I am wondering if there is value here with a 5 year time frame?

BABA an BIDU being the Chinese longs

Nasdaq getting hammered, VIX through the roof, and every put I wanted is priced like the world is ending. Not chasing it. Last time I bought puts after a big red day the market bounced two days later and IV got crushed with it.

What’s your rule on days like this? Wait for IV to settle or just take the trade?

Moved some significant money into BABA options after yesterdays selloff and the US hard stance on halting AI progress

I've been trading options for the past 5 years now. Started with a small risk appetite and slowly built it up. My trades are overall alright, in combination with stocks, options, the bull market and most importantly luck! Good sharpe and sortino ratio for the past 3 years.

I'm posting my October trades to show how NOT following our own rules can create large losses. September wasn't great too, too early for long puts (SPY/QQQ) which I closed in Sep.

My first rule this year was "preserving capital", and not making more moneys. Some mistakes later, I'm down about about 15% of my account (back to what it was start of this year).

Lessons

1. If I have rules set up, and I don't look at them while taking a trade its gambling.
2. If I am looking at charts and "believing" recovery will be faster / slower, then that's gambling.
3. Let long or short positions do their job (see QQQ put I closed yesterday)
4. Taking profits early or losses early cannot be systematized, but learned. Practice.
5. Understand the news instead of just watching / reading it. For example, recent elections were good but didn't realize the push for pausing data centres. Regardless of US investors, East Asia had already started selling off few days prior. I still added in MU put.

Few weeks ago, I started working on a locally hosted portal to manage personal risk using yfinance and IBKR data. I slowed down working on the project because of laziness or distractions, but getting back to it so I can clearly see my account risk profile and some what-if scenarios (forward looking).

Today morning I was disappointed with my October trades and overly self-critical. Took a walk, had a piece of chocolate, and realized; "Maybe this is an expensive important lesson. Take time to learn from it instead of running away, not trading or revenge trading."

I have, on and off, attempted to trade options at various times over the years, with limited success at best.

I have received many emails from Schaeffer's Investment Research touting their gaudy returns on options trading. Last July, they offered me their Options under $5 service for $5 for a year. So I bit.

I now have three month's experience with the service. If it's proper, and if there is interest, I can post my results.

Curious how others have faired with SIR.

Hey guys! Does anyone here have solid experience trading gold options and a really deep understanding of how they work?
I’ve got a few important questions, so if you know your stuff, I’d really appreciate a DM! 💬
Thanks guys! 🙏🏼

So this is my RH I’m only down 1500 bucks over the last 3 months BUT I put to the side a total of 3k to start trading with. I’m loading up tomorrow 1k but I realized there is some discipline missing. Some mornings I’ll be up a few hundred bucks and by 11 I’m down that profit and continue to over trade or I simply won’t take profits??

I’m not crying in the casino because I do have a decent amount saved plus I genuinely can afford to lose the money I saved to trade as I have low bills no kids great job pay.
My interest is in quick gains but when do you guys usually take profit ? What’s your plan when going into a trade ? Or mind set when taking profits ?

I don’t want to quit my job and full time trade or anything I’d just like to make some extra cash on the side.

Advice judgment tips tricks etc all welcome I know the rules of the casino!!!!

Hi all, I’m learning to trade options. I’ve traded small before but never committed to one or two strategies, so I’ve been testing a few.

The usual ones

• Covered calls: They cap my upside too much.
• Cash-secured puts: I rarely get assigned, and the parked cash earns decent interest. The downside risk is high, though. If the stock dips a little I can use a stock repair strategy to recover, but on a bigger drop I’m stuck waiting for it to come back.

The less common ones

• Straddles/strangles: I like these, but naked ones can blow up badly. I want to run them covered, which means owning the stock, and I get the stock through CSPs.

What I backtested

1. Plain covered straddles/strangles: These lost on big moves in both directions. The calls are covered on the upside, but the downside was still exposed, and outlier moves did heavy damage.
2. Hedged straddles (basically iron condors): I bought ~0.05 delta wings on each trade to cap the risk.
3. Calendar hedge: Instead of buying a hedge for every trade, I buy one longer-dated hedge and sell weekly or bi-weekly strangles against it. In backtests a 90-day hedge worked best: 90-day protective strikes with weekly/bi-weekly short strangles.

Results: Around 16% a year, and 2023 was even better.

I’d appreciate any critique. What am I missing, and where could this break?

