Advance order – 1st trigger OCO

I like TOS platform as it allow me to automate my trades.

1st Trigger OCO usage 

automate my trade.PNG

Simple steps to put an advance order to let the market fill at my preset price and then trigger auto contingency order to take profit or stop loss order at my preset price. So that I can do more option trades with lesser time.

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Enhance Option strategy to protect capital

SL

Met a friend at an Option seminar organised by TDAmeritade, he was sharing of his naked put and covered-call strategy (P-C-P strategy).

Personally, I think the US market is overvalue and there is a need to protect one’s capital by using defined risk option strategies.

Realize that not many like to do the adjustment as it is tricky and the probability of successful adjustment can be 50-50. So use defined-risk option strategies is good enough in my opinion.

For friends still doing selling naked put option, do consider using defined risk or/and adjustment to protect your capital.

Back Testing Weekly Option on SPY

backtest SPY

The above is the result of back test of SPY using delta neutral strategy.

Assumptions

  1. Weekly option open on Monday
  2. Premium collected around $0.15
  3. Close on the last day market close
  4. Loss is calculated base on the different of the 1 SD and closing price
  5. Strategy used is Delta neutral (Strangle or IC with $2 wide spread )

Observation

  1. The 17 trades resulted in a net loss
  2. Undefined risk or wide spread protection will result in higher loss
  3. Winrate 82% but the 3 trades loss can wipe out the profit
  4. Commission will result in a bigger loss

Conclusion

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.

 

 

The importance of ISP

SH

Green ISP had been giving me lots of problem recently, it render me unable to put in option’s order or even close existing orders. Contacted both TOS and Green ISP and both finger point to each other’s infrastructure.

TOS

Decided to change ISP during the recent IT Show in Singapore 16-19 Mar 2017 and chose Orange ISP company after evaluating the price, performance, track record and feedback from other Option traders.

M1

Next month I will crossover to the Orange ISP.