Options Trading With Credit Spreads (FULL Trading Plan w/ Results)
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- Опубліковано 8 лют 2025
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Trading credit spreads is a very popular strategy among "income-based" traders, as credit spreads have limited loss potential and a high probability of profit.
However, high probability strategies come with a cost, which is unfavorable risk/reward. Typically, credit spread options strategies will have far more risk than reward, which means many profitable trades can be wiped out by one unprofitable trade.
In this video, I share my analysis of a put credit spread strategy applied to the S&P 500 ETF.
We'll explore the historical performance of simply selling put spreads in SPY every single month. After analyzing the results with no trade management, we'll look at the implementation of profit targets, stop-losses, and strategic entry filters to help improve the strategy's performance.
Lastly, I discuss exactly how to size credit spreads as part of a long-term systematic trading plan. I've included a final put spread strategy with various trade size allocations, as well as the historical performance of the strategy when using these allocations.
My hope is that this research will help open your eyes to the true nature of the "high probability" options trading world, the downsides that come with it, and how to work with these downsides to produce positive trading results long-term.
Be sure to leave a comment down below with any questions you may have!
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This may be the single greatest option trading video of all time. Ive recently started selling put credit spreads and making consistent profit but I always wondered if there was data available on this strategy. You, sir, have provided exactly what I was looking for. I wish I could like this video 100 times.
Wow. I have consumed literally hundreds and hundreds of hours of option education content and this might be the most valuable half hour I have ever seen. Well done sir!
How is your option trades going so far?
@@parampreetsingh8768 Very well. And yours?
@@markmcnair5864 I just recently started, I have profited once, but it is kinda of scary. Plus is the spread minus the credit your true mas loss? or can you lose more on a dividend day or something? Because I have and option put credit spread contract for spy tomorrow which most likely will be profitable but just in case I do get excercised, do I pay them dividends too?
@@parampreetsingh8768 that formula is correct. Dividends should not come into play because you do not own any actual stock. Only the contract that allows you to buy/sell etc.
If trading causes concern, then definitely keep you max losses very low (maybe 1% of total account size or less) and continue to trade spreads for a while before writing any naked contracts.
@@markmcnair5864 All right thank you!
The strategy at 22:30 is what I do on a weekly time frame with 5% per trade, not the account. I've been averaging 3% a week. This is right on the money. Wish I saw this video before I started trading spreads.
Do you open the trade on Monday morning and expire Friday?
@@gavinng3898 I don't trade credit spreads anymore. My account has grown a lot since then and I only trade the wheel now.
This guy is really good at explaining stock options. I've watched so many of his videos over about 2 months. I have learned so much. I recently started trading options and have done very well with his advice. I like in this video he says if those gains are not good enough for you I don't know what to say. Lol !!! It's true this is not a get rich quick thing. If you can get a 30% return or better in a short amount of time ( a week or a month) that is amazing. Anyway thank you for the videos. Your videos have helped me make a few extra bucks a month. I pray that God will bless you for all the people you are helping with your knowledge.
You definitely earned my sub for this vid. My mind is blown by the depth that you went into with your study. Amazing!
What a great video to come across as I’m trying to get into credit spreads! An updated video of this content would be great. Thank you for the great content!
Phenomenal analysis, this channel is the absolute best. I will definitely be trying this strategy going forward. 👍
22:36 - Credit Spread strategy with management.
Entry: VIX < 30
Exit: T+30
Profit: 75%
Stop-loss: -150%
Size: 5%
Wow! Chris, this is some amazingly useful information and a great demonstration of how the stop loss, profit target, and allocation size can affect profitability and draw downs. Thanks for the hard work putting this together!
Wow. This is great material. One missing piece that I am looking for is the trade-off between position size and spread width. How to compare wider spreads and less contracts vs narrower spreads and more contracts. For example, if I want my max loss to be less than $5000, then how do I decide among ten $5 wide spread, three $15 wide spread or one $50 wide spread? I know options are all about trade-off but I don't have a clear view now about the trade-off between these two choices.
Great question and I also had a similar question along those lines. Because this was asked 3 months ago, I was just wondering if you already come up with an answer for your question? If so could you briefly clarify it please or could you recommend any studying material that made you see the answer? Cheers mate
Hi Chris. This is a great video. Just a quick question: where did you access the option historical data for this back test? Thanks a lot!
