Anyone here have that capital to use it? It seems like the system is pretty legitimate. Naked short selling options holding to expiration pretty much. What can go wrong with that? Experiences??
After evening Grand Marnier…This is a silly question about experience. Are you looking for original subscribers that made 1.5 mln and ask them about experience? Or some “educated traders” that will tell you everything about the risk involved with naked put options selling and scratching their heads how is possible that R Options are still alive?
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I have no idea, whatever you prefer.
Use your brain. From perspective of 2nd deep Grand Marnier…
- you don’t have brain and too much money
- you don’t have any money and just asking question to start discussion
My vote is 2) (trust me, it is better than 1st)
here is an honest answer. I have been with r options for a few months, so far he’s made me money. I have live skyped with the creator and he seems very knowledgeable. I am autotrading both his r mini and his big one. Anything can blow up. it comes down to your risk tolerance and trust. You can check my profile I have been on c2 for a few years and have made LOTS of money with some systems. You can scale it small to try.
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A question - why would you trade both? If you already trade the large system, what’s the reason to trade the mini as well?
the mini is more aggressive
do you need portfolio margin to really take advantage of the full benefits of it? i know TOS and IB really don’t give you much margin with 1 short contract on what he trades…
Not sure I understand? You want more margin with IB, add more cash.
Not quite the point. The bang for the buck aspect is you have to put up around $4400 for one contact. Meaning,t hat is a lot of money for what you are given by the brokers on margin.
I read somewhere that in order to get portfolio margin at IB you need at least 110k $ . Hope it helps.
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Doesn’t that depend on the stock price and strike? I think it slightly less that $4000 on average.
The broker has to manage risk and stay in business. Seems totally sensible to require more for a naked put than a spread.
I just joined R Option mini. How could people make strong criticism of the owner’s style when he runs one of the only models here that’s sustained high performance over a long period of time. He’s super knowledgeable, handles money for institutions, and yet somehow manages to spend time on skype with individual subscribers, as he did with me… he runs a very good website, has lots to offer to this community. If only more strategies had 4 years of solid track records, many of us would avoid the pitfalls of younger strategies with a strategy owner who’s not got the required trading maturity to be trusted with your cash…
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Can someone explain how this is different than selling volatility? I suppose the only difference is realized volatility vs. futures market volatility. The two are highly correlated, though.
Does he have unusually good timing with respect to entering into trades? Or does he just put on short puts every week at some constant delta without much thought into market timing? (e.g., Did he sell 2350 puts when SPY was nearing 2400 just because 2350 has 0.2 delta for that week, even though it was pretty clear SPY was going to fly back down sooner rather than later).
I looked at this system and noticed that according to the trade record in October 2014 when the nominal value of the system was $300K, it went short 400 QQQ puts and 300 SPY puts. This requires even with PM millions of $-s in margin, probably at least an order of magnitude more than the $300K it allegedly had in the account.
I asked the author about this and his reply was that “shorting an option is risky” – that I totally agree with (but didn’t ask.)
I asked next C2 helpdesk about this. I learned from them that the system’s track record is not verified or happened on C2 at all. They (C2) offered for a while to let system developers upload their own historical trackrecord. This is how this system published its trade history. Obviously they (C2) failed to check if it was legit or not. [I have some scripts to check the distribution of p/l of trades. It is a warning sign for me (YMMV) when a systems makes a few huge % gains as this does.]
All this does not mean that the system is not wonderful. But the published age of the system is inaccurate and the published trade history of the system is inaccurate.
HTH
Joseph
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That’s very interesting and explains why this system popped up on my radar (and I check frequently for new TOS systems) in late November. I wondered why it hadn’t shown up earlier since the system is years old, but I learned that the TOS was only implemented in late November.
And of course the markets have been doing wonderful since then. Curious to see how he will fare during a real downturn.
Interesting that he went short that many options in Oct. 2014, notwithstanding that it was impossible for him to do so. I wonder about the motive. Was it right after the flash crash or before? If before, he would be bankrupted. If after, a very nice bump. Doesn’t really matter anyways since the track record is contrived.
What rationale does C2 have for allowing developers to upload their contrived trade history without any sort of verification? How can subscribers have trust in any pre-sub trading history with such a policy? Incredibly bizarre and dangerous to allow that since there is an implicit understanding by any would-be subscriber that trading histories on C2 have been at the very least built on the C2 platform (and all the verification that entails).
We do not allow strategy developers to upload their own “contrived” track records, as you claim.
Rather, for a time last year, we made a feature available in which strategy developers could instruct Interactive Brokers to provide a verified track record directly to Collective2 for live trading accounts. The track record was delivered electronically from IB to C2 directly, without the strategy developer manipulating it.
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Well, again discussion goes in the wrong direction (95% traders are losing money, so how it is possible they put facts together and notice elephant in the room). Yes, he did download historical trading data. Some people say to artificially improve performance. Matthew did answer it above. What about fact his system is 100% TOS (1.6 mln)? How this compare to few dollars he getting per month from subscribers? Why he do it?
Thanks, Matt. My reply was based on the facts presented by the poster above. Interesting that he could short so many options given his account size in Oct. 2014.
My bad, apologies, you indeed told me that the upload was done by IB directly and not by the developer.
OTOH the bottom line (and my warning to existing and potential subscribers) stays:
++ The full track record was not monitored by C2 (that we love and trust!), rather by IB and there is no indication on C2 about the time of the system that it was actually trading on C2; and
++ The trades in question are impossible to make. You double checked my calculation and concluded that
I agree with your assessment of the margin needs. Since our data import happened directly from IB (in other words, the strategy owner could not have inserted himself into the middle and “edited” the XML data) this implies IB must have cross-margined his account or had some sort of different margin requirements than C2.
I also want to repeat here that you told me back then that the import feature is no longer available for developers and this is the only surviving system that used it. I think this is good to know.
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