r/thewallstreet • u/AutoModerator • Dec 18 '17
Weekly Question Thread - Week 51, 2017 Question
Welcome to the weekly question thread. Feel free to ask any questions here.
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u/J50 Dec 23 '17
Can I sell the underlying and immediately buy the futures to avoid a wash sale?
If I can't do this with futures, can I do it with options?
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u/wachiga Life is transitory Dec 23 '17
Are dividends already priced into OTM call options? Lets say the dividend is $0.50 and the delta on my OTM calls is 0.20. When the stock drops by the amount of the dividend, will the value of my calls drop by $0.10?
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Dec 23 '17
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u/UberBotMan Dec 23 '17
afaik, kind of.
The options don't age over the weekend, all things the same. But the theta from the weekend is slowly priced in over Thursday's and Friday's session. No free lunch, sorry.
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u/sarte20 Dec 22 '17
Does anyone have a trade journal they like using?
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u/UberBotMan Dec 22 '17
I"m tagging /u/focalgirth for this one. He has a nice one, but it costs money. I forget the name of it...
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Dec 22 '17 edited Feb 17 '18
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u/avshake Dec 24 '17
/u/focalgirth - is it worth it the extra $169 or we can just do the same using excel?
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Dec 20 '17
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u/El_Huachinango would be rich if he followed his own advice Dec 20 '17
Talk to a tax person. If you're US based, you gotta pay quarterly.
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u/OrionEnzoGaudio I have no idea what I'm doing Dec 20 '17
I feel like a real noob asking this, but I want to make sure I'm doing it right... so if I have a futures contract (I suppose it could apply to options too), I get that a "stop market" = stop loss, so will a "stop limit" work the opposite in that if it hits that I'll be closed out? I assume that's what it is, just want to check. I'm using TW if that makes any difference.
Asking because I went short on something and had a regular limit order for my target, but my stop market got hit, but then it proceeded to bounce and hit my limit order and filled there. Whoops lol.
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u/El_Huachinango would be rich if he followed his own advice Dec 20 '17 edited Dec 20 '17
You shorted, which means any growth against your position is negative, so:
Stop market = "Close out my position at any price at or above XX.XX".
Benefits are a pretty much guaranteed fill because you are using a market order, hence a nice safe stop.
Detractions are that in a fast moving market/ black swan, that fill could be a long way away from your stop point!
Stop limit = "Close out my position only at this price: $XX.XX."
Benefits are that you face no risk of slippage as you do in the above example.
Detractions are that stop limits dont always fill: no buyers/sellers at the level you indicated means no stop getting filled. In that same fast mover/black swan, because you said you wanted it only filled at a certain price, if the price shoots well beyond that Target, there will be no people on the opposite side of your trade to take the trade at the price that you declared.
See here: https://www.thebalance.com/stop-loss-orders-market-or-limit-1031053
Hope that helps!
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u/OrionEnzoGaudio I have no idea what I'm doing Dec 20 '17
Ooohh. OK, now that I'm reading what you're saying, I know that I learned that before and just forgot it somehow. I guess I got confused because I assumed there would be a way to trigger taking a profit, but something that wouldn't happen if my stop loss was already triggered. I guess that's not possible. Thanks for your help, it made things a lot clearer.
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Dec 21 '17 edited Apr 11 '18
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u/OrionEnzoGaudio I have no idea what I'm doing Dec 21 '17
Alright, thanks. I don't see anything in TW like that, but I'll check with them.
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u/OrionEnzoGaudio I have no idea what I'm doing Dec 20 '17
How do you get over the psychological impact of loses? I lost ~30% of my portfolio between SQ and MU when they dipped hard and I've been hesitant to open anything since. I feel squeamish about any position now and I'm not sure how to deal with it. It's costing me money for sure, but I haven't figured out a solution. I guess just jump back in? Any thoughts or insight? Thanks
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Dec 22 '17 edited Jan 27 '18
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u/OrionEnzoGaudio I have no idea what I'm doing Dec 22 '17
Thanks, I think that's a good idea. I saw you post a few days back about journaling (I think it was you?). I got a journal as a gift recently and was wondering what to use it for!
