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| Topie: Thursday, May 26, 2011 |
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| membar |
Hey Allen,
A couple of musings:
- I wouldn't hold FAZ overnight any farther than I can throw it, especially since your backtests have shown that on average, holding FAS overnight tends to produce positive results.
- I'd be interested in your take on volatility strategies like straddles and strangles. Remember a couple of months ago when I talked about equal amounts of OTM puts and calls and waiting for something to happen? I still can't see anything wrong with this approach because the market pretty consistently gives us major moves within the timeframe of a few months. (Not sure whether straddles or strangles are better here.)
The options book I read said that if you do this, you should buy calls and puts at least three to four months out and sell them at least a month before expiration so they don't decay too badly. This worked like a champ with the AGQ put (although I bet on direction by only buying the put), which I bought for September. I haven't looked at the price of an AGQ $200 September put / call, but it would be interesting to track what would happen if one bought one $200 put and one $200 call and then sold as soon as one achieved x% profit on this combined position or y days before expiry, then repeated the process, rolling over the profits. I think stuff like this has a bigger chance of making money than daytrading. |
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| ISA_Coder |
membar, did you make good on AGQ yesterday? I saw your comment on how I would sell for a profit and you wanted to hold longer.
I did play yesterday, was in at 194.55 and got out at 196.04, then of course it goes up to 200 by EOD, so in hind sight i sold too early yesterday.
On the flip side, I bought into AGQ today at open at 196.75 and got out at 197.68, made my quick scalp and this time (at least as of now), hindsight is telling me that selling for a small profit there was a good idea.
So my scalping strategy goes, take quick profits (I always assume it can go down at any moment), don't get greedy, always trade with a stop. |
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| HeidiTwit |
Has anyone looked at the renko charts for longer term seasonal trades? |
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| HeidiTwit |
Thanks for the article, bulldog. I follow bull flags on the interday charts. |
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| HeidiTwit |
A chart of tna, showing stock coming off the bottom of the bollinger and in a reverse downward megaphone, both pos. indicators.
http://i860.photobucket.com/albums/ab163/agnesdee/20110526102936.png
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| BullDog |
Crazy market, all over the place. I am completely unable to guess direction at the moment. I have created a diversified portfolio of Large caps S&Ps. I am considering diversifying FAS into UPRO, and ERX. Then I'll be set for anything the mkt throws at me.
I have gut that the financials might see some upside into JPM earnings, which however is a month away, or if EU gets its freaking act together sooner rather than latter.
Americans consistently work more hours than our bloody/blooda EU friends. |
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| membar |
Quote:
ISA_Coder wrote:
membar, did you make good on AGQ yesterday? I saw your comment on how I would sell for a profit and you wanted to hold longer.
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Yesterday I was in @ 198.69 and sold @ EOD. |
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| membar |
http://www.marketwatch.com/story/betting-on-pre-memorial-day-strength-2011-05-26 |
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| BullDog |
member - aye aye capitan + Ben might consider QEn, where n = 4-1 |
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| allen314159 |
Quote:
membar wrote:
http://www.marketwatch.com/story/betting-on-pre-memorial-day-strength-2011-05-26
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membar, why'd you have to publish that?!? Now everyone sold FAS. :( |
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| BullDog |
don'y worry, it is coming back :-)
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| BullDog |
Even though I am in profit on my Wednesday's batch, I am holding FAS overnight. |
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| membar |
I made $4 today on AGQ!!!!!! |
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| allen314159 |
I sold FAZ @ 45.38 and bought FAS at open @ 26.21... I was freaking out last evening when I saw international markets up. I kept having dreams that I would wake up and FAZ would gap down 80%.
Anyway, my code chose FAS for Friday's open so no trades at close today. |
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| ISA_Coder |
with these bigger % swings in AGQ/ZSL, i'm wondering how much higher the leveraged decay is on these 2.
Just by eye-balling the graphs, both seem to currently be below their price from May 10th.
I just want to point out to everybody the underlying truth that all leveraged ETF's are subject to leverage decay and that they strictly move based on percentages of the underlying index and not by dollar amounts. Also that they re-balance every day, makes me wonder why people go long with these... |
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| membar |
Quote:
ISA_Coder wrote:
...makes me wonder why people go long with these...
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The same reason that going long with FAS would have bagged you 1000% from March 2009 to April 2010: in a trending market, these monsters appreciate more than 3x faster than their 1x counterparts. |
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| membar |
Quote:
allen314159 wrote:
I kept having dreams that I would wake up and FAZ would gap down 80%.
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You have to weigh the opportunity cost of playing this vs. the stress it causes. I don't think you have PDT restrictions, so why hold FAZ overnight? |
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| allen314159 |
Quote:
membar wrote:
The same reason that going long with FAS would have bagged you 1000% from March 2009 to April 2010: in a trending market, these monsters appreciate more than 3x faster than their 1x counterparts.
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I have one answer. UPRO
Also, since Dec 12, 2008, AGQ is up 760.6% while SLV is up 289.24%. So someone investing half their money in AGQ vs. their full portfolio in SLV would've still made more with 1/2 portfolio of the 2x fund.
To add a couple more percent they could've just filled the other 1/2 with ultra safe T-bills.
Anyway, it really depends on the market volatility, and how long you define "long".
I made a plot that described volatility decay vs. volatility. Don't know where that is... |
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