Posts Tagged ‘ spx ’

One Mistake Your Broker is Glad You’re Making

Jul 29th, 2015 | By | Category: SMB Options, Trading Ideas, Trading Lesson
A common mistake that new and developing traders make in the options market is to trade strategies that involve high commissions relative to the earning potential. We often see newer options traders applying great options strategies to the wrong instruments. Option trading strategies that involve frequent management to control risk can be commission intensive. This is especially true if you’re using a multiple strike trade such as a butterfly, iron condor, or iron butterfly. Many of the popular options trading platforms that are available offer graphic analysis of options positions. Some also have an option that is not Read more [...]


Who’s Running The Ship?

Feb 5th, 2015 | By | Category: Guest Blog, Health and Trading, John Locke, Options Education, SMB Options, Systems Trading, Trader Development, Traders Ask, Trading Ideas, Trading Lesson, Trading Psychology, Trading Theory
When you think of a large cruise ship and the way that it’s run. Who runs the ship, the captain or the crew? If you’re like most people you would say the captain….. and you’d be wrong.  As you think about all the things that need to be done on the ship, keeping the engines running, taking care of all the wants and needs of the passengers, the entertainment, the food preparation, the cleaning, the navigation, the weather and all the moment by moment decisions that must happen in order to make the ship work; there is no way that the captain could be personally involved in even 2% of those decisions. If the captain were Read more [...]


SPX Ratio Spread: 3 Year Back Test

May 22nd, 2014 | By | Category: SMB Options, Systems Trading
I recently completed a third year of back testing the SPX Ratio Spread on the SPY Detector signals. Without any changes to the rules or the signals, 2012 had remarkably similar results to the previous two years which were much more volatile. Here is some documentation for this back test: PDF Overview: SPX Ratio Spread Back Testing Results - Part 2 Excel spreadsheet: Day-by-day: SPX Ratio on SPY Detector V1 Excel spreadsheet: Trade-by-trade ONE Export 2010-2012 Let me know if you have any questions. Feel free to email if you want updates on the testing and development of this system. Andrew Falde [email protected] Please Read more [...]


Options Back Testing Report

May 12th, 2014 | By | Category: SMB Options, Systems Trading
(Please note the following is based on hypothetical trades using historic data.) The SPY Detector signal has a 20 year history of successfully navigating the underlying price change of the S&P 500. The signal is made up of 5 sub-systems that follow trend and momentum using proprietary indicators. Each of the 5 underlying systems makes up 20% of the total signal. For example: If the signal is 20% long, then one of the systems is confirming the bullish trend and the other four are not. There are two basic facts about the SPY Detector signal. The market cannot make a significant correction without all five systems being Read more [...]


Back Testing an Options Strategy

Apr 16th, 2014 | By | Category: SMB Options, Systems Trading
Note: The following contains hypothetical results; simulated using historic data. As mentioned at a recent SMB Options Tribe meeting; a group of options traders are now working to back test a proprietary momentum signal using a variety of options trades. Several tests have come back with varying results... but we are seeing a common thread for options trades that show low draw downs and smooth returns. The following represents the current best SPX options application for this signal called SPY Detector. (click to enlarge)   We have five other options strategies currently being back tested on these signals. Read more [...]


The Case for Wider Option Spreads

Feb 10th, 2014 | By | Category: Options Education, SMB Options
When analyzing a vertical based credit spread, including iron condors and butterflies, the first question that usually comes up is where to place the short strike. In a distant second usually comes the question of where to place the long strike, that is how wide the spread will be. This leaves some analysis to be done on using more contracts for narrow spreads or fewer contracts for wide spreads. At first glance it seems to be a better deal to narrow your spread and double the number of contracts. This is a major misconception I had about credit spreads when I started trading and later discovered the real trade off which I will Read more [...]


Coming in to the final hour for the SPX ‘fly

Nov 9th, 2012 | By | Category: General Comments
This post is another in a series that we will be publishing which track the hypothetical performance of broken wing butterfly trades selected by Greg Loehr of Optionsbuzz.com. There's only a little more than an hour left in the trading day and the expiration of the SPX weekly options, but there's still plenty of action left in the hypothetical broken wing butterfly that I've been tracking in this blog. As I write this the SPX is printing 1385. The butterfly I identified last week is the 1385-1380-1370 put fly for a $0.35 credit.  Using the mark of the current option quotes the spread could be sold for a 75-cent credit, although Read more [...]