What other kinds of strategies and management styles do you want me to test? Let me know in the comments! :) 🔥 START YOUR FREE 7 DAY TRIAL WITH MY DISCORD HERE 🔥 * Watch my video about the Discord here: th-cam.com/video/eN8_RBknhjk/w-d-xo.html * Sign up for your FREE trial here: launchpass.com/options-trading-with-scott/discord-member -------------------------------------------------- 🔥 START YOUR FREE 30 DAY TRIAL WITH OPTION ALPHA 🔥 * Watch my video overview of the Option Alpha platform here: th-cam.com/video/URDOSBK_DbA/w-d-xo.html * Begin your FREE trial here: optionalpha.grsm.io/y1pqhikwh1lg
I have just watched about 10 or 15 of your videos and I am wondering now that you're a member of option alpha if you couldn't do a 10-year back test strategy on the credit vertical spreads to see what criteria might do best. From looking at some of the other videos on TH-cam it looks like you need to have a Delta of over 70% and probably better maybe even 80 or 85 or 90 and implied volatility of over 50% but again as a newbie trader and just trying to understand not to make too many mistakes when I start out back testing sure seems like the right answer and being a retired I really don't have the technical knowledge or experience to even understand how to do a back test but I think that your channel would really enjoy understanding that seeing how a lot of us are small time investors and just trying to put a little extra money in our bank accounts thank you again for your wonderful courses and I really do appreciate all the work that you've done and again you've made me a believer of selling calls as opposed to being a buyer of calls or puts thank you again
Thanks for the kind feedback, John! I'll keep your video idea in mind and will try to do a backtesting video on credit spreads! Best of luck to you on your trading journey :)
Ok kid. It's adorable that you're learning to backtest and this comment is by no means meant to discourage you from doing that. Some constructive criticisms: Details are very important when backtesting. The smallest discrepancy can potentially render your results entirely invalid. In that context, a 0.05/0.5 delta put spread is not "the same thing as a naked put." 95% of the time it is pretty close, but that other 5% means that 1 in 20 days feature outsized moves that should have an outsized effect on your final returns and you are excluding them from the results. This could be making your results more inaccurate than you might think. Additionally, assuming the spread is equivalent to the naked put, this test still does not at all prove that selling puts is better (which we'll define as "makes you more money than") than buying calls. It proves that over the last 10 years (which is easily the worst 10 year data set in stock market history due to the distortions from QE) a strategy of blindly selling delta 0.5 puts on a rolling monthly basis, rain or shine with no regard for what the business cycle looks like, what's happening on the news, seasonality factors, macroeconomic factors etc... produced superior returns to blindly buying delta 0.5 calls. So you proved that one dumb strategy makes more money than another dumb strategy. lol If you want to make a better judgement of put selling vs call buying you would need to compare them to each other when both utilized at least adequately, if not optimally. Like compare them to each other with entry on bullish breakout above resistance with increasing volume with reasonable profit and stop loss targets, for example. The way you use backtesting to learn something useful is to test a full strategy that you would actually consider trading live. You can look back and see how consistent the signals like moving average crossovers + MACD positive blah blah would have performed in the past. Which even then is practically useless if the near future is going to be significantly different than the past you're using as your source of data (like now). Anyway good luck have fun
Thanks for the feedback! Here's some constructive criticism for you... If you're going to offer unsolicited criticism to someone, it's best not to come off as a condescending asshole in the very first sentence. If you do so, it makes the person receiving the feedback completely disregard all of it because of their contempt for you and condescending assholes in general. But thanks anyway for your adorable little essay :)
nice video, thank you very much Scott. do you have a modified service that work for someone who works 8-5 ? if you had a service that emails you what you bought sold each day would be great. alot of people don't have time to be in the discord all day. thank you again.
