Trading without OptionVue or ONE?

Discussion in 'General Discussion' started by Bsp, Dec 3, 2016.

  1. Bsp

    Bsp Member

    Is it possible to trade M3, RTT, Kevlar etc. trade without optionvue or ONE? I have account with Interactive Brokers.
  2. stevegee58

    stevegee58 Well-Known Member

    Open a Think or Swim account and don't fund it. You get full access to the nice analysis tools for free.
  3. DGH

    DGH Administrator

    Hi Bsp. Unless you have a good spreadsheet in which you can monitor your current (and I mean "at this moment") P/L for a given position, if will be almost impossible, even if you use Thinkorswim and can generate a risk graph. Thinkorswim risk graphs do not show your current net P/L...only the P/L of open positions. Some traders add previous trades back into the positions summary using TOS; this works but is cumbersome and prone to errors if you have had many additional trades or adjustments since trade launch. If you are good with a spreadsheet it is possible to generate your net P/L as additional trades are added and then matched against your existing positions by adding to or subtracting from accordingly; in fact, this is exactly what Optionvue does in its Transaction Log. However, it is tedious to do this manually. I have searched the web for a spreadsheet which would import trades from TOS or IB and then generate current P/L numbers based on open positions and additional trades, but I have not found one except for OptionVue or ONE. OptionVue does not, of course, sell its T Log separately; you must purchase or lease the whole package (I think). Anyone else have ideas on this?
  4. Andrew C

    Andrew C Well-Known Member

    Hi Dan,

    You can save positions in TOS using an export function and then import them as you like. This feature is found on the analyze tab on the bottom right in the same line as Yield, Vol Adj., Stock Price...under the "COG" next to more parameters. You can great a file for each expiration that you are trading separately. I have found that this works well for me.

  5. DGH

    DGH Administrator

    Hi Andrew. Yes, I have done it this way in the past as well. When I was mentoring students I found that they were prone to making errors in their exports such that they would omit an adjustment. As you might imagine this caused some unpleasant surprises. For a new trader this approach might work, though, assuming that he or she used TOS and fully understood the process. Having said that, I agree that this technique is very useful in strategies requiring few adjustments. Thanks for your input.
  6. Bsp

    Bsp Member

    Can I backtest with TOS analysis tool?
  7. DGH

    DGH Administrator

    In a word: no. The TOS OnDemand feature is essentially worthless for backtesting options trades IMHO. However, unless you are developing a new strategy, backtesting a well-established strategy like M3, RTT, Rhino, or Kevlar is like re-inventing the wheel. These strategies all work very well but differ somewhat in their techniques and trading style. My best and unbiased advice is to study these strategies (if you like butterfly trading) or the weirdor strategy (if you like modified condor strategies) and pick one which best suits you. Then study the archives in CD for that strategy, learn it well, and then begin trading with small size until you are very comfortable and profitable. Other suggestions for Bsp?
    vega4mike and Jack like this.
  8. Bsp

    Bsp Member

    Can I use your RTT alert service for $25000 account? Or its for small for it?
  9. Bsp

    Bsp Member

    I mean $25000 account is too small for it
  10. DGH

    DGH Administrator

    Hi Bsp. Yes, you can do the RTT for $25K. While I am not permitted to give specific trade recommendations, I can provide you with the following guidelines. You would need to either reduce position size OR skip a cycle. This is because the RTT service currently uses $17K planned capital per cycle. We do have several subscribers who trade 3 lots instead of the usual 6 lots. The RTT works well with this approach. However, you would not be able to take all adjustments (nor should you) which are intended for the $17K planned capital tranches. Instead, you should learn to recognize why I sent an alert and then review your risk graph to see if you really need an adjustment. A simpler way of stating this concept is as follows. Smaller size tranches can't lose as much money as larger sizes. Therefore, it is often possible to permit small losses which usually prove to be temporary during the life of the trade if you have smaller position size. In other words, trade the risk graph and the P/L according to your own guidelines and size, but use the RTT alerts to study my rationale for making adjustments and then determine if you need to make one. If you don't need one, don't do one. Hope this helps.
    Gene and Jack like this.
  11. garyw

    garyw Well-Known Member

    I know nothing about IB, but with TOS it is possible to handle the RTT SPX trade without OV or ONE, but would not recommend it yet. (If the software does what you want... buy is better than build)
    Regarding OnDemand on TOS, The TOS GUI interface is not yet fully functional, but the critical info, such as BID/ASK/VOLUME/LAST is accessible via RTD! -- To most folks, this info may have little value.
    I found the TOS Analysis tool while in OnDemand vary from worthless to unreliable. (some days, it may appear functional), The RTD access of that data, however, if constrained to the key fields mentioned above have been very reliable.
  12. Andrew C

    Andrew C Well-Known Member

    Gary, I am curious....why do you say it is possible to handle the RTT trade in TOS, but you would not recommend yet? I have been trading the RTT in TOS for several months and do not find it problematic.