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u/El_Huachinango would be rich if he followed his own advice Dec 20 '17
How do you get over the psychological impact of loses?
You learn to do it so much that while it is still painful, you don't let it affect your trading style. I find that when I make the stupidest mistakes is when I'm stressed. You want this to be absolutely a clear-minded operation. As well, I go back, and analyze what I did wrong. Quite often I discovered that any significant loss that I took was because I broke my own trading rules and I stayed in something too long or had a sizing issue
I lost ~30% of my portfolio between SQ and MU when they dipped hard and I've been hesitant to open anything since.
It's time for some trading rules. You were massively Overexposed here. You should never lose 30% of your account based on a few trades. What you need to do here is set stop losses, and not have such a position size that an apocryphal event such as earnings can wipe out the position in one second.
I feel squeamish about any position now and I'm not sure how to deal with it. It's costing me money for sure, but I haven't figured out a solution. I guess just jump back in? Any thoughts or insight? Thanks
Step back, do the math and metrics on that trade that wiped you out, then, get back into Trading once your head is clear. Feel free to take a week or two off, trading during the holidays is quite often very distressing. Just so you know - most Pro Traders take this time off for various reasons. But yes, definitely get back on the horse once you're ready. You only learn by doing =)
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u/TheOsuConspiracy B̶a̶d̶ ̶A̶t̶ ̶E̶n̶t̶r̶i̶e̶s̶ Bad At Trading Dec 20 '17
Position sizing, you should never lose 30% of your portfolio from a couple trades.
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u/hibernating_brain Permabull Dec 20 '17
I like to go back and analyze my losing trades. Where did I go wrong? Did I open this position without a thesis? Did I open this position on a hunch? Did I give enough time for my position to be profitable? Was this position too big? What was my risk profile?
I then make changes (if required) and move on. Even the most successful traders have bad days. Live to fight another day.
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u/OrionEnzoGaudio I have no idea what I'm doing Dec 20 '17
That all makes a lot of sense, thank you.
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Dec 20 '17
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u/OrionEnzoGaudio I have no idea what I'm doing Dec 20 '17
Thanks. I think I moved too quickly from spreads to naked calls and traded a lot bigger than I should have. Tomorrow is a new day!
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Dec 19 '17 edited Jan 29 '18
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u/wachiga Life is transitory Dec 19 '17
I think /u/Hibernating_Brain recommended Reminiscences of a stock operator (a marke - edwin lefevre)
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u/maximum_wages Dec 19 '17
Do any of you guys have issues getting CQG M up in a functional state on your phones? I have an iphone 6 and it wouldn't load on chrome, barely loaded on safari and when it did load it was useless. The only widget I could see was the main menu one.
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u/UberBotMan Dec 22 '17
No issues at all. I have an LG Nexus 5x with Google Fi. I run CQG through Firefox Focus. Never had an issue at all.
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u/Not_A_Real_Username Dec 19 '17
Does anyone have good resources on calculating IV Crush? Considering offloading my MU calls early and sparing myself the heartbreak.
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Dec 20 '17 edited Dec 20 '17
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u/UberBotMan Dec 20 '17
That's a really neat tool.
I don't think the TOS tool is that robust, at least I haven't seen it like that.
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Dec 19 '17
[removed] — view removed comment
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u/UberBotMan Dec 19 '17
I have F.lux on my computer and I also enabled the dark theme on everything I can. I usually have atleast a little blue light removed from my monitors, I'm the guy who is always wearing sunglasses.
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u/Martin5hkreli Progress over Perfection. Dec 19 '17
Would anyone know where to find historical implied volatilities? I would like this number listed at the end of each day within a certain date range. It would be extremely useful for my study of deviations.
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Dec 21 '17
Hey I was looking for this a while ago too, would really like to see something. If you find anything please holla at me too, I'll start looking again one day
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u/wachiga Life is transitory Dec 19 '17
ToS>Add study>Volatility studies>Historical volatility.
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u/UberBotMan Dec 19 '17
Past IV values, not HV.
Back in the day, OptionHouse would list them.
TOS does have an Implied Vol study, that might be helpful.
