Yes IF you do that would be great. Even IF you maintained the 4.3% return every 30 days that would be great. Good luck. My two cents set lower expectations.
True! How about I just target beating the SP500 with no correlation to it? That would be great too because a sensible person would add this strategy to their portfolio to decrease overall risk. Right now during the last 34 days the SP500 has returned -.8%. If the SP500 does on average 9.75%. I have achieved 6 months of that return already.
Oh and let’s not forget the strategy’s risk so far…
Compared to SP500…
CONCLUSION:
Yes it’s all hot air but I’m totally spanking the SP500 so far!
Please note: I was at Risk 16x taking $2000 per month out of the strategy as the manager. Now as a C2 200% scaling subscriber, I can take the same $2000 and be at the Risk 2x column (add the strategy profit to the subscriber profit in that column). The risk/volatility driver is the profit take/loss amount I go for each day.
Please see I was going for about $300 profit take/loss per trade. This should be lower going forward as I want to experiment with even less risk.
Okay. New idea. In a few weeks I may start a new strategy Beta Momentum V2. It will be something like the following possibly;
Beta Momentum V1 (the original): more risk/return.
Beta Momentum V2 (new idea): less risk/return.
The strategies will differ in that the lower risk/return version will have a smaller profit take/loss amount per trade than the higher risk/return version.
I have recently been trying to adapt one strategy to meet the needs of all subscribers. Silly me! Why not just offer two versions?!
Both strategy versions will still have very good Sharpe ratios, low correlation to SP500 and low beta.
Also don’t be confused, the strategies as investments will be low beta but the underlying stock investment I am buying long options on are high beta.
5 more trading days in September. Enjoy the weekend!
If you go to The Grid and search for Options strategies with a Sharpe ratio >= 2.75, guess what?! Only one strategy comes up.
Yes, Beta Momentum V1 is new to the game, but it is upending the idea that options are super risky.
Discussion started quite well, but ended up with the typical sales pitch about Sharpe, Sortino, risk of ruin, how the SP would be beaten and C2 subscribers wealth will be growing per 2k/mo based on just 1 month of trading.
The only hope is that this is TOS and therefore in the future some crazy moves on the account in desperate wish to restore it quickly from 50% drawdown may not happen. Though this is not guaranteed.
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Sorry, if the discussion is too salesy. I just have never had access to so many statistics about the strategy’s performance. C2 is very impressive. Maybe I have too much confidence, but maybe it’s warranted too. We shall see. Very good start though. I have dialed back the risk so the return expectation of $2000 per month will no longer be achievable without a 300% scaling. I am TOS and I am a subscriber at 200% so I am hopeful to still achieve $2000 per month. This is all hypothetical anyway. Please watch and wait. There is an opportunity cost for waiting though. Thanks for your reply!
Question though. How many months are sufficient to wait? The future is never secure even if you wait and wait.
“Fortune favors the bold.” Only complete risk capital should be deployed.
Also, to be clear, I have dialed back the risk but increased my commitment to the strategy. See above. The strategy says only a $90 profit yesterday. But, because of my subscriber account scaled at 200%, I achieved a total of 3 times that or about $300 profit yesterday. So, instead of increasing risk after a drawdown, I am lessening risk, increasing my commitment but profiting the same target $300 profit per day. This will cause the strategy to look like it is taking longer to recover from its drawdown. It isn’t. That’s okay. As long as potential subscribers understand what I’m doing. No crazy risks from me after a drawdown. As the previous poster is worried “therefore in the future some crazy moves on the account in desperate wish to restore it quickly from 50% drawdown” is not going to happen on my watch. The opposite happened.
Further, if I just hold a position to achieve a $90 profit(***), I am holding less time and the chance of a reversal during that period are less. Holding to achieve $300 entails much more risk of reversal than holding to achieve $90. The momentum needed is less also. All good stuff.
The average time in a trade should now drop from 35 minutes or so to something less and the average profit/loss per trade should also drop from $300. The performance stats for the strategy are going to change for the better. Sharpe Ratio (currently at 2.77) should increase. Chances of a significant drawdown should decrease. The number of days with a profit should also increase, however the return percentage per day stat will drop.(*) Not to worry. As I increased my commitment, the daily dollars made will stay the same. I now(**) have an excellent dashboard with wonderful gauges to pilot the plane for us.
(*) This is all conjecture and plan on my part. The gauges provide me with a feedback loop. I will react to my inputs and adjust the controls accordingly. Yes, this is all just talk, talk, talk. The more conservative or frugal among you will not take the leap with me yet and will wait, wait, wait. I believe things will get better from here. But, I understand, it’s all about “show me the money!”
(**) New statistics are available to me as the strategy is older and C2 is providing more information now.
(***) It is a little more complicated than just this. If my indicators say sell sooner than $90 profit, I will sell sooner.
People want more historical data. Beta Momentum V1 is new to C2 but I have been running it a while. So, I dug into my trading records for the last 4 months and have created the following spreadsheet. Column B is actual(*) results. Column C and higher to the right show how a subscriber might do in the future using scaling (if past is prologue to the future). Note the key drivers are profitable days percentage, profit per good day and loss per bad day.
With my work here at C2 for the last 40 days, my focus has been on improving the loss taken number on a bad day. If I can get that down to $200, the following are projections.
(*) All results are hypothetical. Subscriber results for column B did not occur as I was not on C2 for many of the days.