I wonder how well rolling the spreads out will work when the trade moves against you as opposed to just eating the loss. For example, if a stock is over sold and is likely to recover, it would make more sense to roll the spread and take a small loss or even roll it for a credit if your lucky and just have the new spread expire worthless as the stock recovers. This way you can avoid taking massive losses when the decrease in the stock price isn't really justified or supported by any of the company's fundamentals.
Very good research and concise. I wonder if the largest loss figure can be minimised if Calls credit spread was used instead of puts. Basically, maintain the same management/entry criteria, but alter the VIX entry to reflect the switch to Calls. My rationale here is the market tends to rise slowly but falls quickly hence the large drawdown with puts. Basically , the market has a nasty habit of using the stairs when going up and taking the elevator on the way down.
I like the strategy and analytics. I suggest the performance of the cumulative would be affected by yearly taxes. A typical marginal rate of 25% would change things a bit. I appreciate your work and have learned a good deal from it. Thank you much!
Thanks for posting. Excellent. I requested this one in one of your previous video.
I have few questions.
1)Are you picking up 45 DTE but close the position at the end of 30 days whether is profit or loss?
2)Why 30 delta and 16 delta. Why not say start with X delta go 5 or 10 point wide. For SPX 30 delta/16 delta is too wide.
3)Based on 15% allocation to this strategy say you can enter 5 credit spreads. Are you entering all the 5 credit spreads all at once or it is better to stagger them may one per day or one per week.
Thanks again for great post. Hoping to hear from you.
1) Yes, the trades are closed at the end of the trading month (after about 30 days) because it was easier to ensure the same DTE at each trade entry. Also, I use time-based exits in my trades all the time, meaning I'll close after a certain amount of time has elapsed no matter if it's a winner or loser.
2) It was a happy medium between 16-delta / 10/5-delta spreads. The 30 delta / 16 delta had decent risk reward. If you went $5 - $10 wide on the spreads, the risk reward would be significantly worse, like 10:1 (you can lose 10x more than you can make). Due to the downside skew in SPY, we have to sell really wide put spreads to get good premiums.
3) All spreads were entered at once. You can certainly stagger your entries in real life.
Don't take this plan as fact. You can adjust it however you see fit. You can extract the management techniques in this video and apply them to your own strategies, but I'm not guaranteeing the results will be positive as the results in this video are strictly for the setup and rules.
@@projectfinance Thanks for taking your time to reply. Since you have used end of the day quotes stop losees may hurt more than whats the backtest says. Intraday vol spikes/sudden down moves may touch stop targets. Most of the times prices recovers.
Am I right?
The P/L 171/329 in the beginning of the video, the delta is 0.44 / 0.39. Do you consider them good choices? The P/L ratio looks tempting 1/2. Thanks
This is exactly what I'm looking for. I was very confused since spreads are only strategies and operating on them daily seems very stressful.
My question for you Chris:
What are the tools you used in this study? How did you setup a study like this? Where can I learn more of this kind of study? Thanks!
this is hands down the most valuable options channel on youtube. that being said, considering your hypothetical portfolio, wouldn’t it just be better to long SPY for 10 years for 200% return instead of shorting put credit spreads?
could you possibly do some analysis of your most successful backtested strategies vs outperforming the market?
Thank you! The charts I made confused a lot of people. The starting value of the sized trade charts are not the amounts allocated to the trades. Only the specified percentage of the trade allocation is used in each trade. So if we have the $50K chart and 15% trade size, $7500 was used in the first trade ($42,500 in cash). And then 7.5% of the portfolio in each trade thereafter. So the strategy actually significantly outperformed SPY from a total return perspective, but not necessarily volatility. I will start including a sharpe ratio or something.
In short: the total portfolio increased 100% while only using a small percentage of the portfolio for each trade. The rest was in cash or could be used for other trades / investments.
projectoption I love the video, but could all the remaining portfolio be used for other investments? Or would some of the portfolio have to be held in cash for collateral on the credit spreads?
Good question!
@@projectfinance You mean "And then 15% of the portfolio in each trade thereafter," right?
Thanks for the video :)
Did you strictly select the deltas for all the trades you were talking about ? Those deltas really determine the probability of success ? What delta should we look for with higher Vix? Thanks again I love your videos
This is great! How do you backtest? Which tools do you use? Can you do a video on how to backtest a strategy?
This would be awesome and what requirements one needs to do backtests (live data etc.)