As of right now, I only offer the Discord service. However, I would argue that's even better than a daily email service. With the Discord, you will get realtime updates on everything that I'm trading in addition to other daily trade ideas, trade tips, getting answers to all of your questions, and more. Even if you're only able to check in on things a few times a day, I still think it will offer a lot more value than a daily email. And don't forget you get a free 1 week trial when you sign up, so there's no risk in trying it out for a few days :)
Thank you for the video, Scott! I'm looking forward to the other ones as well. Possibly jumping ahead and making a prediction on a future video in this series, I'm guessing selling options will overall be better than buying them for the reasons you mentioned. At least the risk of any losing trade is lower. Would like your thoughts on which is better: cash secured puts or covered calls.
Covered calls carry greater profit potential because you keep both the call premium and you can gain on a rise in the stock price. But I also would use cash-secured puts first to eventually take assignment of the stock at a lower price…and get paid to do so! So bottom line is I don’t think one strategy is necessarily better than the other…I think they work best when used together. Hence, the wheel strategy! :)
@@scottreesetradinginvesting7936 Wheel strategy has worked well for me so far even in the down market except for Walgreen's (WBA) which has kept going down. I eventually realized my mistake and got rid of the shares which have since dropped another $5. The other wheel options have more than made up for that loss, so the account is up overall about 5% YTD which in this market is pretty good.
If i do sell naked puts and i get asigned. Will those shares be on margin, if i dont have the shares to cover? Is it same with sell naked calls if i get assigned
To sell naked puts you have to have a margin account and if you are assigned shares they will be on margin and if your balance is low according to the broker you will get a margin call and if not funded your positions will be liquidated by the broker.
Great channel with lots of usual information explained in detail and clarity. Well done. New subscriber and binge watching your videos. First time I might even consider joining a discord.
What other kinds of strategies and management styles do you want me to test? Let me know in the comments! :)
🔥 START YOUR FREE 7 DAY TRIAL WITH MY DISCORD HERE 🔥
* Watch my video about the Discord here: th-cam.com/video/eN8_RBknhjk/w-d-xo.html
* Sign up for your FREE trial here: launchpass.com/options-trading-with-scott/discord-member
--------------------------------------------------
🔥 START YOUR FREE 30 DAY TRIAL WITH OPTION ALPHA 🔥
* Watch my video overview of the Option Alpha platform here: th-cam.com/video/URDOSBK_DbA/w-d-xo.html
* Begin your FREE trial here: optionalpha.grsm.io/y1pqhikwh1lg
Thanks Scott, great example of how selling puts can lower cost basis
I have just watched about 10 or 15 of your videos and I am wondering now that you're a member of option alpha if you couldn't do a 10-year back test strategy on the credit vertical spreads to see what criteria might do best.
From looking at some of the other videos on TH-cam it looks like you need to have a Delta of over 70% and probably better maybe even 80 or 85 or 90 and implied volatility of over 50% but again as a newbie trader and just trying to understand not to make too many mistakes when I start out back testing sure seems like the right answer and being a retired I really don't have the technical knowledge or experience to even understand how to do a back test but I think that your channel would really enjoy understanding that seeing how a lot of us are small time investors and just trying to put a little extra money in our bank accounts thank you again for your wonderful courses and I really do appreciate all the work that you've done and again you've made me a believer of selling calls as opposed to being a buyer of calls or puts thank you again
Thanks for the kind feedback, John! I'll keep your video idea in mind and will try to do a backtesting video on credit spreads! Best of luck to you on your trading journey :)
Ok kid. It's adorable that you're learning to backtest and this comment is by no means meant to discourage you from doing that. Some constructive criticisms:
Details are very important when backtesting. The smallest discrepancy can potentially render your results entirely invalid. In that context, a 0.05/0.5 delta put spread is not "the same thing as a naked put." 95% of the time it is pretty close, but that other 5% means that 1 in 20 days feature outsized moves that should have an outsized effect on your final returns and you are excluding them from the results. This could be making your results more inaccurate than you might think.
