Oil trade results so far and backtest results coming

As regular readers know, I've developed a point of view that the price of oil should decline over time ... so far I've done only 3 live trades on a small account:

• Oct 2 -> Oct19  +$360 (expired worthless)
• Oct 17 -> Oct 31 +$700
• Oct 31 -> Nov 19 +$800

These were all neutral trades, "short strangles" selling the 49.5 put and the 59 or 60 call.

I had to clear out this small account to handle some domestic expenses, so I put on a paper trade with the more desirable "ratio strangle" selling 2 of the 66 calls and one of the 54 puts.

So far that one looks like a winner too, up $320 so far and with probably another week or so to run until I close it and take the "virtual profit".

So far so good ... but some potential customers just absolutely require backtesting before they will invest.

Today I downloaded a free set of end-of-day of /CL futures pricing from Quandl .. which gives me some indication of backtesting results:

• 2019 -- looks to have lost only 1 (of 13 or 14) potential trades due to run-up from 47 to 56 or so January 1 to 16 ....

But in general it's a guessing game. Without the actual options data and expirations, we don't know where we would have entered each trade, and that makes all the difference. If the prices go up sharply the first part of January, but you happen to have entered the trade late Dec when the prices were higher, you're still OK for that one.

I requested a quote on futures options data from Ivolatility, which I hope to get on Monday.

So I'm waiting until I get the actual data to publish actual backtest results. With any luck I'll have that this coming week.

Details coming then ...

 

More stellar results published; a couple of possible resolutions to the automation challenge

Navigation Trading published November results ... profitable again (*yawn*) 😃It's not as useful as it could be, as they're vague about the size of account that's required to take full advantage of their trading plan (minimum, of course; one could scale this as high as desired if one wanted to do that).

So Navigation Trading for November:

+ $2581 

Their blog gives details on the "closing only" strategy, so please take a look at that.

Their Iron Duck strategy paid off this past week, as the market went mostly straight up:

As for my "short oil" strategy, I have a more traditional report of results:

+25.2%

Note that this is on a small account: $5400 to start, and the trade I put in took about 60% of the buying power available. On a larger account I wouldn't have risked quite so much on this single strategy, but you can see its potential.

But also: I

• sold the 59 call
• sold the 49.5 put

This is a neutral trade, not a short one ... what I will do when I have more money in the account:

• sell 2 calls
• sell 1 put

This is still neutralish, but with short bias ... and would have made even more money than the trade I put on.

As for the automation strategy: I had lunch yesterday with an old friend who's been down the same track I've been working lately of trying to get the Interactive Brokers API to work.

One piece of data he had: he said that they found that the live back end behaved differently than the paper trading account for the API .. some trades worked on the live API that didn't work on the paper API. Sheesh ... this defeats the whole purpose of trying this with the paper API!

As for Vela Trading, I finally talked to them and they're hugely too expensive: $20K per year per market ... whatever that means. (I am fuzzy on CBOE vs CBOT vs the 1800 futures markets) ...

So it's going to be Interactive Brokers or maybe TastyWorks ... I applied for the beta test program for their API.

More details 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 ....