Hey Chris, thanks for this very comprehensive video. Much appreciated. You have indicated entering this particular trade when VIX is below 30, which is a useful and specific guideline. Both Option Alpha and your friends at Tasty Trade indicate that one should not sell options for any particular ETF or stock unless IVP or IVR is at least 50 and the higher the better. Your statement "Contrary to popular belief, lower implied volatility environments are very favorable for options-selling strategies, as realized market volatility is low." seems to contradict the other guys. I'm unsure how to interpret your statement for all other ETFs/stocks when selling options. What does "lower implied volatility environments" mean as that is a relative description vs what you indicated for the SPY trade described in the video (enter when VIX is below 30)? Can you quantify or be more specific in your guideline when selling options for other ETFs/stocks?
Great feedback and terrific question. I am surprised that there is no response.
i'd be curious how all this would differ if you used weekly options
I'm new with put credit spread and never used stop loss for the two trades I made prior to watching this video. this video just got me a little confused after a while. I need help understanding this stop loss setting concept.
Thanks for another great instructional video Chris. Very well presented. I agree with selling put spreads when IV is low, because low IV indicates complacency and a possible crash. IV was low for months prior to March 2020. When IV is high though, Naked puts after sell offs should do well I think.
Thanks for the analysis Chris, but I do think that selling short put spread on individual large cap stocks can be much more profitable and of course, there is not specific day of the month to open a position, it depends on market conditions. It sounds like a good strategy after a big crash.
Great video Chris. Highly informative. Thanks for producing.
Wonderful video! The plan appears sensible and easy to implement. Is it possible to know how it performed in 2021?
Thanks for the video. Why did you choose the 16-delta long put vs using a tight spread like the 28-delta put? You can get more credit for the same capital at risk (albeit you have larger slippage costs). Also, why not allocate a larger portion of the portfolio-- say 25%-- since it would yield a higher return. I get that there could be some crazy event which totally wipes out your open spreads (like Black Monday), but there could be additions to the system to avoid huge events like that (say liquidate all positions if X happens).
If I make my spread that wide it risk soo much more that the profit. But if I sell and then buy to cover two strikes lower it makes it more worth it. Still a high probably of being a successful trade with the profits being lower than the loss but that ratio in the difference is better
Hi, great video. Let me ask you this, supposing you are in a SPY bull put with an original VIX level at 25%. If the VIX goes, say to 35% while you are in the trade, what would you do? a) Nothing, just follow your strategy b) close the trade. Thanks
Chris simply amazing ! Your videos keeps getting better and better and deserve millions of views IMO best on the Internet period.
Quick question based on your historical data , have you been assigned in any of your trades when your stop lost kicked in and I assumed ITM ? Also your strategy to take profits @75% before expiration therefore there were no assignment s? I have narrowed down to vertical credit spread as my strategy but still unsure how Mitigate assignment
Would you mind posting a video on margin, how it is calculated, how it is collected, margin calls, etc please?
Awesome video Chris! Learned a lot just by watching your videos. Have some questions though, what's the rationale behind Selling -30 Delta and Buying -16 Delta? When you trade credit spreads is this the width that you normally use? Thanks again!
Thanks for this. Really appreciate. I would really want you to test a strategy that involves choosing strike prices with 90% (or even higher) probability instead of 70%, and betting with more capital.
Great video, I believe in trading systems whole heartedly, removes a lot of the emotion involved which can be killer. Also glad to see your pacing isnt thru the roof as on some older vids 😂
And I definitely don’t mind spending half an hour to an hour (or even more) watching one fleshed out video that clearly explains the topic and definitely nails home the key points. Its much more efficient than having to watch 10 videos that are 10 minutes long to grab bits and pieces of info here and there.
Altho im sure youtube algo loves that 😭
Hahah, it actually is slightly unpredictable, but longer videos can do very well. My newest 3-hour video is performing the best out of any video on my channel thus far. People don't watch the whole thing, on average, but longer videos can get more potential watch time than shorter videos, which keeps them on YT longer. The algo definitely loves that!
Fantastic video. Thanks for sharing such insightful information. Keep up the great work!
Thanks for sharing your work. You mentioned that you reviewed studies that shows that selling options in low volatilty (VIX) consistently produced better results. Would you be kind to share references or links to those studies? Kind regards.
If you're selling naked puts, couldn't you manage the downside risk with a stop loss instead of using a put credit spread? This would provide a significantly higher profits as you don't have to buy a put option to hedge the short put?
