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September 14, 2016 - The Road Trip Trade - Dan Harvey and Tom Nunamaker

Discussion in 'Round Table Presentations' started by tom, Sep 15, 2016.

  1. tom

    tom Administrator Staff Member

    This thread is to discuss the Road Trip Trade presentation Dan Harvey and Tom Nunamaker did.



    PowerPoint Slides: http://cdurl.us/rttslides
     
  2. Marcas

    Marcas Well-Known Member

    Dan, Tom and Jim,
    thank you for this presentation.

    I'm steel new to bytterfy type of trading but I like it a lot (was trading mostly short term ICondor'ish trades lately). Watching slides of trade graphs I was itchy to do more radical adjustments that presented as I'm used to taking greater risk (25 % / year is low goal for me as I'm trading smaller accounts) but I realized that RTT is good base trade with a great potential to be individualized. I like this version of RTT better than older - not sure why - maybe because adjustments are more "my style". I was thinking about starting with Kevlar service, trade style which I like a lot but now I have to rethink, maybe it will be prudent to begin with RTT service. While trade itself is fairly simple I would like to look at your layering techniques. For how long now have you being doing layering in RTT service?
    Thanks again I enjoyed the recording.
     
    Jose Perez likes this.
  3. tom

    tom Administrator Staff Member

    Hi Marcas,
    Thanks for the kind words! Dan has been adding layering for a few months. It's relatively new to the RTT but it seems to add a nice lift to the T+0 line without much additional risk so it is likely to be a permanent part of the strategy.
     
  4. Marcas

    Marcas Well-Known Member

    Tom, I do like the idea of layering, including layers in shorter and longer date expirations. If, beside layers on right side, I also have support below my main trade I can be more aggressive with adjustments looking for higher yield.

    I noticed significant difference in performance of Kevlar and RTT on corresponding web pages of each service. Can you clarify why this disproportion exist.
    I also noticed that on next Round Table Jim will be updating us on Kevlar. Can't wait.
    (Meantime making moves to free capital for BFlys trades.)
    Regards.
     
  5. tom

    tom Administrator Staff Member

    Hi Marcas,
    The RTT and Kevlar are negative Vega trades so when volatility increases, it hurts the P/L of the positions. The market has had some bigger swings in the last few months which need defending. When you defend against such moves, it typically reduces your profit versus trades that didn't have to be defended.
     
  6. Marcas

    Marcas Well-Known Member

    I see, I will look into this.
    Thanks Tom.

    btw. You have quote from Itzhak Perlman. His partita in d-minor , london concert, is one of my all time favorites.
     
  7. tom

    tom Administrator Staff Member

    I'm working on this one now. I'll never play it like this, but it's fun to try!


    This is his favorite concerto



    I have the music but it's like the Olympics for violin. Maybe some day!
     
  8. Marcas

    Marcas Well-Known Member

    Wow Tom, are you playing violins? That's great.
    I had bad memories though... spending time with my cousin who was learning this instrument with me nearby... day after day :)

    Yeah, I was thinking about same place, same composer and same performer:
    www.youtube.com/watch?v=qtyTaE7LvVs
    I listened to few big names playing it with no major impression. This is second performance I listened that strikes me - all the time.
    Thanks for second link, I will find time this weekend to listen - even if it means stealing time from RTT and Kevlar.
     
  9. tom

    tom Administrator Staff Member

    I do play the violin. In fact, I just bought a new one! Pretty exciting. I played viola when I was 10 through High School and was 1st chair in our best orchestra (we had three at our school). My 2nd chair was 1st chair in the all-state orchestra. I didn't go for a few reasons.

    I started violin almost 3-years ago as it's very similar to the viola. I had to get used to always using treble clef versus the viola which has it's own clef. The violin shares three strings with the viola. Take the top 3 viola strings, shift them lower and add an E string and you have the violin strings. The instrument is smaller and lighter and easier to play. The music written for violin tends to be in much higher positions than viola music so that was the other big adjustment. My violin teacher says I finally sounds like a voilinist instead of a viola player playing the violin :)

    Perlman is simply amazing. I'd love to see him in concert. Anything Perlman plays is usually done VERY well.