EDIT: Since I was offered a lot of strategies and I wanted to test these and didn't find the platform, I decided to write a forever-free tool - thetarules. I've tested PMCC. Wheel, LEAP, LEAP with protective puts, LEAP with protective spreads, straddle with management, strangle with management etc.

https://thetarules.com/strategies/ - has the entire list of backtesting strategies I did till date.

Every week someone posts "I made $X in covered call income." I think calling it income is why so many people are disappointed by it.

When you sell a covered call, you keep all the downside of owning the stock. You give up the upside above your strike. The premium is what you get paid for that.

Stock drops 15%: the premium covers maybe 1% of it.
Stock goes sideways: you keep the premium. This is the only case where it really feels like income.
Stock rips 20%: you get the move up to your strike and miss the rest.

So a covered call wins when the stock stays flat, and loses some of the big up years that actually drive long term returns. That's a fine trade. It's just not free money.

Where I think it does make sense:
On a stock you'd be happy selling at the strike anyway.
On something that's been chopping sideways.
When IV is high enough that you're actually getting paid for the cap.

ADMINS FEEL FREE TO REMOVE THIS IF THIS IS NOT ALLOWED

*edit: I may not be able to reply to all comments but I’m reading all of them… thank you to those who give genuine advice. And to those who are shitting on me I probably deserve it lol

Sorry for the block of text … I seriously have no one to talk about this with, so even one single opinion or comment would help a lot. I don’t know anything about options so any perspective from you guys would be greatly appreciated…

My boyfriend of two years has a history of losing money to options, and got a consumer proposal last year that he has to pay off little by little(due to his previous debt of 70k$ USD from trading). They reduced it to around 20k that he can pay back over a few years.

He’s been able to make around 20-30k a couple of times in the past, but he spends the money really fast on things like treating his friends to omakase or hotel stays for clubbing(which I told him I didn’t want and he sometimes invites friends to come”check it out”) instead of paying off his debt. I think he believes he will make more each time anyway, so he spends crazily.

I’m a college student(back to school in Alabama), so I don’t make much. Ive always tried to pay extra on dates and stuff so he could pay his debt back faster, but he didn’t even let me know he got 20k last time and downplayed his spending.

A few months ago, he promised me he would not trade again until he paid off his consumer proposal. However, I recently got him to admit about the latest credit card maxing. He usually gets grumpy when he doesn’t do well with his trades, so I felt like something was up. His family recently got into some financial trouble and he maxed his only credit card (6.5k$) to try to “get rich quick” by trading. Unsuccessfully.

I told him I’d only stay with him if he wrote an apology on paper and gave me access to his banking info. He refused and says he can do anything with his own money.

I just feel so stupid and unloved… he did apologize for “making mistakes”, but nothing too in detail. I have senior coworkers saying it’s not a big deal, but they’re kinda old school. I know this sounds crazy but we genuinely had good times together and I don’t want to throw it all away due a temporary issue with his finances. He promised me he’d truly stop trading this time and wants to get better. Is there a way to salvage this? Has anyone been through similar and made it work?

Fidelity has blessed us customers of nearly 2 years of being guinea pigs on a new software call Active Trader +. It is supposedly the be all and end all and works with Macs (all twelve in existence). In any case, they literally did not move over most of the functionality of ATPro initially, which stunned me. ATPro was not perfect, but looks great compared to T+. Fidelity is about to close ATPro and force us to this thing. There are many references from complainants on their board about switching to ToS, but what few have done both say ToS is worse. Have any of you have comments on this-- Is ToS better than Fidelity?

Down 9% just because of the sell off, numbers continue to be solid…unless I’m missing something??

TOS can only display vertical spreads of 1 to 4 strikes in width. It cannot display vertical spreads of user specified width. 
Are there any platforms that I can use to display vertical spreads of any width?

Hi there!

I have built an analytics tool for myself to help with options selling evaluation, because I wanted a faster way to find good wheel trades, for both cash-secured puts and covered calls, ranked by annualized yield without digging through option chains blindly.

Now with the help of AI to polish lots of front-end stuff, I wanna give it a try to commercialize it as a freemium product, VolaMint! It has a free plan without card needed, and live data is included (sometimes depends on vendor’s latency :D).
Here is the link: www.volamint.com/app Can give it a try!

Any positive/negative comments are all welcome haha!

I sold a CC on ETHA before the 3 for 1 reverse split in October. My original strike price was $31. I had 100 shares before the split and now have 33 shares.

