/biz/ - Business & Finance

>>15604905
Interactive brokers
who's your broker?

>>15604991
thanks.
Just looking to paper trade

>>15604905
https://www.cboe.com/delayedquote/quote-table
you can get current prices from this

>>15605028
Best trade I had made 4400% you got any questions?

>>15604905
Learn about options here
https://www.youtube.com/user/tastytrade1/videos

>>15604905
...

>>15604905
OP is still...
a faggot

>>15604991

Interactive brokers has option charts?

Fuck me. None of the brokers I've tried before had them. They all told me the only place to get them was to pay for a special data feed from CBOE.

>>15606472
>Interactive brokers has option charts?
Yup it only works with trader workstation desktop app.

You tried trading options?

>>15606542

I've traded options in the past, mainly just on the VIX. I was planning to start again in October. Planning on buying some calls on GOOG before earnings on the 25th.

>>15604905
Charts or prices?

If you read any introductory options book, they will show you charges for standard (or complex) options strategies.

But if you're going to trade options, charts become kind of useless because they give you a twisted sense of confidence. The best way is to just grab the raw pricing data and crunch it through your own excel routines.

Theres no such thing as Long term options.
wtf?

>>15606581
There are, sort of. They call them LEAPS. But in reality, whether you're trading long term or short term, they operate the same.

>>15606560
>I was planning to start again in October.
I recommend the SPY LEAP options
900 days to be right.
I made 14% in 50 days trading the 400 DEC 21 options

Best trade I had in the past closed at 4400% profit.
They are liquid enough to trade around your position as well.

>>15606581
https://en.wikipedia.org/wiki/LEAPS_(finance)
Also look at the image
>>15606602

>>15606580
>charts become kind of useless because they give you a twisted sense of confidence
Charts work for me
>The best way is to just grab the raw pricing data and crunch it through your own excel routines.
Are you using black sholes to calculate prices?
What excel routines do you recommend?

>>15606626
> Black Sholes
No, I'm probably one of the few people in the world who doesn't trust Black Sholes. This is for a few reasons...

1. The formulas were originally based on European style options, and I don't trust how they were converted to support American style.

2. The formula (at least in my opinion) is fuzzy as to it's outcome. Mostly it's used to backward calculate a theoretical volatility.

So while it's good to know what they are (especially if others are trading based on them), I've never found them to be useful.

> what excel routines
Here's an example of how I look at things. I forget the exact date or which stock, but it doesn't matter. Basically I go to an options page (on etrade in my case), pick an expiration date, drag and copy all of the data, and then push a button in excel which reads/translates/populates.

The big thing this does is to calculate the break-even prices for calls and puts of different strike prices.

A mistake I made when I first started was to look at a stock at, for example, $20, think it's going to go to $25, and then buy a $25 call. This was a mistake because when you start looking at break even (also taking into account the round trip commissions), many times your most profitable options purchase would be in an entirely different strike.

In the example I show, look at the break even for the calls (left side) between 247.50 and 249. In that case, any of them have the same breakeven, though some would cost you almost $2000 less.

>>15606626
>>15606714

And the formulas themselves aren't that hard. The advantage of Excel is that you can just do a shitload of math very fast. So once you have things set up, it's all pretty automated.

For example, to calculate the break even of calls, you simply need to know the cost of trading (including the per contract cost) and a few other things.

The entire call side of this graphic is based on two simple custom functions I wrote in the workbook:


Public Function CallOptionTotalCost(ByVal StrikePrice As Double, ByVal OptionCost As Double, ByVal NumBought As Double, ByVal IncludeExercise As Boolean) As Double
Dim TempOut As Double, FeeCost As Double, ExerciseFee As Double


TempOut = 0

If NumBought = 0 Then GoTo 100
If OptionCost = 0 Then GoTo 100

FeeCost = OptionCostPerTransaction + (OptionCostPerContract * NumBought)