    Here's another piece I played last year:


    Enjoy!
     
  10. Jason A

    Jason A Member

    Thanks for sharing. Nice. I used to play the violin too, but now I play the chinese violin more often. We called it the "erhu" . It only has 2 strings.
     
  11. tom

    tom Administrator Staff Member

    Hi Jason. Wow.. two strings. That must be challenging!
     
  12. Jason A

    Jason A Member

    Yes Tom. We have "limited range to the upside and downside". Very melancholic tone.

     
  13. Marcas

    Marcas Well-Known Member

    I envy you guys. Learning instrument is on my list to do.
    I must agree. Thou I'm more interested in Bach than Perlman, I would like to see him alive.
    As per piece.. did I hear some Hungarian notes there? I dont know composer at all, will put mp3 on my list.
    I also pay attention to things like this

    vs

    it makes me wonder.

    Regarding my beloved d-minor :) did you try to play it? I remembered hearing it in transcription...
    here it is:
    www.youtube.com/watch?v=4WpzfAd5gXk
    not exactly as I hear that piece, but still, I think, it is very, very good. Polished, not rough as it should be (see Stokowsky) but still excellent.

    I leave Perlman's favorite concert for Sunday it seem that I might have some time then. I didn't listen Beethoven for long time.

    We should move this tread to Wasser Cooler section or Admin will cut us off... :)
     
  14. Marcas

    Marcas Well-Known Member

    oops,
    I noticed bad links:
    first should be 3'24" into recording
    second is 3'55"
    I do not know what happened, I tested links before posting.

    btw: i really start liking this piece. I'm just slow. I have to listen couple times.
    www.youtube.com/watch?v=oeETRRsj1Ek
    It make me wonder about people from past centuries when there was no mp3.
    You have a chance to listen to your favorites few times in your life (unless you were able to play it for yourself...)
    .
     
    Last edited: Sep 18, 2016
  15. tman

    tman Active Member

    I'm 44 days into a Nov 18 RTT. I've reversed harveyed in thirds; when up 10%, 15% and 20% as suggested. I'm now up 23% on margin. I'm inside the tent. Do you guys generally take it off at 30% or let it go to 14 dte? I'm not looking for advice. I just want to understand how you handle your RTTs. Thanks.............Tony
     
  16. DGH

    DGH Administrator

    Hi Tony. First of all, congrats on an excellent return. The answer to your question, given your profit, lies in the thoughtful consideration of these questions: 1. how much more profit do you REALISTICALLY believe you can make? 2. what is the likelihood of doing so in the event of a large move in either direction? 3. how much are you risking in order to achieve additional profits? These are the questions I ask myself each time I am running a nice profit and considering an exit. I don't have a precise exit time in terms of DTE, although I generally like to be out by at least 10 DTE because of the increasing gamma risk. Frankly, my maximum return since I have been doing the RTT or a variant is 22%, but others have made more. I will say that, once I have trimmed the position to a 2 or 3 lot and the curves and greeks look good, I tend to let it run a bit longer since I know I can exit quickly if necessary. Hope this helps.
     
  17. tman

    tman Active Member

    Dan: Thank you for your prompt and thoughtful response. As of right now, this RTT is negative delta (a positive for me), reasonable gamma, and a still meaty theta. I've guaranteed >10% should it expire to the right of the tent (2150 now). I'm going to spin the wheel of destiny and place a gtc order to take me out at 30%.

    I've been trading options for a long time. I never scale a strategy until I'm certain that I've lost money with it every way possible. My first RTT was a Sept 30 expiration. I managed it poorly, mostly due to molesting the trade. As badly as I played it, it still made >5%. Thank you for sharing this robust and very forgiving trade structure...........Tony
     
  18. DGH

    DGH Administrator

    Excellent plan, Tony. We are pleased to have you in the RTT community.
     
  19. tman

    tman Active Member

    I routed identical RTTs through TOS and Livevolx. I want to see if I observe out performance.
     
  20. DGH

    DGH Administrator

    Give us a followup, Tony. BTW, I like your "theta" logo. Several years ago I had some T shirts printed (symbolically) with "I heart theta". Always got puzzled stares at the mall.
     
    Boomer34 and tman like this.

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