Great very informative video! It would be helpful to show the total profits and losses for each strategy you discussed. Thanks..
wow one of the best investing videos I've seen! I'm really learning a lot.
How would the credit spread strategy compare to others like Iron condors, the wheel, or others?
Thanks so much for your content.
The math at 5:15 is wrong. Max loss should be (Spread width - Premium received) X 100. Without the brackets you are getting a very different number.
Absolute best video iv seen on credit spread! Any idea if this strategy could be tweaked for weeklys? I would love the same kind of content for weeklys :) Great Work!
Hello. I really enjoyed your video! Would you say that trading with a delta .30 strike is still a viable today? Thanks.
Good video; I’m beginning newb but it seems like your right; better not to sell fire insurance (puts) during a massive wildfire; yes the premiums are high but it’s not worth it. It’s better to increase position size in a less volatile underlying. This is an income strategy for me, not a casino
this is just comprehensive and helpful content!! THANK YOU FOR YOUR AMAZING WORK
how do you monitor the credit spread price for stoploss/takeprofit intraday without staring at the screen all day? or is there a way to enter these orders/rules before hand in tastyworks?
Have you tested this with QQQ (instead of SPY) and VXN (instead of VIX) ?
18:50 I recently watched your Iron Condor management video and the conclusion there was that VIX >23.5 yielded the best results. Why is it different here?
I’ve been looking for this video for a month now. And you just put it on here today. Good information.
Awesome! Thank you!
Is there a way to automate it or each trade needs to be set up manually?
Hey Chris. Your studies are an awesome addition in contrast to the run of the mill youtube education I've been able to find. Pitching the honest truth about not getting rich overnight is much more realistic than what other channels offer. I look forward to more of your videos. Thanks again!
Thanks Evan! I appreciate the comment. More videos like this to come.
Great video. Where do you find the historic SPY option 30-delta and 16-delta prices to calculate all of this? Thanks! Again - great video.
Thinkorswim on demand
Who did you use for all of your back testing? I've been looking for a good service to back test strategies like this.
Thank you Chris. Very valuable info and I will certainly implement what I learned from this video
Your analysis covers approximately 12 year of SPY performance of which about 11 years were during a bull market. Bull put spreads are a bullish strategy, so the good results presented should not be a surprise. You could add value to this video by including analysis of the bear call spread at the same time, thus creating the basis for an iron condor strategy. The results will be (much) worse, indicating that traders, using this directional strategy and trading plan, will need to correctly forecast the direction of the market (which is difficult). Alternatively, you could make the analysis more generally helpful by covering a longer period of time, like 30 years or more, so that periods of market declines are included as well.
I was thinking the same thing. Doesn't it make more sense to test non directional strategies to eliminate maket crash risks? And maybe utilize longer term options. Just wondering what the returns will be.
But I don't think it is possible to get 30 year old option data and aslo I don't think it make any sense as the economy and the market today and 30 years ago are two different things.
Lol there's always this type of guy on the video. You may be exactly right. You may not be. But atleast appreciate the attempt made to bring some sort of clairvoyance to the sea of bullshit in the securities world. He's a real one. Unlike most.
Considering Markets are upward biased so we use bull put strategy. Even if u take 30 yrs data, u will find more than 50% of the months will be up. Also he has added vol filter to avoid bear market. U can test those years by adding bear call. Bt overall strategy is good and above average
A really great Backtest - so what kind of overall Performance with a 250k Portfolio could be possible on yearly basis on average - what is you experience (realistic) best case ;o) average??? I appreciate your feedback - what about allocate more then 15% or 25% or more? ...
Awesome study, very interesting results. I guess this is a good strategy in a bullish market. Although it would be difficult to keep using it after an year of negative results, perhaps losses can be averted by not using the strategy in crisis or bearish market, if one can figure out that context.
Then more questions:
How did you make the backtest, are there some tools that can help automate such a backtest or provide history data? I would be very interested in doing such tests myself.
And if it's better to sell spreads when lower volatility, what about the reverse side, is it better to buy spreads in higher volatility even though they would be more expensive?
Man, this is excellent!
To avoid all bear phase, wt will be vol filter? I see 2015-16 was bearish phase, to avoid that, do we have other filter or vol is the only one?
Solid video buddy. I'm new to options, but have been trading equities for ~7 years. Positive expectancy is critical. I can already tell that when selling spreads at a win rate of 70/30 you need to aim for at least 65% maximum profit to stay above water (before commissions).
