Watch HowardCohodas Trade Index Options Credit Spreads

[HowardCohodas]

How do you come up with this cr@p? "Oh poor me, they'll always say I don't have enough experience to teach. Boo hoo!".

People are saying that you can't teach because you have very little experience and because it is clear that you haven't got a clue what you're talking about.

It might also be highly suspect that you wanted to teach from the moment you started trading, but we'll leave that aside for now.

But don't misrepresent what others have said. Saying that your few months in the market is not enough is not the same as saying you will never have enough experience.

I have demonstrated more ability to teach than you have to judge. So why should I care what you write except for its amusement value. And that value is rapidly approaching zero or perhaps not even that good.

So many of your posts are deleted, who could possibly perceive you as having any credibility.

 

[robster970]

See inline Howard - I'm off to bed as I'm knackered so will catch up tomorrow.

So what are the odds I will unconditionally surrender?
ZERO

What are the odds my account will die?
ONE

What are the odds I will ever have enough experience to teach?
ONE

For the empiricist in you:

Probability of account death = 1-Probability of experience to teach being attained.

 

[Pazienza]

I've got to say, all joking aside, I love this thread. Thanks Howie, you've given us all a lot of fun. I actually wish you well, and I do mean that.

Maybe it's because I haven't stopped laughing since I read "as useless as t1ts on a fish". Or maybe it's the booze talking, or maybe one of the four types of non-prescription drugs I've taken today, but I'm feeling very mellow. And I'm feeling a lot of love in the forum tonight.

Relax with The Quireboys:

http://www.youtube.com/watch?v=JrQY_xFsS8U

http://www.youtube.com/watch?v=cGvL-fLBtOU&playnext=1&list=PL490091DE623A538D

 

[HowardCohodas]

See inline Howard - I'm off to bed as I'm knackered so will catch up tomorrow.

No worries. Around here it is always groundhog day.

 

[HowardCohodas]

howard your posts are about as useful as tits on a fish. your only utility here is for the purpose of epicaricacy.

At least I'm useful. What's you justification for consuming planet resources.

 

[Pazienza]

At least I'm useful. What's you justification for consuming planet resources.

Can't you read Howie?

"howard your posts are about as useful as tits on a fish"

That on it's own justifies a man's life on this earth. If you don't get it, try saying it out loud, it will sound even funnier.

 

[Jack o'Clubs]

Howie - can you explain how the Probability of Touching calc differs from delta. I assume delta is one of the main inputs, what are the others? What does PoT tell you that delta doesn't?

 

[scose-no-doubt]

Howie - can you explain how the Probability of Touching calc differs from delta. I assume delta is one of the main inputs, what are the others? What does PoT tell you that delta doesn't?

SHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!

 

[HowardCohodas]

Howie - can you explain how the Probability of Touching calc differs from delta. I assume delta is one of the main inputs, what are the others? What does PoT tell you that delta doesn't?

Not with certainty because PoT is proprietary. However it is easy to discover some of the attributes of this relationship.

If you look along the options chain you will discover that the relationship is not linear between the two except in small ranges. Furthermore, if you look at different volatility regimes, you will discover that the same relationship does not hold at the same level of PoT.

All my testing has been on PoT. I have suggested that one can use delta as a proxy. However, after the investigation I did to come to the above conclusions, I will no longer go that far.

BTW, for those who care about such things, I prefer Howard. Thanks.

 

[HowardCohodas]

SHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!

O ye, of little faith.

 

[Jack o'Clubs]

Not with certainty because PoT is proprietary. However it is easy to discover some of the attributes of this relationship.

If you look along the options chain you will discover that the relationship is not linear between the two except in small ranges. Furthermore, if you look at different volatility regimes, you will discover that the same relationship does not hold at the same level of PoT.

All my testing has been on PoT. I have suggested that one can use delta as a proxy. However, after the investigation I did to come to the above conclusions, I will no longer go that far.

BTW, for those who care about such things, I prefer Howard. Thanks.

But you've said that before you found ToS's PoT*, you used your own proprietary calculation and it was so similar you just went with ToS PoT. So you must know roughly how reliant either is on delta as an input?


* Tosspot - what a brilliant acronym for Think Or Swim's Probability of Touching.

 

[Black Swan]

But you've said that before you found ToS's PoT*, you used your own proprietary calculation and it was so similar you just went with ToS PoT. So you must know roughly how reliant either is on delta as an input?


* Tosspot - what a brilliant acronym for Think Or Swim's Probability of Touching.

repped you for the acronym...not for the infantile bullying that occurs on this thread...as you were..

