Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Hi Ron,
I refer to your posts #6474, #6476 where you mentioned MROI. As I am newbie, please let me know if my calculations given below are correct.
Your profit without commission was 1.5x50= $75. Taking $6.12 RT cost per option which you mentioned in other posts but I am not sure of, total commission is $30.6 for 5 options. So, the net profit is $75-$30.6= $44.4.
Your IM was $462. Initial cash will be 4x$462=$1848. So, the ROI for 9 days= $44.4/$1848=2.4%.
The MROI= 2.4$x 30/9= 8%.
Yes i understand your logic. But in someplaces the initial margin itself is very high. So high that margin's are generally not increased by the broker. In such cases your sl logic cannot be applied. If i were to apply your logic to my situation then i will lose 8X the premium collected. Let me give you a live example. I sold nifty 9200 Put expiry May @ Rs.43 and collected Rs. 3225 as premium. The margin blocked is Rs.24000. As you can see i cannot readily apply logic in my situation. I just wanted to know the premium value at the time your sl is hit, generally. Is it 2X, 3X ... of your entry price? My objective is to understand how you are willing to lose on a trade to achieve 95% win rate.
Hi,
Ron has given many examples in the thread especially in jpg format where you can see how the premium changes. There are some Excel files too on the old strategy.
In case of backtesting of 25 Jan 2018 example, you can see that with initial cash of 5xIM when the MM is close to 100%, the premium is almost half of the initial cash ie drawdown is close to 50%.
You can see some examples if you read even after page 600.
Regards,
Dilip
Has anyone been putting on new trades given the volatility in the market lately? Is there anything you're looking to change in your process based on the swings in the market?
http:/http://money.cnn.com/2018/04/03/news/economy/us-tariffs-china/index.html/money.cnn.com/2018/04/03/news/economy/us-tariffs-china/index.html
"US proposes tariffs on 1300 Chinese goods."
Hi,
For the past few days, SPX has been flirting with 200-day MA which is considered a brick wall. It traded below it also. If two lower highs and two lower lows are formed below 200 MA, then downtrend may be in place. But then will it affect the strategy here? I don't know. I am staying on sidelines till clear picture emerges which means may mean missing on this month's trade. I am not so much worried about the volatility but the possibility of downtrend affecting the strategy here.
Regards,
Dilip