I've seen a ton of arguments for 50% of max profit, but you'd have to tighten your losses which more than likely will cause your win rate to decline by not letting theta work in your favor.
Am I understanding that correctly based on my analysis and your research?
Thanks for the great video, I really appreciate it but I have some questions :
I read, that closing option trades by setting a stop loss is not preferred, since the trade will be closed, even if the strike isn't reached yet (e. g. by rising IV). I thought the long put at a lower price is meant to limit the loss, or am I wrong?
The second question is, how you did the backtest? What software did you use or is this included in the tastyworks software?
Anyway, great video(s)!
I wonder if you can keep the -100% stop loss and re-enter the spread when the price recovers stability?
I feel like I'm missing something so can you clarify for me possibly? Let's say we collect $300 premium as a Max reward. Profit Target = 0.75 * 300 which is $225. Max Loss is 150% so $750. With the success rates you mention. (225 * 76) - (750 * 24) is a net negative at -225. How then is the trade profitable? Am I missing something?
For clarification having done research on my own and lacking understanding I realised I misinterpreted data. Profit Target and Max Loss using stop loss are just maximums, there will be profit/losses within that bounded range based on this ruleset after having done some testing
So, today is Nov 2nd, 2020, the first trading day of November. If i set up a 30/16 delta put spread and looking to exit on Nov 30. 2020. what expiration date should i go for? based on the strategy you discussed in the vieo
Very eye-opening video! Great research. 💯
Glad you enjoyed it!
Great back testing analysis. I wonder if you have back tested with ATM or one strike OTM with vertical call debit spreads for the same period using various stops as you have done with credit spreads on SPY?
Nice video! One question: since you are using EOD price, the success rate will be lower in reality. There can be cases that the intraday price is lower than the EOD and it will hit the stop loss.
Very Interesting and strong point. I considered a counter argument being profit target might look different factoring in intraday pricing, but I believe you make a valid point, I'd be interested his thoughts. Cheers!
What about gamma and closing positon 21 days before expiration? Have you looked into those stats?
1. Can we use the same system to other strategies? i.e. Iron condor, Bear call spread, etc.
2. Is it work with any other tickers?
You CAN use the same management tactics seen here for other strategies and stocks. But you should not assume the results will be the same. They will be very different, especially if trading individual stocks.
@@projectfinance Thanks a lot
I have a question about stoploss and spread. In most cases your stoploss is going to be hit before you hit the downside protection of the long put. Why buy the put at all then? You still will have the same slippage of an automatic market order anyway and it costs you premium.
@projectoption really hoping you could give me some insight on this. thanks
If the SPY were to gap a large amount over night, the spread would protect you while the stop loss would just get you out at the next days opening price. Most of the time this won't happen, but it could cause a large loss.
Hi Mike this was a fantastic video training and the most powerful strategy I just have a question can this strategy implement it with the SPX the same way you did with SPY without running into the risk of being assigned thank you
It’s Chris! Haha but yet you can do this in SPX. Same concept and there’s no assignment risk in SPX because SPX options cannot be exercised (they are cash settled). You wouldn’t have any assignment problems in SPY either because the rules would not allow your short put to be in the money with little extrinsic value.
projectopti oh thank you Chris I appreciate for your quick response thank you very much
It would be interesting to see the results from other deltas i.e. 20%, 10%
Great content and top notch presentation.
What was the average duration of each trade? I.e. how long did it usually take for the profit to hit 75%? Thanks!
How are you testing your strategies? which soft do you use?
Chris - Thank you so much for this content. Amazing. Do you have any similar research or backtesting for any other strategies such as covered calls, iron condors or butterflies? would you please indicate the name of the videos? thank you so much and keep it up. Great work!!!
Would this strategy be applicable to the QQQs?
Hello, would you be able to tell me what option database you are using / where to purchase it. I would like to do my own backtesting in python as well.
Thanks for this great video! Could I get your advice about using a stop-loss with this strategy? Would you recommend placing a GTC stop? Market price or limit? ...I assume for the profit target it's easy enough to just place a GTC limit order.
Would this plan be successful implementing it on weeklies?
That's my thought. You'd probably want the spread to be a little further away from the underlying price when you enter though. Like keep the spread below 1 standard deviation or something to increase the chance of winning.
Great video. But may i know how your calculate for - 150% stoploss? Base on price of SPY or Mark or Range of both strikes? Abit confused by your -150%. Thank you.
