- Both the subscribers and the strategy developers won’t and should not expect long term strategy because both these two groups need to pay. No subscribers will pay for years for an uncertain results. Same thing for the developers.
- If 1 is true, then the developers and subscribers are looking for fast money. Subscribers are chasing high return strategies. The developers are working on high return strategies.
- If 2 is right, then the high return strategies will fail one day, quickly because of high risk to chase a high return.
- If 3 is right, then the C2 price system for the developers is logically correct.
- If 4 is right, then eventually the subscribers will find they are circling at the original point. The money goes to the pockets of the developers and C2.
Conclusion, the business mode of C2 needs to change. How?
I definitely agree that most strategies are high risk and most subscribers run to them.
I think one of the best ways to improve C2 is by adding a money at risk curve to the equity curve. For example, if the equity curve is at $100,000 but the developer is holding $200,000 in stock it should show a massive second curve in red dwarfing the one in green. Then when someone sells naked calls on the VIX it can show a massive red that curve that shoots up to an infinity marker. Below is an example of the chart I am thinking of.
My own plan has been essentially to offer strategies that appeal to a range of risk profiles rather than doing just one. Of course, I don’t plan on any of them ever failing, and since I don’t short and don’t use margin and don’t use all my money that would be pretty impossible. However, they are all designed for a different max draw downs and CAGR, that will hopefully appeal to more people. I will say the highest risk strategy has roughly 3 times as many simulations as that lowest risk one. I would say the higher risk one is almost 3 times more risky too.
Yes. All VIX, option strategies are intrinsically using leverage. It takes a while for the people to eventually understand it. Everyone can and will understand this one day.
Well they could be going long on options, right? Then they are not using leverage. I mean I go long XIV which shorts the VIX, but because I am going long XIV I can’t lose more than I put in.This is why you are allowed to do this in IRAs.
The foundation of a good services business is repeat / long-term customers. Eventually the customer-base will get wise to the developers who are taking wild risks or heavily curve-fitting over and over again, and they will migrate to more stable and conservative providers.
For example my model is basically at the moment performing the about the same as the S&P on a CAGR basis for the last year, but the thing is I’m using only 50-60% of cash margin in an extremely low volatility environment (the model performs much better in normal vol environments), I could easily double the model return by cranking up the leverage…
I don’t do things to maximize short term subscribers, everything is done for the benefit of long-term subscribers.
I suspect during the next downturn, when nearly all the short vol systems blow up, that there are going to be a lot of potential subs scrambling for moderate-risk models not correlated to what the model is trading that actually perform well in markets that aren’t raging bulls.
Agree. But the problem is that the subscribers and the developers cannot wait that long. C2 cannot wait for that long neither. Everyone need to be paid for their work and capital.
Hi, above IDs,
Can you please provide links of your strategies when you talk about your strategies?
When I saw you talk about your strategies I got curious and I want to look at your strategies. But if you don’t have links here I may just let it go and forget it.
People here are not aware when they post here they have an effective marketing tool. Whatever you talk about , just put the link of your strategy at the bottom of your posts, if you want subscribers pay attention to your strategies.
Your strategy is such a funny thing for a processional trader.
Highest risk: long only but I will put up to 100% of capital into XIV or VXX. I never use margin. Currently, I only use about 90% of capital: https://collective2.com/details/113220646
Middle risk: long only, I use roughly 95% of capital but hold as few as 5 positions: https://collective2.com/details/113220682
Lowest risk: Long only, I use roughly 95% of capital but 55% is in bond ETFs. https://collective2.com/details/113178999
Usually I avoid putting my strategies on other people’s posts to avoid looking like I am commenting just to promote, but when someone asks I just got to haha.
Good job! Good examples!
Here is a strategy I just started.
I don’t like the recent price increases on C2 (who wants to pay more?), however I don’t see it as much of a problem as I did in the past. Serious developers of longer term systems will understand they have to self-fund their own system costs for a year or so. It’s a cost of doing business–made up for once the system has a track record. The costs will remove a number of amateur system developers, but that’s arguably a good thing. If C2 “growing up” increases the quality of systems and grows the subscriber base, most everyone should be happy.
The issue of customers who want high returns NOW, and jump on every hot system just to end up eventually losing money is a different matter. I understand the average C2 subscriber loses money just like the average trader loses money. It’s human nature, and the nature of markets. Maybe the best you can do is offer people “healthy” choices along with “unhealthy” choices and let them make their own decisions.
I agree with what you are saying about self funding. I mean this is so much better than the alternative of trying to start a hedge fund when you have no connections to that industry.
There is an area C2 is unfairly skimming $$$ off developers, and I haven’t seen it brought up yet (but maybe I missed it). C2 now charges more to allow users to use higher scaling levels for systems, however those extra fees go only to C2 and are never shared with developers. Developers are the ones taking the hit from larger scaling being used on their system, why are they not sharing in those fees?
In the past C2 and devs made the same amount no matter how high or low users scaled. But now C2 has figured out a way to increase income from users with larger accounts. Those monies should be shared with developers who are providing systems that users are scaling up. Why isn’t larger scaling tied to an increased system subscription fee or something? Then it goes to both C2 and the dev.
Don’t know what your are talking about, “C2 now charges more to allow users to use higher scaling levels for systems, however those extra fees go only to C2 and are never shared with developers.”
Go to the below link, flip the switch to “investors,” and look at the “Increased scaling factor” row. Collective2 makes more money from allowing users to scale up on systems. Basic users can only scale 100%. Users with larger accounts pay more and can scale 1000%. But developers do not see anything from those extra fees even though their systems are potentially hugely impacted by large accounts scaling on them.
Another fun little tid-bit from that link… if you look at which user type the pricing defaults to (trade leader vs investor), you’ll see who C2 is really targeting with their business model.
Emm, does that mean, if a subscriber pay a package plan fee, all the fees they pay will be collected by C2? If so, who is going to subscribe from a developer?
Meanwhile, does C2 creating their own strategies? Otherwise where are strategies from for those subscribers who pay package fee (to C2 not to developers)?
Those are autotrade fees. System subscriptions are not included in those fees. And manual traders can avoid those fees altogether. However C2 charges more in autotrade fees to allow higher scaling and those fees only go to C2. I don’t think that is fair to developers. C2 finally figured a way to charge more to users with more funds, but only they get those funds.
My model can be found by clicking on my username in the forum as I don’t like spamming it on the bottom of every post that I make on the forums, however since you asked: https://collective2.com/details/106441266
It maybe a problem for developers, but not for subscribers. Subscribers can wait for another year, you can find 2-3 long term systems here at C2 to invest while waiting.