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Hedges are helpful in sharp downturns (and I have them in place now), but one of the simplest and fastest tricks is simply to buy back a short or two, the end result being net long puts. Yes, it is painful to realize the loss on the shorts, but some of that loss can usually be recovered if/when...

Hi Srini. My comments regarding "a skilled trader" did not relate to back testing in any way. This thread is very generic in the sense that it started as a discussion of making money with a weekly trading strategy, not as a back testing thread. I'm not a big fan of back testing, at least not in...

A skilled trader can make nearly any strategy or system work, but therein lies the rub. High gamma strategies require considerable skill in money management...knowing when to fold and when to hold for big gains. Straddle players can actually have positive expectancy with only a 30% win rate, but...

Hi Steph. Welcome! I appreciate your dilemma. You might also consider the RTT Service trading ES which uses SPAN margin. Much less capital required, but has consistent positive returns with an excellent equity curve, very low draw downs, and great performance metrics such as Sortino ratio...

Thanks for the SOSOTO post, Peter. Obviously medicine is not the only field to have incorporated that simple principle of on-the-job training.

Thanks, Bsp. It's always good to know that we are helping people make some extra money. That's our ultimate purpose.

AndrewS definitely has the right idea in terms of picking a strategy that you can live with and sticking to it until proven wrong. However, I would suggest that the game is not simple. If it were I would be hobnobbing with Bill Gates and Warren Buffet instead of trudging along in the trenches...

Thanks, Luke. Much appreciated. We do try to keep our proprietary documents "in house", and some documents are only meant for paid subscribers...like you. I know that some presentations I have done in the past are still floating around, and that is probably unavoidable. If I were more formally...

Hi Luke. Your thoughts are well-chosen and explicitly expressed. I noticed that the Expectancy PDF is a presentation I did many years ago while I was a mentor at another venue. The source heading on the PDF file says it came from SMB Options Tribe Meeting. I did not give this presentation to...

Agreed, Marcas. AS you may know, I was a mentor for Dan Sheridan for about 5 years. I always insisted that my students understand the concept of expected return. In fact, I gave a presentation on this topic at a seminar n addition to showing how to calculate and interpret the results. I always...

For obvious reasons, I need to "rise above the fray" on this issue. So, I will only give a general comment. Whatever system or strategy or combination of strategies are chosen, regardless of vendor or educator, it is critical that the trader plug some values into an expected return spreadsheet...

Thanks for the kind words, Myron. You have an interesting trading history. I don't know any successful traders who did not, at one time in their careers, suffer significant losses. In the mid-90's when I was learning to trade options with McMillan's book and the DOS version of OptionVue I once...

As Peter indicated (and, by the way, thanks for all your positive comments) the returns are somewhat dependent on the volatility environment. In periods of slightly higher vol it is not unusual to make 5% to 10% per cycle, with 7% to 8% as the average. Once (and only once, unfortunately) I "hit...

There is a good case for employing Occam's Razor (law of parsimony) here, I think. The graph (and history) SIMPLY shows that bad things happen in the market occasionally, but without any discernible periodicity. In other words, we over-complicate the markets by reading too much into historical...

I am biased, of course, but I suggest, based on your information, jrob, that you get a trial subscription to the RTT. It's very cheap, and it affords you the opportunity to watch our videos, see our many posts, see our Trade Entry Tool, and review our beautiful (again, I'm biased) equity curve...

TBY, you might be interested in subscribing to PowerOptions (poweropt.com) if you are interested in other options strategies. You can use their recommended criteria for a variety of strategies, or build your own.

OK, TBY. The best answer that I could give is that I would never launch a diagonal or calendar with an upside bias because both are long vega trades. So, as the market goes up, volatility falls, and the position is hurt by vega.

Well, the RTT usually makes decent money even in market rallies, so that is one of my upside strategies. I always study the SPY chart, looking for a long entry possibility. I tend to accumulate shares over time in a dollar cost averaging fashion, but I will book profits after a long run. Then, I...

Large upside moves are killers to diagonal spreads, since they are long vega positions. The back cycle leg will be hammered. An ITM short strike would also be hit by an upside move, although it would eventually lose its time value. Am I misunderstanding your question? Perhaps you could provide...

In the Reno-Tahoe area where we lived for many years (in the 90's) before moving to Santa Cruz some of the smaller casinos would purposely use just one deck and give extra benefits to players (mainly tourists) who usually lost anyway. Larger casinos have their own Monte Carlo simulation...