What about selling put spreads during low VIX and call spreads during high VIX?
thank for wake me up
Chris, thank you for this and for all of the amazing videos on your channel. Do you happen to have a spreadsheet template to do this systematic trade? I'm trying to build my own but I'm not very good with Excel. Looking to have a spreadsheet to help figure out the stop loss and profit targets based on each trade. Thank you in advance!
That should work for the weekly option trades right?
I’m more interested in bull vertical put credit spreads but your video is not VPCS, I think. Am I wrong?
This video is great. I am still practicing in a paper account. Do you know how I can get past option chain data to do some back testing before I start live trading this strategy?
Use Thinkorswim Thinkback function
the percentage of the success rate on the chart is the Probability of profit if held to expiration correct?
No that's the realized success rate: # of Trades Closed Above $0 P/L / Total # of Trades
@@projectfinance oh now it's starting to click bro these video are amazing man binge watching like crazy 😅
Did you do same back test on selling call credit spreads ?
Gotta put SPY on those charts
It's a good idea and I'll do that the next time around. Thanks for the suggestion!
Interesting ... but it barely outperforms buy and hold :/ I guess the main advantage is the low allocation. I wonder how beneficial a long call option would be
The idea that it barely outperformed buy and hold is invalid *because* of the same low allocation you speak of. The actual capital used to generate the results is much lower than had he bought in at once and held
Chris, can you tell me which software you use to conduct your backtests? Also, in this more neutral market, are you either selling index iron condors, or what are your thoughts on how you select between put spreads and call spreads? Lastly, did you run your backtest with 5 point spreads (say, for when VIX was over 30). Thanks
Hi Steven! I use Python programs that I write to do these backtests. I have/maintain a historical options database that I use Python to filter through and simulate strategies/portfolios. For index trades, I typically do market-neutral trades such as butterflies. I am not doing these trades right now as it's my opinion that it's not the best environment due to the mass uncertainty that's still among us. I believe volatility is here to stay for some time, although it's calmed down significantly in recent weeks.
I have not tested 5-point spreads, but it's a good idea for smaller traders.
Have you thought about doing a strategy like this but with 50 delta puts? I ask this because the strategy you are advocating here probably wouldn’t have beat the s&p once taxes are considered.
My only question is where you find a stock/ETF with less than 30 vix right now!!!
Also, wont that mean the premium received will be much less?
Awesome video and study though.
Yes option prices are lower when the VIX is below 30. The VIX is a literal representation of SPX option prices, so when the prices get cheaper the VIX goes down.
@@projectfinance That means, as an options seller I should sell exactly at a point where VIX is up (ideally at the highest level of VIX): VIX up => Implied Volatility up => Extrinsic Value up => Premium up. Right?
Great information.
@projectoption Awesome video! Do you have any recommendations for a software I could use to do my own backtests?
what opt strategy do you like in this rel high vix market heading forward?
Great content! Question which backtesting software do you use?
I'm sure this is subject for debate, but by using a fixed % allocation, you've included position sizing on top of a standard backtest. Big drawdowns earlier in the trade are therefore muted (although this one had a big drawdown later in the sequence as well). Doing it this way does not really seem to allow for an apples-to-apples comparison throughout because the position size varies. What are your thoughts on this? I don't believe any money management approaches can make a negative expectancy trade profitable, but different money management approaches can make degree of profitability appear different. How do you weigh in on all this?
I wanted to simulate a real strategy using consistent sizing. A one contract test would result in smaller position sizing as the account and market grew, and vice versa.
@@projectfinance I've often thought max DD should be calculated as a percentage of initial account value because by Monte Carlo reasoning, the largest DD could really happen at any point in the sequence and MDD% would be deceptively smaller when calculated off an already-appreciated account value. I considered this reason not to change position size during the course of a backtest, which is what you have done with allocation, which provides for a constant percentage but variable gross amount. Maybe my reasoning is wrong, or maybe it's a different approach with pros and cons. I'm not sure.
hi ProjectOption, will you close trade u mentioned in video if VIX suddenly above 30?
How do you do your backtesting? Would love to use this to backtest similar strategies with different variables!
I have a historical options database and I write Python programs to analyze through the data and visualize the results.
@@projectfinance do you use your programming skills to enter trades automatically based on predefined rules or do you enter trades manually? Why?
@@projectfinance What database do you use / where can I get it? I would also like to backtest with python
@@projectfinance