How To Build Systems That Are Less Likely To Break

In the Options and Systems Workshop, we are discussing ways to improve the reliability of our trading.

Three main themes of our weekly meetings include …

  1. Contrasting edges (e.g. expansion and reversion trades on at the same time)
  2. True diversification of exposure (low correlation of fundamental drivers) 
  3. Stress testing instead of optimizing (try to break strategies until you can’t — then you have something worth your time)

This past week, one of our members, Allen Spore shared a presentation on filtering VXX for defined risk options trades.

The filters and defined risk options create a double walled barrier of protection in what is otherwise one of the potentially riskiest trading strategies available.

Next week, we’re going to revisit the double-edge of premium decay and momentum with defined risk options trades.

The Options and Systems Workshop meetings are every Wednesday at 1:00 PM Eastern.

Sign up for your first-month discount trial and start watching the two-year library of recorded weekly meetings today.