread protection will result in higher loss
- Winrate 82% but the 3 trades loss can wipe out the profit
- Commission will result in a bigger loss
Even with stop loss for every trade or use 1 SD IC with maximum $1 loss spread will result in a loss and the commission will wipe out that profit. This option system is not workable in long run.
When HLF drop suddenly, I decided to pick it up and sell Covered Call. Modified slightly from Alan Ellman’s strategy (https://optionkaki.wordpress.com/2016/02/13/book-review-selling-cash-secured-puts-by-alan-ellman/)
Experiment on buy ITM options and 90 DTE with take profit set at 1.5 of premium. Commodities price on the uptrend buy one metal and corn. By buying ITM option reduce the extrinsic value thus Theta decay is less.
When to use OTM buy ? Strong move or very very long DTE. Return is higher and lower premium paid but probability of success is not high <25%
When to use ATM buy ? Balance between premium paid and profit return, probability of success is <50%
When to use ITM buy ? Short DTE. Lower return and higher premium paid but probability of success is higher <75%
Tested a weekly income strategy on SPY for two months and below is the result.
The flowchart explain it all.
Experiment with various Candlestick hammer signal for entry.
WFC market price was at around $51 and I decide to sell call option at $52 thinking it will drop further. The next day, my position was tested.