Additionally, assuming the spread is equivalent to the naked put, this test still does not at all prove that selling puts is better (which we'll define as "makes you more money than") than buying calls. It proves that over the last 10 years (which is easily the worst 10 year data set in stock market history due to the distortions from QE) a strategy of blindly selling delta 0.5 puts on a rolling monthly basis, rain or shine with no regard for what the business cycle looks like, what's happening on the news, seasonality factors, macroeconomic factors etc... produced superior returns to blindly buying delta 0.5 calls. So you proved that one dumb strategy makes more money than another dumb strategy. lol
If you want to make a better judgement of put selling vs call buying you would need to compare them to each other when both utilized at least adequately, if not optimally. Like compare them to each other with entry on bullish breakout above resistance with increasing volume with reasonable profit and stop loss targets, for example.
The way you use backtesting to learn something useful is to test a full strategy that you would actually consider trading live. You can look back and see how consistent the signals like moving average crossovers + MACD positive blah blah would have performed in the past. Which even then is practically useless if the near future is going to be significantly different than the past you're using as your source of data (like now). Anyway good luck have fun
Thanks for the feedback! Here's some constructive criticism for you...
If you're going to offer unsolicited criticism to someone, it's best not to come off as a condescending asshole in the very first sentence. If you do so, it makes the person receiving the feedback completely disregard all of it because of their contempt for you and condescending assholes in general. But thanks anyway for your adorable little essay :)
@@scottreesetradinginvesting7936 buthurt much
Despite the economic downturn, I'm happy ☺️. I have been earning $60,200 returns from my $10,000 investment every 13 days
I am not here to talk to about her, but to testify to something that I am confident and that I am sure is the best option ever.
@Phillip Myers
I am also a live witness to the expert Mrs Fiona
She have really made a good name for herself, please how can I contact expert Mrs Fiona??
Mrs Fiona is always active with t e l e g r a m👇
@Fiona803
👆👆 That's her username
nice video, thank you very much Scott. do you have a modified service that work for someone who works 8-5 ? if you had a service that emails you what you bought sold each day would be great. alot of people don't have time to be in the discord all day. thank you again.
As of right now, I only offer the Discord service. However, I would argue that's even better than a daily email service. With the Discord, you will get realtime updates on everything that I'm trading in addition to other daily trade ideas, trade tips, getting answers to all of your questions, and more. Even if you're only able to check in on things a few times a day, I still think it will offer a lot more value than a daily email. And don't forget you get a free 1 week trial when you sign up, so there's no risk in trying it out for a few days :)
Thank you for the video, Scott! I'm looking forward to the other ones as well. Possibly jumping ahead and making a prediction on a future video in this series, I'm guessing selling options will overall be better than buying them for the reasons you mentioned. At least the risk of any losing trade is lower. Would like your thoughts on which is better: cash secured puts or covered calls.
Covered calls carry greater profit potential because you keep both the call premium and you can gain on a rise in the stock price. But I also would use cash-secured puts first to eventually take assignment of the stock at a lower price…and get paid to do so! So bottom line is I don’t think one strategy is necessarily better than the other…I think they work best when used together. Hence, the wheel strategy! :)
@@scottreesetradinginvesting7936 Wheel strategy has worked well for me so far even in the down market except for Walgreen's (WBA) which has kept going down. I eventually realized my mistake and got rid of the shares which have since dropped another $5. The other wheel options have more than made up for that loss, so the account is up overall about 5% YTD which in this market is pretty good.
If i do sell naked puts and i get asigned. Will those shares be on margin, if i dont have the shares to cover? Is it same with sell naked calls if i get assigned
To sell naked puts you have to have a margin account and if you are assigned shares they will be on margin and if your balance is low according to the broker you will get a margin call and if not funded your positions will be liquidated by the broker.
Great channel with lots of usual information explained in detail and clarity. Well done. New subscriber and binge watching your videos. First time I might even consider joining a discord.
Really appreciate the kind feedback, George! Thanks for watching my videos, and I hope to see you join our discord group :)
something simple like a following a MA could have exploded this strategy. love these type of backtest