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Your math is correct. I am not sure what C2’s margin requirements are for options but usually brokers wouldnt allow you to do this because they require 100% of the option’s market value (No margin on options). There are some cases where a broker would but they would require you to be long the stock and to use the underlying stock as collateral. Additionally some brokers allow margin on options if the account holder qualifies and applies for portfolio margin(Which is not supported @ C2).
The strategy was also long an additional 150 calls. Looks like C2’s allowing margin on options.
@MatthewKlein Can you clarify C2’s margin requirements for naked Options?
I reviewed the FAQ https://collective2.zendesk.com/hc/en-us/articles/205329030
“The implication is that C2’s Model Account margin use is more conservative than real life, so your customers will be able to trade your system with less capital than the C2 Model Account shows”
The FAQ does not state what the margin requirements are… and based on the screen shot of trades above it does not seem conservative or comparable to 80% of brokerages. At least the ones I have reviewed. If the margin reqs for naked options are 100% of the options market value C2 has an issue because he was holding $104,261 in long options on BABA with the Crazy Options cash value @ around 65k.
So this is pure demo trade. But say the broker allow it. If the price would not go back and options would expire that means that account holder will owe 31k to broker. Am I correct?
Probably broker will sell everything when the account will go to zero.
Yep, you would be getting some very urgent calls from your broker.
Every broker I have reviewed doesnt allow margin on naked puts/calls. If you are selling naked options you will get margin called or end up owing your broker. Same event i’d assume would happen if they allowed you to use margin on long positions of calls.
Folks, not to defend any system: unless I missed something, you are talking about buying options? If so, in the US you are required to use cash. However, your loss is limited to the cost of the options… in this case 1447 x 0.63.
That is the limit to your losses! You are not buying $91k worth of stock, you are buying the option to buy that stock. Price goes down and your options are worth zero… you loose the investment… about $850. That’s it.
You don’t owe anyone for the drop in price of the equity. That’s one of the points of using options.
Most traders advised to follow crazy options with 1:4 - 1:5 so really no point here.
You put so much energy agains my 750% gains in crazy so I sure doing something right.
I hope you stay here after 1000% gains as only friends will be part of this Great event.
Hope for all you same skills of trading and again - no one of you could point for even 1 system with better Sharpe and gains-risk parameters so all the point is clear.
But the way it’s clear that when you see total options of 1447 in my model it doesn’t say I had same time open positions of the total sum. It’s clear that the person how said this have no knowledge of trading (as we see from his last comments)
It is not 0.63 cents, you multiply that by 100 since each contract is for 100 options. Try it for yourself.
Here is a screen shot for the same long calls he was in earlier and the same contracts 1477 … currently trading @ 1.68 and requires capital of $248,136. C2 is allowing margin on options.
He had 1447 contracts, each 0.01 is worth $1203.25.
1203.25 x 63 = $75804.75. That doesnt include the 150 contracts opened on the other 2 positions. Account value was below that for this trade.
@RobCrawford Turning $850 into $14000 would require a 1600% gain, a lot more then the 15% gain the trade made.
massage from my GF:
if you have some trading skills you probably would show you work and bring value to the world and not waste all youe life on comments on other’s work.
and we still wait to see postive work from all of you.
as always in history there where two kind of people - the one that build things-create new ideas and and the rest - the people who just comment…
maybe tsvika’s work is far from being perfect - high DD, last months Drop, some other points of trading failure - buy he is one of the very few persons here who really know to trade well and bring amazing results.
we wish you both great weekend and hope you find your best way to winners in the market
For sure friend, you have a good weekend too. Hopefully collective2 can give us some feedback on the outstanding margin with options issues. Hate to see your subscribers get margin called and miss the rebounds from the 60% draw downs of today’s trade.
