hi Chuck i don´t close the trade when i get a Schwalbe, i make my t+0 as flat as possible to get PREPARED for an exit with minimal loss BUT the exit might not happen (only 3 exits but 8 Schwalbe !). I exit a trade when it´s below -5%. And i need to have the possibility to make adjustments, when the price is going up again which happened more often then an exit. There are not enough events (only3) to develop a system to stay in the trade. Too risky. It´s all about risk and reducing risk is the best you can do.Second question: You said you automatically close down the trade when you get a Schwalbe. I was wondering if you were late in the trade (less than 14 DTE say) and the T+0 line was starting to rise into the A fly, it would seem to be a nice opportunity to possibly harvest some of the potential theta in A and get a much higher profit. I expect this situation will probably not happen very often, but wanted to see if under this condition you might stay in the trade after an alert? Thanks again, Chuck
hi Chuck when i do this version, why should i stay in the trade ? then better closing it. And at the moment i think about it.Hi Igi, A couple more questions: In one of your presentations you talked about an alternative adjustment to the one above. Although the alternate doesn't raise up the right side as much and keeps some of the sea of death, it does create a very nice profit area below the sea of death and decreases fat tail risk. You could still address the SOD later on and/or even roll in the shorts on either side of the V to decrease the widths over time. With the volatility we have now, especially with the China deal, it would provide a broader profit zone. Just wanted to get some insight into your thought process. Thanks, Chuck
hi MichaelHi Igi,
I plan to subscribe to your Schwalbe service when it starts in December, but would like to use SPX. Meanwhile I have few questions please.
- Will SPX work instead of /ES?
- When a Schwalbe signal occurs you said you wait until next day to see whether the crossing below the -5% line indeed occurs or not. I live on the West coast and can only watch the market during the 1st hour after opening and then I need to go to work. If no crossing happens during the 1st hour, but happens later on it means I will miss acting upon it. Can this be a big problem? I guess it can. What can be done to solve it?
The direct link is https://aeromir.com/schwalbeOK, found it: it's on the home page under Real-Time Trading.
Simon, I’m not sure what problem you or Igi are talking about. My SPX option chains at IB are spaced in 5 increments.I would not mind trading this strategy ever two months, but as Igi has pointed out 5 point strikes is the problem, I will contact IB and try to find out why they are not available.