    Dan, do you recommend subscribers to the RTT service have ONE or OV? Or, is TOS okay?
  13. DGH

    DGH Administrator

    Hi Andrew. Certainly, TOS is fine for the RTT trade, provided the trader understands the export/import functionality regarding all cycle adjustments. Generally, the number of adjustments per cycle would be easily handled with the import/export method. Tom and I do not take a position on which platform or brokerage to use. However, some brokerages (not to be named) have either no risk graph or minimal risk graph capability. We believe a risk graph is critical for properly trading this or, indeed, most, strategies.
  14. garyw

    garyw Well-Known Member

    You are correct! OV or ONE is not required for trading!

    For my personal use, I have some minimal capability to handle some of the capability of proper PnL tracking, graphing, etc, via TOS, RTD, and some code I wrote. -- (but do not recommend others follow my path-- too much effort)
  15. Paul Demers

    Paul Demers Well-Known Member

    My two cents.
    I use ONE to track my open trades. I find their greeks stable. TOS has decided to change the greeks whenever they feel necessary to control risk. They changed the greeks to volatility smile approximation over the elections without notifying their clients. Because my trades are managed by the greeks I find that I am either adjusting at the wrong time or putting on a new trade with an improper delta when ever they do that. With Optionnet Explorer I do not have those issues. I also use a spreadsheet to track trades as a backup which is not that hard to set up with TOS using RTD. I track my performance on a spreadsheet as I find that all the software available has limited tracking abilities.
    Hope this helps.
    Chuck and Jack like this.
  16. garyw

    garyw Well-Known Member

    My prior response was terse. Ill try again.
    Since I may have a significant amount of capital at risk, personally, I need to understand as much as I can about the trades, the position, and the "what ifs". While, one could trade via TOS without additional tools, your(my) ability to get a better understanding is limited. TOS is a tool meant for the masses, and not controlled adequately for my usage. -- IV derivations on TOS follow no fixed reliable algorithm. (good like playing with horse-shoes, but not for precision -- Switching algorithms without user knowledge). See Paul Demers 2 cents above.
    ONE and OV are options to provide more controllable derivations. I have added some code of my own to provide some reliability/stability for my analysis, so I don't rely on TOS IV or greeks, but do use their BID/ASK via RTD.
  17. Nam

    Nam Member

    To answer OP question: yes it's absolutely possible to trade any of the complex strat without ONE or IV
    However, you need programming skills (or hire a programmer if you don't program)

    I've been trading with IB, using their API to pull real time data, calculate Greeks in real time, track PnL in real time, hedge at the position and book levels (we can aggregate the hedge to minimize costs), decompose the PnL etc. and currently implementing a stochastic vol model. IB also allows you to place and execute orders through API, but I havn't taken advantage of this.

    The downside of doing things like this is it takes a lot of work, the upside is it provides you with a lot of flexibility. Just like an option trade, you have to weigh the "risk/reward" if you choose to go this way
  18. DGH

    DGH Administrator

    This is an interesting and useful thread, especially for newer traders who are still in the planning stage of their options trading. While I agree with all the comments indicating that it is possible to program a working "platform" by data mining (I don't have the skill to do that), I would caution newer traders against being "penny wise and pound foolish". I view my OV subscription as the cost of doing business. I prefer to spend my trading time launching new positions and adjusting older ones if necessary. I always have several strategies in play, not just the RTT. For me, it would be a monumental task to use a homemade platform (assuming someone would design one for me) which would incorporate the data among the various strategies in a meaningful manner whereas, using OV, this is easy. Other traders will probably have no difficulty doing this. But, a new options trader should focus on learning the skill set needed for trading, IMHO. As a former mentor, I had several students who wanted to spend their time programming, building spreadsheets, applying chart indicators, etc. They were terrible traders. Most of them gave up because they never actually learned how to trade and never really took the time to learn how options work. As Nam said, "you have to weigh the "risk/reward" if you choose to go this way".
    vega4mike, Jack, DavidF and 3 others like this.
  19. jim

    jim Well-Known Member

    Both my undergraduate and graduate degrees are in Computer Science/Engineering. My experience with newer traders is the same as Dan's. The worst traders tend to the one focus on the minutia and miss the big picture. These people tend to be the engineer type (Hey, I was a software engineer early in my career... before I got the Partner lobotomy at Price Waterhouse Coopers). Be careful not to fall into this engineer's trap. For example, think about what engineers have done for us in the travel industry. They put a man on the moon before they put wheels on luggage. Talk about not getting the most out of your work efforts in learning how to monetize your skills and capabilities!
    cracru likes this.
  20. Steve S

    Steve S Well-Known Member

    Dan and Jim, I know from personal observations over 22 years that you are absolutely correct here for the vast majority of wanna-be traders ... but I'm compelled to speak up for the 1%. I've never been able to learn much from anyone, to my great loss ... it's a personality defect. In trading, I always had to do it all my way, all the time ... a huge handicap when I was beginning, but there was never any alternative. Eventually I started making good money, for me ($0.5 - $1mm/year), and the only way I did it was by writing a million lines of code, building a thousand spreadsheets, and crunching a billion numbers - that was my natural and only path to success, as well as the only way I could do it while actually enjoying the journey. So Dan and Jim are right for almost everyone, but if you're a stubborn mule like me there is still hope.
    Nam likes this.

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