TempOut = (OptionCost * NumBought * 100) + FeeCost

If IncludeExercise Then
TempOut = TempOut + OptionExerciseFee

End If
100:
CallOptionTotalCost = TempOut

End Function
Public Function CallOptionBreakEven(ByVal StrikePrice As Double, ByVal OptionCost As Double, ByVal NumBought As Double, ByVal IncludeExercise As Boolean) As Double
Dim TempOut As Double, TotalCost As Double, X As Double, FeeCost As Double
TempOut = 0
If NumBought = 0 Then GoTo 100
If OptionCost = 0 Then GoTo 100


FeeCost = OptionCostPerTransaction + (OptionCostPerContract * NumBought)
TotalCost = CallOptionTotalCost(StrikePrice, OptionCost, NumBought, IncludeExercise)

TotalCost = TotalCost + FeeCost
X = TotalCost / (NumBought * 100)

TempOut = StrikePrice + X
100:

CallOptionBreakEven = TempOut

End Function

>>15606714
to unironically summarize
you pick a price range that you think the stock will goto then calculate the strike you need to buy based on price minus the option cost and fees?

Do you hold to expiration or trade around your position, selling some to get your money back.

>>15606626
And once you grab the data into excel, you can other things, like finding out if it's worth selling covered calls.

>>15606731
Thanks for the code

>>15606757
You doing options for income?
What's the biggest return you've had?
How much duration do have in the options you trade?

>>15606752
Basically. I guess what the price will hit, and then look to see which strike will give me the highest percent return if that price is reached. Sometimes, if I'm not sure I will go for a lower strike just to give me wiggle room. But I always make sure that the break-even price is the main thing I look at, not the strike, and not the price of the options.

> do you hold til expiration
Not if I can avoid it. When you get close to expiration, the time decay goes pretty fast. In a perfect world I would buy options that are 2 years out, and sell in 6 months. That way, you lose almost nothing to the time decay, and you still have enough time premium left on them to make them worth more than the intrinsic value.

>>15606782
My favorite return is when I had an moment of clarity on the brexit vote, and turned into a one day trade worth as 37% return.

>>15606782
> Duration
Duration is something you have to go with a feeling on. If, for example, the dow goes down 400 points one day, and you think it will recover 1/2 in the next few days, you might go with options that expire at the end of the week.

It's riskier, because if it does you lose; but if it DOES, you make more because options that are a week out a lot cheaper.

However, if you think stock X is going to go up (or down), but aren't sure when, you might buy options further out (months or years), to give yourself wiggle room.

>>15606787
>In a perfect world I would buy options that are 2 years out, and sell in 6 months. That way, you lose almost nothing to the time decay, and you still have enough time premium left on them to make them worth more than the intrinsic value.

This is my model, I just trade around the position and hold profits in the form of options and waiting for them to moon. If the end up expiring worthless meh.

>>15606804
>one day trade worth as 37% return.
Awesome you trade the currency etf?
If your looking for price targets this guys stuff is amazing.
https://www.armstrongeconomics.com/blog/
http://ask-socrates.com

>>15606867
No, I don't know enough about currency to feel comfortable about it. And I've seen enough forex horror stories to know well enough to stay away.

That one day return was a matter of luck and paying attention to the news.

Prior to the brexit vote, everyone was saying vote "no". The politicians, the celebrities, the media. A no vote was priced into the market, and everyone (at least in the media) was expecting it to be an easy no.

Then, on the day of the vote, two news stories came out....

>9:30 AM
Even though it's illegal for the media to talk about exit polls while the polls are still open, four brokerage companies had placed exit poll workers in the country to get a jump on the outcome of the vote.

>2:30 PM
Four brokerage houses (the same 4, if you had been paying attention) all announced a special rule limiting the number of British Pounds they would allow customers to sell in the next few days.

As soon as I saw the second story, I knew the vote was going to be yes, so I bought $DIA puts that were expiring within a week. The vote was announced, the dow tanked, I cashed out.

