Lol just noticed that I cut that off in the screenshots. $0.05 entry & $0.15 exit slip.

@zerodaymark no stop loss?

XSP is cash settled you cant get assigned and the fees are less also

RCM alternatives

I can link them. I mostly do not because I think it is a good skill for people to be inputting the back test to get better at the skill fo testing. I also wanted to respect the viewer that shared their options omega portfolio to not openly link it across the internet

Nice i do some of that also. Do you have any fixed mechanics for delta time and profit take / stop loss I would like to back test it and take a closer look

@@zerodaymark I found out that calendars behave much like butterflies, but you can leg in & out paying less commissions and slippage due to them being 2 legs instead of 4. Diagonals also behave like Broken wings when the long option goes further OTM. I love things like ratio spreads, BwBs and diagonals when tech stocks goes like 2 times weekly std in just a few days, IV rank is on the roof and further OTM calls are very rich. When you do a BwB for a credit you are basically buying a cheap vertical and selling a rich one. These types of spreads tend to decay 50% of it's premium VERY fast. As you probably already know, 8 delta options loses 50% of it's value sooner than 16 delta options, which also will get to 50% sooner than 30 delta, 50 delta being the slowest. When large moves occur the discrepancy goes even further. But I won't digress further haha to answer your question: I generally do diagonals shorting fronth week 16 delta, going long back week between 16 and 8 delta. So not too much "diagonal" but it's not a calendar anymore either. I'm a bit discretionary but a good rule of thumb is to have a call calendar each time there's a 2 std up move for the period (2 std weekly move in less than a week, 2 STDs monthly move in the middle of the month, but in this case I do it with monthlies)

​@@zerodaymarkmy reply isn't showing here, let me know if you can't see it

@ Yeah i cant see it

The mechanics are listed within the video. Stop loss manage your risk so managing your risk regardless of the result is worth it. As long as your slippage assumptions are accurate with what you have programmed in your backtest they will not affect your results in live trading and you will match the backtest

@@zerodaymark Sorry, I couldn't see them on my phone. I had to review on a bigger screen.

There has been a much larger rise in the use of ETF's and mutual funds so that could be it but for a niche trade like this I would not expect it to be as accurate dating further back

We manage these trades with resting stops so our risk is not that of the width of the spread but rather a multiple of the credit we receive. But yes if the exchange instantly shutdown that is the risk. So if you take in $1 of credit and manage at a 4x stop we are risking 4 to make 1

​@@zerodaymark Well that makes since, but then that is not what your backtesting. Your back test is 700% or something which is closer to full risk. But if in reality your testing 1:4 then you should have that in the auto-back test. I assume you will have a lower win rate, but you won't blow up. But with lower win rate you will hurt your CAGR as well. But that is a more realistic trading plan.

It should be traded as a spread we are just displaying the naked option in the test to get the most accurate data for testing purposes the cost of the wing is worked in on the entry slippage. If you are testing it I would encourage you to test just since SPX dallies and as a vertical spread the return and risk to reward become much more attractive

@@zerodaymark I think the most accurate data would be what you actually trade. Why not just put the wings in there and have slippage for those as well?

@@brandond2868 I only manage the short leg so I believe this is the most accurate way to backtest because by only managing the short leg if I tested as a spread my stop would hit $0.05 to $0.10 earlier than in options omega because it is buying back both legs. I also think the slippage here is overstated I often beat the stop loss slippage by $0.10. It is more just preference i like to be really brutal on my backtest parameters because it prevents me from looking at trades that probably are not very profitable and makes my max drawdown more unrealistic because they are overstated by the backtest parameters. Basically under promise over deliver

About half and half if they test the same i prefer to enter singles because their are less variables in the back test so I think that is more accurate to match the results

@@zerodaymark Thanks! Btw, do you have a referral link for Options Omega?

@@xKeithKimballx optionomega.com/register/zerodaymark

Yeah it depends a little so when you look back to 2016 it is quite common that a trade will loose an entire year on Mondays, Wednesdays or Friday entrances but never stays that way for 2 consecutive years just based on the gaps that occurred during that year. So i would say diversify your days of week entry first. in regards to all calendars getting smoked since then calendars often have small wins and large losses and are risk defined so edge can be much smaller since we had the massive VIX spike along with vol being held up with the election that really dragged calendars performance from those two events. Also in regards to expectations even the best strategies i expect to not make any money over 90 days periods about 1 quarter a year the real thing is if that happens for 2 or 3 quarters in a row its a red falg

I would recommend trading small to get experience and backtesting. Navigation trading is a good community. Options volatility and pricing by nattenburg and positional options trading by sinclair are good

Disregard, I found it. Thanks for all the info!

I am 100% mechanical and execute everything on the exact same daily predefined mechanics. You could do all of that and it would make sense if it tested better

I would in terms of width of spread yes in terms of selling no there is definitely a clear diminishing point of return from the drawdowns incurred from selling to much credit comparative to the return

Yes trade very small and trade vertical spreads with stop losses. i sell about 1.5% of my account per day in credit so pretty small

@@zerodaymark does this mean you risk 1.5% of the acc with a stop or collect 1.5% of the acc in credit?

@@zerodaymark Do you mean that you sell 1.5% of the account such that you risk 1.5% of the account with a stop or you sell enough spreads to get 1.5% of the account in credit?

@@zerodaymark is this an iron condor your putting on?

@lightmediaproduction yes but managed as separate verticals you can enter as a iron condor or vertical spread

I always manage with a pre defined stop loss at the time of trade entrance

@@zerodaymarkare your long vols the wings for your credit spreads.

there is basically no difference you can use which ever one you like best you can use tradesteward on think or swim

Correct I sell them in one order as a vertical spread but yes the credit target is correct

I think you should always traded it I was giving an example that even when it is below a 15 VIX it still has a positive expected return and in aggregate trading it with no filters yields a better P/ L

thats a quick give up but no worries its not for everyone

@ yeah, wasn’t for me. The thrill of making 10k in 2 weeks was too euphoric that it made me wanna chase easy money. I chased and did he market happily took it right back. The feeling after? 100% awful. I’d rather not feel that again and live somewhere in the middle of those two emotions loo

What were you doing specifically? 0 DTE options on SPX? Or was it something else

@ 0DTE SPY

No I would recommend not trading unless you have a minimum of $30k just stick to index funds and focus on working at a skill that produces more income

Yes it is net stop so if you sell $1 200% stop would be loosing $2 or buying back the order for $3

They release estimates every 10 minutes the last hour if you want to peg it to that I would just make the test enter at 350 or 351 and backtest off that

It's free content, if you don't appreciate it don't watch it!

I like to use 3-5% of the exit premium price for stop loss slippage. For orders that are bought or entry orders i like about 2% slippage of the price to enter or exit does not matter if its buy or sell stop loss slippage is the only one on credit trades that i calculate differently

It is based on the market on close imbalance which is often very high on those particular days

I would focus more on the act of just placing 3-4 strategies at a small size and matching the backtest as close as you can that is the underlying skill. Keep checking the backtest vs the forward test every week and once you have done that for 6-8 weeks you can think about optimizing trades or adding more but make sure you can match the trades first

@mcdawgzy would you be able to expand on the strategies your working with. I got two strategies so far from mark but i have not gotten the chance to go through all his videos yet. any tips would be greatly appreciated.