What follows is my performance on C2 based on my trading records at IBKR since 8/15/23. Of course it’s hypothetical.
You show 600% return per year for a subscriber using 1000% scaling. A broker isn’t going to let them copy at 1,000% unless they have about 1,000% of the capital you do right?
Great point as to the capital requirements to 10x scale. I typically trade contracts that cost between $500 and $800 each. I may have 2 open in the driving account. Less now that I scale as a subscriber. Maybe 3? So $800 times 3 times 10. $24,000 requirement. So you will need more than $27,000 to fund a 10x scaling account is my guess. But not much more… not $250,000. Be safe and pad for some drawdowns. All this is hypothetical. I provide trades information not advice. I don’t use margin in my scaling account as it is an IRA, but IBKR provides like 4x margin on individual accounts too. My individual IBKR account funded with $27,000 lets me margin up to about $110,000. You can buy a lot of options for that and control a ton of stock. Options are super capital efficient!! 3 contracts controls 300 shares scaled 10x is 3000 shares. If I trade TSLA at $250 per share, haha the math gets scary… you are controlling a big chunk of stock. My $27,000 margin account lets me control about $3,000,000 worth of TSLA if I wanted to, but I am at only a bare fraction of that now. I am at 200% scaling right now. I can go to 300% easily before I have to upgrade my C2 investor/subscriber plan. It’s all good. I need more time at C2 before I even move past 300% anyway. I hope this is a clear enough answer for you. It is key the driving strategy be “safe-ish” to even consider scaling like this. My Sharpe Ratio is 2.9 and Sortino is over 4 right now. Monte Carlo risk of a 10% drawdown is .5%.
This the beauty of options trading. If I can keep the driving account consistently profitable (right now it’s a winner 80% of the trading days) and I can keep the risks low then scaling can be used to really make hay without the need for tons of capital!!
CALL TO ACTION! I have about 40 days of history in C2, see my stats. Plus I have provided about 120 of history using data from my IBKR account which shows that the performance for the last 40 days here on C2 is consistent back for 4 months. Plus I am improving strategy management over time due to feedback from great C2 stats. Waiting and waiting will not guarantee the future; all it does is cause the loss of potential profit in the here and now. The longer you are building up weekly wins in this strategy, the safer you will be because profits are piling up against a possible drawdown. Waiting will not provide you with security; the future is always uncertain… ALWAYS! Also, I hesitate to even bring this up because it may just be crazy, but, if the strategy starts having too much AUM, the trades it generates may affect markets and I will have to limit it. Think about it.
You provided 120 days of history?
Where?
Column B in the excel table couple posts above.
Do you run on the red right at the moment you get to the traffic light or waiting for green light?
Waiting is totally fine. Everyone has their own comfort level. I’m not a philosopher but induction as a thinking method does work. Is it “the sun rises every day so it’s a good bet it will rise tomorrow?” Or is it “past performance is no guarantee of future results?” Or are both statements true? We have a documented C2 hypothetical record of 40 days on one hand with a level of validity X. We have my analysis on my last 120 days IBKR performance with a level of validity Y. The important part of both the C2 record and my IBKR record is there is a statistic “% of trading days with a profit”. This is an important stat not provided by C2 directly. The next 2 important stats are “average profit per profitable day” and “average loss per loss day.” If induction is okay, we can infer future performance from these important stats and we can extend the historical basis back to 120 days. We don’t want to cantilever into the future off of just 40 days C2 history if we can help it. More history is better. I did pose the question “how much history is required to be able to comfortably project into the future?” 40 days, 120 days or 240 days? At some point additional history is not helpful (if it is helpful at all). When you stop at a red light it is just for moments then you are back to driving. Do you really need to be at the red light for 240 days to be able to start driving?
Woohoo! 
I have been working towards this… using the C2 gauges to fly the strategy plane. Check out the Sharpe?
Above 3.0 and the Google Bard Artificial Intelligence starts calling the trading strategy performance “Excellent!”
Two years?
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Well thank you for that insight. It is a good avenue to explore. I asked Bard a follow up question… based on the 80/20 Rule. That is can 80% be achieved in 20% of the time? Here is the answer:
So, if past is prologue to the future and induction is a common sense thought process to achieve reasonable predictions of future events then the waiting process could for an aggressive investor be 3 to 6 months. For a conservative investor 2 years.
I have provided 120 days, 40 of which are verified by C2. Extra risk relying on my data but for a very aggressive investor 4 months could be sufficient.
Expecting 50+% annual returns puts you in the category of a very aggressive investor.
Hello all. I was recently asked to do an analysis on how scaling the strategy affects both risk and return. The spreadsheet that follows is my attempt to do just that. Of course predicting the future is fraught with perils and I only have 2 weeks of data backing up these number. Needless to say the predictive model quality is not there. As more data comes in confidence levels will improve.
The baseline is for scaling at 100%. All other scaling factors are compared to 100%. Everything is relative to 100% scaling. If the risk is enormous at 100% scaling then scaling at greater than 100% is more risky. If the risk is small at 100% scaling then scaling at greater than 100% is more risky, but linearly so. You have to judge the start risk and bridge from there. Is this a cartoon? You be the judge.
For example, if you scale at 200%, your risk goes up 9.5% relative to scaling at 100% and your return goes up 82.64%. The 9.5% risk increase is because you have more capital at risk at 200% in this model.
