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Technology Stocks : INTEL TRADER
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To: MonsieurGonzo who wrote (4419)10/20/1998 7:37:00 PM
From: Gersh Avery  Read Replies (1) of 11051
 
Hi Steve .. Re Pizza

Nope .. never back tested it .. Paper traded?? Well, this is actually a more conservative adaptation of methods that I used in the etrade game that I used to play.

The main concept is that while a stock is in a uptrend the premium has a tendency to collapse. Conversely while in a down trend the call premium drops. The trick is to catch the moment just before the change in trend. That captures the quick change in premium.

My targets in the game were much higher than 100%. I adjusted the technique to target smaller gains and increase the probabilities of gain. DJ was correct with his identification of the source of the method.

Of course, this could not have been for massive numbers of options. But, for the market to go up forever with never a pullback??

Well .. we got a pullback going on now. I get to watch and find out if this is just a backfilling movement or the resumption of the bear. This could well fit the ~60% move that DJ mentioned before. I don't think that is. Duration of this pullback should tell me.

Re real numbers and paper trading .. I had not even begun to shop as the VIX had not yet hit my wish list target of 25. That said look what happened to the VIX after 2 PM today. I suppose that if this pullback should last a few days then the method would be to leg into calls.

If you wish, I would be more than happy to post some paper trade movements. If I do that I think that I will target a 200% gain.

Gersh
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