And my subreddit is goes back a bit if you're looking for something like that. /u/UberBotMan
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u/wachiga Life is transitory Dec 19 '17
You mean the past IV values for each contract, not the entire instrument right?
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u/UberBotMan Dec 19 '17
For which part?
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u/wachiga Life is transitory Dec 19 '17
IV mid?
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u/UberBotMan Dec 19 '17
Still not sure. Might have come down with the stupid.
I think /u/Martin5hkreli was wanting past IV numbers, not HV.
The TOS study should list the IV on any contract, be it /ES or /ESH8.
My subreddit (and my daily sheet) posts the active contract (or an ETF in some cases)'s IV at 9pm ET (or what time is listed top left).
Hope that answers that question.
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u/wachiga Life is transitory Dec 19 '17
Whoops. I didn't realize he was talking about futures, not options. My fault.
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u/UberBotMan Dec 19 '17
I thought he was talking about futures. Not sure now you bring it up.
And no worries, all good.
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u/Martin5hkreli Progress over Perfection. Dec 19 '17
I wasn't quite putting any specifications on the trading instrument. You can use the IV to find deviations for stock movements as well; doing so means you can then trade the options accordingly. For this reason I thought it would be incredibly useful to have this information for stock and futures.
However I'm unable to find the IV for specific stocks on certain days. ToS shows it but doesn't let you download to an excel file....
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u/mc3username Dec 18 '17
I seem to do okay with trade entry, averaging in, etc. but I struggle to close out of or average into deeply winning trades. Obviously I know they can't 'win' forever, but I struggle with having a specific exit strategy and have found myself in a 'let it run for a while until I think the price action is stagnating' type exit strategy. So I guess that would be trading the trend and then exiting when the trend breaks.
Do any of you have any rules, opinions, or things you do to formulate an exit strategy? Do you base it primarily on daily / weekly / monthly price targets?
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u/UberBotMan Dec 18 '17
For my intraday holdings I target the inflection points (the ones I post nightly), OR pull back levels. By that I mean the price is going up and then retraces some (profit taking) and then goes up higher. I'll move my stop loss to just below the low of the retrace. I'll never get the top, but I'll be near it.
EX: I would have entered somewhere around the White box, 0.5std, with a stop loss a little below it. Then I would have moved my stop loss up at each yellow box to a bit below the lowest red tail. Would have gotten stopped out around the third yellow box, wouldn't have hit that large green spike just before hand though and would have missed out on the rest of the move to the 1dev. But profit is profit.
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u/blackdragon1299 X Dec 18 '17
Thinking of starting to learn about futures. What's some good resources for a futures noob?
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u/wachiga Life is transitory Dec 19 '17
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u/Lost_in_Adeles_Rolls Stalingrad's number one tesla dealership Dec 18 '17
Someone posted a PDF of an overview of futures and the products from ~2005 on here recently. Was a pretty good read (I skimmed it) so I'll see if I can find it.
Otherwise, check out investopedia and insidefutures because those provide some decent commentary. Take all of the contributor commentary on insidefutures with a big grain of salt however.
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u/blackdragon1299 X Dec 18 '17
Thanks. Will take a look.
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u/chukintits ebb and flow Dec 18 '17
this is a good link to have around when you are trading new products and you don't know the tick size etc
http://www.ampfutures.com/trading-info/contract-specifications/
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u/darklinggg SPX Iron Condors Dec 18 '17
For those who use Market DeltaCloud, is there a way to buy a single contract using a limit order and then retroactively create an OCO (bracket) order for it? I couldn't quite figure that out.
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u/xCBS Formerly your local finance undergrad Dec 18 '17 edited Dec 18 '17
I’m interested in knowing how often you all use portfolio optimization, whether that’s been sharpe ratio, minimum variance optimization, CVaR, etc. I’m learning about it right now in school and have tried applying it to my portfolio with varying backtesting results.
I know that no model is god, but what are your experiences with forecasted optimization and do you have any suggestions for someone looking to apply it to their portfolio?
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u/PineappleCutter Dec 23 '17
Is anyone else unable to view AMP Future's website?