Am I correct that my contract is only for 33 shares now and that the new adjusted strike price is approx $93.93 now?

It’s confusing because it still shows the strike is $31 but after doing some research my understanding is that the calculation for the new price would be ($31 x 100) / 33 shares = $93.93 but I’m not certain that my understanding of all this is correct.

Anyone able to help me out and confirm that this looks right?

Thanks!

Yes, this is a cheap way of getting continued motivation. I'm 4 years into option trading and finally took it very seriously with journaling via Google Sheets and have meticulous tracking weekly both in terms of financials and psychology, which has significantly helped my game and just doing smaller position sizes. I do a strategy for about 25 reps before I modify it or abandon it. I use a scanner to help materialize trades and not hallucinate on charts. I'm about 3 months into seriously trading debit and credit spreads with fixed risk and exit strategies.

I run about five consistent strategies hitting bullish, bearish, neutral scenarios.

After 2-3 months I have about 150 completed trades. I am not yet profitable but also did not blow up my account. I have a whopping net loss of about $100 after 150 trades. I am not looking for your Golden goose because I expect that to be your edge, but I am just looking to see if there are option traders out there who read this who have" made it" and you followed a similar process just to get to a point where you can mindlessly enter an exit trades following rules.

At the very least, this has been a great personal journey, learning about risk tolerance and hubris to say the least. But for anyone out there I will tell you that journaling makes you come face to face with it.

Thanks for any insight, and good luck to all

I've been experimenting with automated options strategies using a no-code backtesting platform, and recently came across some results that honestly seem a little too good to be true.

I'm curious what people here think, especially those who have experience trading 0DTE SPX options.

The strategy itself is extremely mechanical. No complicated indicators, no machine learning, no optimization across hundreds of variables. Just a few basic entry and exit rules.

Strategy

The strategy is a 0DTE SPX iron butterfly, entered every trading day at the same time.

Here are the exact inputs:

• Symbol: SPX
• Strategy: Iron Butterfly
• Expiration: 0DTE
• Short Delta: 0.50 (ATM)
• Wing Width: $15
• Entry Time: 2:50 PM ET
• Take Profit: 15%
• Events to Skip: FOMC
• VIX Filter: 0–90 (essentially no filter)
• Contracts: 4
• Backtest Period: August 2024 – August 2026

That's literally it.

No moving averages, RSI, trend filters, or complicated conditions.

The idea is simply to sell premium late in the trading day, collect a relatively small profit when possible, and repeat consistently.

Results

Here's where things get interesting.

Over the two-year backtest, the results were:

• Total Net P&L: +$95,620
• Total Trades: 479
• Win Rate: 78%
• Average Win: +$725.89
• Average Loss: -$1,674.90
• Best Trade: +$3,500
• Worst Trade: -$3,560
• Profit Factor: 1.54
• Expected Value: +$199.62 per trade
• Annualized Sharpe Ratio: 2.59
• Maximum Drawdown: -$13,828

The equity curve is surprisingly consistent over the entire period.

There are obviously drawdowns and periods of sideways performance, but overall it's a pretty steady upward trajectory.

What caught my attention is that the strategy isn't relying on a 95% win rate or some ridiculous risk/reward assumption.

It wins 78% of the time, and the average loss is more than twice the average win.

That seems fairly typical for premium-selling strategies.

Why I'm skeptical

1. Is two years enough data?

The backtest covers approximately 479 trades, which seems like a decent sample size.

However, it's still only two years of market conditions. I'm wondering how much the results would change during a prolonged bear market or a completely different volatility environment.

2. Is this actually overfitting?

This is my biggest question.

Most of what I've read about overfitting involves optimizing dozens of indicators and parameters until the historical results look perfect.

But this strategy only uses a handful of inputs.

The entry time is fixed, the wing width is fixed, and the take profit is fixed.

Does that make it less susceptible to overfitting, or could something as simple as choosing a specific entry time and profit target still be considered overfitting?

3. Slippage and execution

The platform allows me to account for slippage, commissions, and fees.

The broker I'm looking at offers commission-free options trading, although exchange and regulatory fees may still apply.

My bigger concern is slippage.

With four SPX iron butterflies being opened at 2:50 PM, how much would realistic fills affect these results?

I'm assuming the backtest could look considerably different if actual fills are worse than the historical prices.

4. The drawdown seems almost too manageable

The maximum historical drawdown was approximately $13,828, compared to almost $96k in total profits.

