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Strategies that can be traded with TOS tools

Discussion in 'Options' started by Heuut, Mar 11, 2016.

  1. Heuut

    Heuut Member

    OptionVue is a mighty tool - but also a mighty beast to master. It has been discussed that for many strategies popular here (especially the JL ones) OV is required. For others like RT or Space Trip TOS can be used for analysis. So for someone not new to options but new to trading the greeks: For which of the strategies mentioned here (including Weirdor, Jeep, Nested IC etc...) would TOS be sufficient?

    Thank you
  2. vega4mike

    vega4mike Well-Known Member

    If you have backtested the strategies you intend to trade yourself & then modified them based on TOS, then TOS will be ok, however, if you are going to be following the guidelines used by the person who formulated the strategy, then you have to be aware that they would either have used Optionvue or ONE to come up with the guidelines.
    Hence you would need your own backtesting tool to make sure you understand the behaviour of the trade under various mkt scenarios. In this regard TOS would not be helpful as it dosen't have a good backtesting tool.
    Hope this answers your question.
  3. status1

    status1 Well-Known Member

    I would say it can be done using TOS since that is what I am using for tracking the trade
    I did not do any back testing but I watched quite a few of the video presentations of different strategies and I wasn't sure exactly what to expect so I plunged right in on dec31st 2015 with just one lot just to see what happens and see if I would be able to manage the trade by myself

    I started out with just one typical 40/50 RUT bwb but I did not add any protection on the upside since the loss was small and adding anything out of the money would be a waste in my opinion So I concentrated mainly on the downside We all know what happened in January so I was not exactly sure what I was supposed to do with the greeks so I just placed another bwb right around the lower wing that way the 2 short puts will raise that part of the tent
    I was trading this at a different brokerage where they cannot handle reversing a position in one transaction so because of that I could not place the trade exactly on the existing wing so I just placed it 10 points away I also made it so it's 50/40 in other words the lower wing is the 40 so as it goes lower it gains a little more although it still keeps loosing from the first bwb

    I know a lot of the rules in the video suggest to close the trade after a certain amount of loss but I figured as long as I can keep it inside the tent I should be able to make some money even though I may have to keep the trade until expiration

    I started out when RUT was trading at 1144 than added the second bwb at 1046 so that's about 100 points lower and the trade was still profitable at that point if held till expiration
    When RUT was at 1026 I added the third bwb since it was at the edge of the tent I wanted to add a little margin in case it expired in that area it would show some profit
    At that point it looked like it may start to go back up so I adjusted one of the wings to get a little profit but I was wrong as the market went even lower in February
    So on Feb 9 the trade was not looking good the p/l was at -1064 so at that point I added a condor to basically stretch out the wing so at least limit the loss if it stays there at expiration so the graph looked like a stair step down
    On 2/11 I had my max loss p/l showing -1309 which is not too bad considering that RUT closed at 953 which was almost 200 points from where it started
    At that point the marked looked oversold so I left it like that and a couple weeks later it bounced back up at which point I readjusted the trade to show the third peak and eliminated the stair step

    By March 5th Rut was back at 1081 and inside the first tent and took the profits with p/l showing at 1169 by closing the first 2 bwb's and only leaving 2 verticals left from the third one to squeeze the last ounce of premium left by letting it expire next week

    Sorry about the long story but I just wanted to show that this type of strategy can be done in TOS as long as you keep track of the closed positions on the graph
    Option view probably tracks the positions better but with a little work it can be done in TOS as well

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