Automated Options Trading #1: Building paper trading account & intro to scanner for Expected Value

[@txbgould]

Interesting experiment Kirk. I look forward to discussing this in the community.

[@OptionAlpha]

Same this should be a fun experiment/series for everyone I hope!

[@jasonreviews]

it did pretty good today on paper trading with 3k. it made 40% I'm impressed hopefully it works for the rest of the month

[@patrickgo5004]

Looks good, thanks for your "thinking" 🙂

[@wmbrice]

Great stuff, Kirk, thank you!

[@OptionAlpha]

Glad you enjoyed it

[@ksoonsoon]

What would be cool is if you can give us relatively quick scheduled updates on this using KZbin shorts. Thanks.

[@OptionAlpha]

Never used those before but definitely can look into it. The goal is to constantly give updates as we go.

[@cdkbr5449]

Thanks, my thoughts based on your 80% probability video. Joining soon . Thx

[@ksoonsoon]

Cool idea. Let’s go What were your back test results on this Pure EV strategy? Can you share? Super helpful video. Thanks

[@OptionAlpha]

EV calculation something that we do at OA and therefore that data isn't available historically yet so I cannot backtest it. Hence, the concept at first here is to forward test it in paper trading and then get lots of data as fast as possible with short duration trades to up the trade count.

[@gauravhombali]

In GLD example, EV is $9.39 per contract. What exactly does that mean?

[@OptionAlpha]

That's the expected value over time for many occurrences. Here's how we calculate it: optionalpha.com/help/understanding-alpha-and-expected-value

[@jRoy7]

Shouldn't you tag Expires Before Next Ex-div date? Things like EV/Alpha aren't factoring the dividend in yet so far as I know, so you'll get stuck ITM a lot more than expected. Edit: Oh right you are using Find Trade Idea, and TI already hides anything overlapping ex-div. Sorry!

[@OptionAlpha]

All good yep!