>>15606897
>so I bought $DIA puts that were expiring within a week. The vote was announced, the dow tanked, I cashed out.
Sweet trade

>>15606731
>excel retard
>how the fuck do i use this

>>15606910
It was. It was like one of those moments of epiphany you hear about. I've only had a few in my life, but it was like the clouds opening, the sun shining down on me, telling me "here's a freebie for paying attention"

>>15606917
It's too late in the evening for me to go through the whole routine, but check out this link:

https://www.dummies.com/software/microsoft-office/excel/how-to-create-custom-excel-functions/

basically you're creating a custom function, and it will act like any other function. So, for example, if you have an option with a 14 strike that costs 0.35 and you don't want to include the cost to exercise, you could input a formula in a cell:

=CallOptionTotalCost(14,0.35,1,false)

>>15606934
>It's too late in the evening for me to go through the whole routine
Thanks for the info anon

>>15606917
>>15606934

Oh, those formulas use a few constants. So you should paste this at the top of the module. This is e-trades costs, so it might be different from your broker.

Public Const OptionCostPerContract = 0.75
Public Const OptionCostPerTransaction = 6.95
Public Const OptionExerciseFee = 4.95
Public Const StockTransactionFee = 6.95

>>15606787
You can just look at the sensitivity of the options, it will tell you all you need to know. The more out of the money your option is, the higher you delta. Also regarding exercising: Never hold your option until maturity. As you said, time decay eats a lot of the value especially in the last days. You should sell the option 1-2 weeks before maturity. Here again, check the sensitivities (theta).

Black Scholes is fundamentally wrong because it assumes constant volatility across different strikes which is not the case. You should only use this formula to calc implied volatility given the market price.

>>15606958
I pay attention to the greeks, but I'm not married to them as a lot of people are. That being said, I did like Dan Passarelli's book on the subject

>>15606917
>excel retard
>how the fuck do i use this
Learn
VBA (Visual Basic for Applications)
https://www.excel-easy.com/vba.html

>>15606971
It depends what your investment goal is but they are usually very helpful. Most people trading options are not really trading the underlying but rather the volatility of the underlying. If you want to trade volatility, you better hedge your greeks accordingly.

>>15606993
How do you trade options?
I either:
Sell puts at high implied vol, then buy back at lower IV
Buy calls on low IV and trade around position based on underlying price moves.

>>15604905
Best thread on biz, have a bump

>>15607649
>Best thread on biz
Sup Nigga.
You trading options or wanna learn more?

>>15607730
Just wanna learn. I have a finance background but have never really traded options before (partly because of trading restrictions from work). Now I finally attained neet status so would like to start trading

>>15606560
>VIX
Jesus Christ you people are retarded.

>>15608009
>Now I finally attained neet status so would like to start trading
I recommend watching https://www.youtube.com/user/tastytrade1/videos

The best trade to start is to sell a put on a stock you want to buy.

I'd make each position no bigger than 20% of your cash, less if possible.

Do you like any markets?
Mine is SP500, Gold, Silver, Junior minning.

>>15608020
>Jesus Christ you people are retarded.
yeah why would you trade something that is mean reverting with no default risk.

>>15608037
Thanks for the advice. Is tastyworks a good platform for trading options?

>Do you like any markets?
My current portfolio is US and Asian equities, silver, gold and some long term treasury bonds.

>>15608115
>tastyworks a good platform for trading options?
I prefer interactive brokers just look for fee's IB is very good value.
>My current portfolio is US and Asian equities, silver, gold and some long term treasury bonds.
I'd start by buying long dated calls on something you like. I'd say SPY.
buy 4 when they go up by 25% sell 3 keep 1.
See the older posts long dated options give you more time to buy and sell around a position.

Any other questions?

>>15608115
Or do SLV calls
The trade in the image below is
$0.35 -> $1.00 in about 30 days
it was cheap to put on one contract only costing $35 and I had until JAN 21 to sell the position.
>>15604991

>>15608134
Do you make a living from options trading? Do you stick to simple strategies or also more advanced? What was the 4400% trade like?

