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Need help with evaluating OV

Discussion in 'OptionVue Forum' started by DukeB, Oct 18, 2015.

  1. DukeB

    DukeB Guest

    I am new to this type (OV, ONE) of software. I am trading with TOS. I have been reading the comments on OV. Overall they seem more negative than positive. Scott did provide information on how to set the proper vol for TOS -- greatly appreciated. What I think I have learned is that ONE is faster and has smaller time increments for back testing -- which seems good. It cannot plot multiple t=0 lines. OV is slower and has problems with TOS data but very accurate delta calcs. Also, 30 min back test increments. It also appears that (this is a guess) more serious/professional traders use OV. Although, Amy uses ONE and she is very knowledgeable and professional.
    Had an email from Andy at ONE:
    Hi Duke,
    By default, ONE uses the standard individual volatility to calculate the Greeks, inline with most broker platforms, including TOS. We are also beta testing a different method that uses the volatility skew and smile.
    I’m not familiar with any discussion forums you might have read so unfortunately I wouldn’t be able to comment specifically. However, I can assure you that both methods we use are accurately calculated and are simply a different way of implementing volatility. Our users will shortly be able to decide which method they prefer, both have their merits.
    Kind Regards,
    Andy


    I do not know if this adequately addresses the delta issue. All I know is that the delta on my current Weirdor went from appx -2 to appx -9 when I adjusted the settings per Scott's instructions.
    With all the negative comments about OV, I would really appreciate anyone's opinion about which way I should jump. I have talked to Tom a bit about my concern over 5min bars vs 30min bars when it comes to back testing. 30 min bars are no big deal for Tom. But Tom is a pro and I am not. He can probably glance at an option chain and a possible position and know very quickly what action to take. I cannot and feel (rightly or wrongly) that a more detailed analysis may be in order. So, I may be too concerned over the 5min vs 30 min bars. But 30 mins is a long time when the market is crashing as it did recently.
    Opinions/suggestions/advice OV or ONE?
    Regards,
    Duke
     
  2. Al G.

    Al G. Well-Known Member

    Hello Duke, I am my no means an expert on OV versus ONE. All I am saying is that if you are following Amy's adjustment guidelines for the Weirdor it would be best to use TOS default settings because this is what she uses. If you are going to trade M3 I would suggest using OV and the reccomended settings because this is what John Locke uses.
     
    Scott Slivnik and GreenZone like this.
  3. DukeB

    DukeB Guest

    Thanks again Al...
    Duke
     
  4. GreenZone

    GreenZone Well-Known Member

    I agree with Al's suggestion.
    Use the same software (and settings) for whichever strategy you are following.
    So use OV for John Locke and Brian Larson trades, and use ONE or TOS for Amy's weirdor.

    If you choose to do your own style of trade, then you'll want the most accurate T+0 estimation, and you'll get that with OV at the moment (based on my backtesting).
    Note that I have only tested TOS with the "individual implied volatility" setting, and have not tested the "volatility smile approximation" setting.
     
  5. DukeB

    DukeB Guest

    What you and Al have said makes perfect sense. I will do that.
    Is there a consensus of opinion about the accuracy of backtesting with 30min bars. It seems that this is a long time in some markets. Would a shorter timeframe be more accurate or does it really matter? My question may be naïve as I am very inexperienced.

    Thanks again foe all you help. Greatly appreciated.
    Regards,
    Duke
     
  6. GreenZone

    GreenZone Well-Known Member

    30 min bars are not more "accurate" than 5 min bars.....but they'll give you more granularity with jumping in to make an adjustment when you adjustment criteria (such as delta) is met.
    The majority of traders in this community currently tend to trade some form of John Locke strategy (typically the M3).
    John Locke recommends adjusting a maximum of once per day, typically at the end of the trading day.
    Therefore if adjusting once every day (6.5 trading hours) is sufficient, then a 30 min bar is more than sufficient.

    Let me also put it another way.
    If you had a choice of being able to use a product which is much more accurate with T+0 projections yet gave you 30 min granularity, versus another program which gave you 5 min granularity but less accurate projections, which one would you choose?

    Don't get me wrong, I'm no OV evangelist.
    There are many things I dislike about OV, and many things I like about ONE (which OV doesn't have).......but when it comes down to it, the most important thing (in my opinion) is to use whichever product which gives you the most accurate options modelling.
    For now, that means using OV is the lesser evil.
     
    Bruno likes this.
  7. DukeB

    DukeB Guest

    Well put.
    Thank you...
     

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