Weekly update: some real results this time (+16.09% this month!); continued automation challenges

I have set up a small account starting around October 1 where I have been doing:

• short oil trades (selling calls in /CL)
• some of Navigation Trading's trades, especially the "Iron Duck:"

No, not like that. Like this:

Maximum risk on the upside is $5 (i.e. $500) since the strikes are 3015 and 3010 ... but since this trade returns $6 (i.e $600) credit, your "max loss" on the upside is a gain of $100.

These have been working great, for earnings trades and otherwise ... my intuitive sense of these said they should win 95% or so of the time, and the Navigation guy said as much in his video update ... some user of his who's been doing this a lot has won 40 of 42, he said.

Anyway, my real results since October 1:

+16.09%

Interested? You can subscribe! (But: past performance is no guarantee of future results, as we've discussed before.)

Update on the automation project: nothing new ... waiting on T.D. Ameritrade to tell me about their FIX deal, but no response yet. Also waiting on Vela Trading to tell me the price of their Execution Gateway or whatever else they have that will work for us ... 

Getting impatient on this, but trading my small account until then ... More next week!

Your $150,000 account: theoretical results since 2017

As regular readers know, I've been working on a project to automate Navigation Trading's trades.

It's not clear to me how large an account it would take to take full advantage of results like this, but I think it's around $50000. So with your $150,000 account we could put you in:

• 3x the trade size for all of Navigation Trading
• Short oil and natural gas trades (selling 2 calls vs 1 put in /CL and /NG)

Let's look at both kinds of  results you could have achieved in the recent past:

Date	Nav Results	Your Navigation Results	Your oil/gas results
2017 (Jun-Dec)	$9397.01	$28191.03	$15000
2018	$39682.39	$119047.17	$25000
2019	$25000 (projected)	$75000 (projected)	$25000

At this point, if you're living off the proceeds (plus whatever Social Security or whatever other income you have available), well, wahoo! If you've still been working and have just been letting this money accumulate, then you have the option to scale up and make more money in 2020:

• Go to 4x the trade size for Navigation
• Go to 3 calls / 2 puts for /CL and /NG

... and so on from there.

Caveats:

• PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Navigation Trading has done very well the last 3 years, but anything could happen to disrupt their results going forward.
• The oil/gas "results" are speculative but based on current options prices and the fact that oil and gas have been more expensive than solar electricity since at least 2016.
• Options and futures trades like this involve extra risk that you should understand before investing. 

With all that being said, if interested, please subscribe!

Short oil reestablished; the challenge in automated trading

This past week:

• Oil went nowhere, and I just let the existing trade expire worthless and reestablished it Thursday
• Equities rallied a little bit on the "not yet papered" trade deal and then cooled off by the end of the week

And as I've mentioned here, I've been working on automating the trades from Navigation Trading.

This is supposed to be doable with relatively high-level software from Interactive Brokers:

https://interactivebrokers.github.io/tws-api/spread_contracts.html#bag_opt

The image of trade automation is like this:

The reality of Interactive Brokers' software is more like this:

That's right: it doesn't work! It's even supposed to be available in Python, but even the C++ doesn't work for what I need to do: option "spreads" on equity and futures.

There are a couple of open source providers who provide "fixed" versions of the C++ implementation, and one of those works well enough that I was all set to use it. I got a couple of useful suggestions from someone watching the Github site for this one, and it looked like I was off to the races.

But then I got to trying futures options spreads, and the version (9.71) of the Interactive Brokers' API that this "good" one was supporting doesn't support that.

The other one does, it says .. but I could only get it to work on its example S&P 500 futures  (/ES) and not on anything else I tried.

My client said that 75% or 80% automated isn't good enough, so I went back to the drawing board ...

There are a ton of trading technology firms around Chicago and New York, and I talked to several, including:

• CTS Futures
• Onixs.biz
• CQG
• Trading Technologies
• Vela Trading

A couple of these haven't responded yet, but none of CTS, Onixs.biz, nor Trading Technologies support anything but futures! Meaning: no NFLX, no IBM, no TSLA ... 

I even called Vela but hadn't heard back from the right person by the end of day today. 

I was hoping to find a working higher-level software implementation, and TT seemed to fit the bill with a REST API sort of setup. So I was especially disappointed to get the 'no equities' message from them.

Finally I got to looking around, first for FIX protocol training ... then thought to look for Interactive Brokers FIX support ... and of course I found it!

So I'm back to low-level C++ ... or maybe Go ... more next week!

Short oil trade wins, as expected; new ad on Navigation Trading just released

The price of oil doesn't seem to go up no matter what happens ... this past week an Iranian oil tanker was supposedly attacked ... the price of oil's response?

Specifically, the price spiked very briefly to $55 or so then oozed back down ... currently $53 and change:

I scraped together enough to fund an account with enough to do this trade ... So my short 58 call and the short 49.5 put I added late last week look to be expiring worthless on Thursday as expected ...

And just to reiterate: I am soliciting clients who'd like to take advantage of this profitable trader but who don't feel interested or capable of doing the trades themselves. My new Craigslist ad on the subject just went up this evening. Let's talk soon if interested!

Thanks ....

No risk to the upside ... a condor I hadn't seen before

Hi All ... sorry I'm late with this post as I was busy with the trade automation project I'm working on (more about this below) much of this past weekend.

But the Navigation Trading guy put through a trade this past week that got my attention. SPX was around 2885 last Thursday the 2nd, having been sharply down during the day. So the trade came through like this:

SELL -1 IRON CONDOR SPX 100 (Weeklys) 9 OCT 19 2895/2900/2830/2800 CALL/PUT @6.60 LMT 

I saw this go buy and just thought, "hm, kind of close on the upside ..." then it hit me a few minutes later:

• Max loss on the upside $5 ($2900 - $2895)
• BUT $6.60 credit received
• SO: max loss on the upside ... is a $1.60 (i.e. $160) profit!!

This is just what the doctor ordered:

... as SPX rocketed back up around 2950 the next day!

This trade only works this well with a little volatility in play (like now -- VIX closed 17.86 today) ... but a backtest since 2009 should show this Fabulously Profitable. You almost always either win small or win big ... probably only 5% of these trades should be losers ...

And once again: Navigation Trading available as a to-be-automated service and I can push these trades through for you 'by hand' in the interim. Details here.

Thanks!