>>15608279
>Do you make a living from options trading?
Not yet but within less than 5 years I should be able to.
> Do you stick to simple strategies or also more advanced?
I started with simple and stick with simple
>What was the 4400% trade like?
It was fun 1 trade increased my portfolio by 7%
It was a small amount in absolute terms and proved that I could make massive gains with 0 real risk. I had traded around those contracts so my cost basis for them was 0.
44 X 44 = 1,936
3,000,000 /1,936 = $1,549
So in two chained trades I can hit my end goal of $3MIL starting with $1500.
I already have a position that could pay off 44X again with 0 cost basis.

You ever tried trading?

>>15608279
>You ever tried trading?
Sorry I thought you were a new poster for some reason.

>>15608303
Martin Armstrong has a super computer that makes price predictions and it's really accurate. He has 6,000 years of economic data in there. I highly recommend you read his stuff. That's where I got the trade idea that went up 44X. It was just buying long dated options on SPY. I sold them at the absolute top before expiration, because his model said SPY would pull back for 6 months and it did!
https://www.armstrongeconomics.com/blog/
http://ask-socrates.com

>>15608303
Would be pretty amazing to make it just from 2 trades.

>>15608335
Actually I saw you talking about Martin Armstrong in another thread and started reading his blog which I found very interesting. I am not exactly sure how to use his model for trading, can you explain? What is ask-socrates and how is that related?

>>15608426
>Would be pretty amazing to make it just from 2 trades
Fun indeed and totally possible I made another trade that went up 26X

I am not exactly sure how to use his model for trading, can you explain? What is ask-socrates and how is that related?

He has a computer that does analysis and gives price levels for buy and sell signals here is a basic one about gold

"Gold has come into a high ahead of the Benchmark in Silver and it has already elected 3 Daily Bearish Reversals. Technically, a breach of the 1455 level will signal further weakness and a weekly close back under 1400 will warn that we should see that last correction we have been warning about.

As you can see, we have had a major divergence with rising prices but declining Energy which warned that there was not a breakout underway just yet. Yet energy has turned negative showing that there has been a lot of liquidation. Holding the 1455 level will warn that we can still retest the resistance.

Caution is required for despite what everyone has been cheering, there is a lot that needs to be constructed for a sustainable rally. That is on the horizon, but not just yet."

TLDR sell gold related investment on strength.
I did that and sold near the high. That's how I timed the recent 300% silver trade.

>>15608490
>He has a computer that does analysis and gives price levels for buy and sell signals here is a basic one about gold

Does he post these on the blog so you just follow there or is it some separate service?

Thanks for all the replies anon

>>15608527
>Thanks for all the replies anon
Glad to help, it took me years to learn this so its nice to share.
I'm hoping it'll save you time while you make it.
>Does he post these on the blog so you just follow there or is it some separate service?
He does the very basic ones free on the blog.
The ones I use cost $15 a month, which is nothing really.
You should be able to write it off as a tax deduction anyway.

Pricing is at
https://ask-socrates.com/Compare

You can watch interviews with him on youtube

I'd watch this documentary about him
https://1337x.unblocked.nz/torrent/1267790/The-Forecaster-2014-HC-720p-WEBRiP-READNFO-XViD-AC3-LEGi0N/

>>15608527
If you can deal with the text to speech voice this explains the system pretty well
https://slideplayer.com/slide/4124067/
here's a longer video explaining the model in detail
https://chadanon.s3.amazonaws.com/armstrong.3gp

>>15608572
>>15608681
Awesome, you have saved me a lot of time and frustration, thanks! I will have a look at these. Hope you catch that next 44x soon. Looking forward to seeing more of your posts and more of these kinds of threads on biz.

>>15608774
good luck anon
I wish you well in your trades.

https://vimeo.com/123519884
https://vimeo.com/user26700862