Algorithmic Options Trading 3

In this article we’ll look into a real options trading strategy, like the strategies that we code for clients. This one however is based on a system from a trading book. As mentioned before, options trading books often contain systems that really work – which can not be said about day trading or forex trading books. The system that we’ll examine here is indeed able to produce profits. Even extreme profits, since it apparently never loses. But it is also obvious that its author has never backtested it.  Continue reading “Algorithmic Options Trading 3”

Algorithmic Options Trading, Part 2

In this second part of the Algorithmic Options trading series we’ll look more closely into option returns. Especially into combining different option types for getting user-tailored profit and risk curves. Option traders know combinations with funny names like “Iron Condor” or “Butterfly”, but you’re not limited to them. With some tricks you can create artificial financial instruments of any desired property – for instance “Binary Options” with more than 100% payout factor. Continue reading “Algorithmic Options Trading, Part 2”