 

[HowardCohodas]

But you've said that before you found ToS's PoT*, you used your own proprietary calculation and it was so similar you just went with ToS PoT. So you must know roughly how reliant either is on delta as an input?


* Tosspot - what a brilliant acronym for Think Or Swim's Probability of Touching.

You are correct. However, my decision was based on the area where I intended to trade, i.e. <25% PoT. I must admit, I did not explore any farther that than. I used the usual components that go into the various options valuation models. The primary effects for the range of interest are volatility and days to expiration. Secondary and tertiary effects are good for completeness, but given that PoT is an estimate, they have smaller practical value for the strategy.

 

[scose-no-doubt]

O ye, of little faith.

 

[Jack o'Clubs]

To cut to the chase, if you replaced PoT with delta%, would it materially change the trades that you are taking?

If so, then TosSpot is the source of your edge, and if I were Goldman Sachs I would immediately buy ToS to get my hands on their proprietary market-beating algorithms, or hire you into their quant team. Well done Howard, you've found a winner.

If not then your strategy can't possibly work in the long run unless you strongly believe the market is systematically mis-pricing option volatility.

I think that's now my last post, as I'm aware I'm not saying anything different here to a multitude of other posters with collective decades of options market experience - if you don't get it now you never will.

 

[DashRiprock]

To cut to the chase, if you replaced PoT with delta%, would it materially change the trades that you are taking?

If so, then TosSpot is the source of your edge, and if I were Goldman Sachs I would immediately buy ToS to get my hands on their proprietary market-beating algorithms, or hire you into their quant team. Well done Howard, you've found a winner.

If not then your strategy can't possibly work in the long run unless you strongly believe the market is systematically mis-pricing option volatility.

I think that's now my last post, as I'm aware I'm not saying anything different here to a multitude of other posters with collective decades of options market experience - if you don't get it now you never will.

i think when i skimmed the thread before somewhere was something about tosspot being confidence levels...

 

[Jack o'Clubs]

repped you for the acronym...not for the infantile bullying that occurs on this thread...as you were..

I think to be fair, Howard enjoyed a huge amount of goodwill on this thread up until the point when he said he was going to write a book and start teaching. The forum's collective gloves came off at that point.

 

[HowardCohodas]

To cut to the chase, if you replaced PoT with delta%, would it materially change the trades that you are taking?

If so, then TosSpot is the source of your edge, and if I were Goldman Sachs I would immediately buy ToS to get my hands on their proprietary market-beating algorithms, or hire you into their quant team. Well done Howard, you've found a winner.

If not then your strategy can't possibly work in the long run unless you strongly believe the market is systematically mis-pricing option volatility.

I think that's now my last post, as I'm aware I'm not saying anything different here to a multitude of other posters with collective decades of options market experience - if you don't get it now you never will.

I think so given my tests were based on PoT and delta has a different relative value in different volatility regimes. So I can't say, just go with a delta of .10 to get an equivalent of a PoT of 20%. In times of higher volatility, the relationship is different.

Regarding edge... A constant, sometimes hostile discussion here. I have been unable to articulate it in terms acceptable here by both the knowledgeable and ignorant relative to options.

This is a summary, as I see it.

1. The mechanism of return is time decay.
2. Probability of letting a trade expire vs. having to close it (for gain or loss) is estimated by PoT.
3. After 126 trades, anecdotal evidence indicates that PoT "seems" to underestimate the probibility of closing the trade.
4. A key element in the strategy results is taking advantage of opportunities such as rolling in the same series.
5. Most of the loss control seems to be a result of judicious choice of short strike. Real money trading has only been during times of low volatility. Back testing and papertrading indicate that PoT properly adjusts to higher volatility. I will only have proper confidence when real money trading experiences higher volatility as well.
6. Some advantage comes from the time-space-market diversification elements of the strategy. I have not yet done the analysis to separate this into it's components.
7. The circuit breaker "should" prevent major losses in case of a black swan event. It remains untested using real money.

 

[Black Swan]

I think to be fair, Howard enjoyed a huge amount of goodwill on this thread up until the point when he said he was going to write a book and start teaching. The forum's collective gloves came off at that point.

JoC I've only popped my head into this thread a few times, my observation was not aimed at you as I know you're a 'grown up' and it's not your style to do the playground bullying *stuff*...

 

[HowardCohodas]

I think to be fair, Howard enjoyed a huge amount of goodwill on this thread up until the point when he said he was going to write a book and start teaching. The forum's collective gloves came off at that point.

IIRC, it was way before that. When it became clear that I intended to teach it upped the heat exponentially. It was still mostly worth it because I have learned so much by answering questions. I have not always acted gracefully, but I am a work in progress there as well.