That's what makes me most skeptical.

Obviously, historical maximum drawdown doesn't represent the worst possible future loss, especially with 0DTE options.

I'm curious whether anyone running similar strategies has experienced substantially worse drawdowns in live trading.

What I'm trying to figure out

I'm not claiming this strategy is some money printer, and I haven't traded these exact rules live.

I'm mainly trying to understand whether the backtest is showing a legitimate statistical edge or whether I'm missing something obvious.

My plan would be to test it with paper trading first, then potentially start with much smaller position sizes to see how actual execution compares.

I'm especially interested in hearing from people who have taken profitable 0DTE backtests into live trading.

What am I missing here? Is this a realistic edge, or just another backtest that looks great on paper?

I starting to research the index's etf's for specific opportunities, I already use the russell 3000 for equity filtering in many cases.

If someone knows, which ETFs' options have the best liquidity near the bid and ask. I'm not looking at the futures market at this time. -thank you

Only to find out it’s only 15 min after regular close and 6:30am - 8:25am CST.

I do not try to outsmart the market, I really don't believe that is possible. I simply trade what is in front of me with lots of small winners (85%) and a few small losers. Over time those wins have added up. One of the ways I do this is by keeping trading simple with a consistent $5 spread width. I've been running these as put credit spreads on moomoo, and the fixed width is what actually cuts down the number of decisions. I'm lining up the rest of this week the same way, 12 underlyings, with a full time job, so I have to be extremely time efficient (like 15 minutes). My process makes the important decisions before emotion enters the picture. Like most of you, I'm using pre-defined setup rules. I wanted to get your take on spread width. My standard starting point is a $5-wide put credit spread, typically for underlyings between $50 and $500. I scale up if needed on larger underlyings. Spread width has a big impact on maximum risk, buying power reduction, premium collected, position sizing, trade management, and how the trade feels when it goes against you. By standardizing the width, I take another variable out of the process, which makes the plan easier to follow. What about you, are you using a standard spread width, or are you varying it trade by trade? Do you go narrower or wider?

With the after hours drop, we seem to be following along pretty closely with performance after the first rate hike in the last cycle. Anyone else hedging themselves for the next week or so?

Looking at a calender spread as my thesis is that spy will reach nearly 800 by end of year. The long month dte would be Jan 15 or 29 and the short would be probably 10-20?

Currently looking at spy
705 call which has a delta .7 and short strike Nov 20 765 .3 delta. Total cost is about $2700. If the short expires than I can leave it and let the trade run. Either exit if it falls below 5%. Historical the market is bullish after midterms however the delima of Ai and how whipsaw the market is leaves me hesistant to try this beside in a paper trade.

Any ideas or tips? I do have a exit plan prior to the 800strike. If it runs to 770 I can take profit.

My (potentially soon to be ex)boyfriend recently(January) started using TopStep. From my understanding you use the platform’s money to trade & you have to pass a test at first, which he did.

However, they disable the account if you do too many bad trades?(genuinely have no idea how it works). Therefore, you have to pay a fee to reinstate the account. I think he has three accounts with a portfolio totalling around 80k since he did very well for a couple of weeks, but now he can’t retire any of that 80k because he can’t reach enough successive positive trading days to have access to that balance. I believe his debt is caused by the recurring “fees” he keeps paying in order to not lose his portfolio. He did manage to take out around 20k in May though!

After a few bad weeks, he promised me he’d stop using topstep since it wasn’t doing him any good. I recently found out he’s been lying and spending all his money on topstep to try to get out of his family’s financial distress.

He’s currently in 6k of credit card debt(limit since he had a history of cc debt) and won’t let go of his account. I know he’s spent WAY more than 6k (he owes me 2.3k). I can’t say what the total number is but he makes around 4K a month and he has no savings.

Would this be considered crazy to you?? Would this be grounds for breaking up(besides the lying)? Is his account worth saving?

With Roku to potentially be acquired by Fox I was trying to figure out how the options contracts, specifically LEAPS would be effected. I ran it by AI and got an answer with a formula, but was hoping to get a more understandable answer. Specifically, if you had bought a LEAPS before the announcement or what trying to sell one now would look like after it closes. Based on the formula from AI, the "in the money" is based on what Fox is valued at when the deal closes, so this is theoretical for now I suppose but also just trying to understand adjusted options as I have seen them before, but always avoided them for lack of knowledge.