The Mini-Me trade is a bull put spread with a term of 7 days.
The entry is based on a trend following indicator.
The return/risk ratio is very positive.
It is a modified version of the James Bond Trade which can also be traded with the 20k loss offset limitation.
Past performance results are no guarantee of future results.
MAR Ratio and Profitability
The win rate of over 70% is very good.
The MAR ratio indicates the relationship between drawdown and return.
Values above 1 are considered good, this strategy has a value above 6.
For me these are the two most important values.
Everyone can influence the CAGR and the drawdown themselves through the account size and number of contracts.
Example for a capital of $4,000
Max Drawdown: 6%
The annual return (CAGR) for 2 years is a good 33%.
Winners and losers
The ratio of average winner ($51) to average loser ($72) is great.
On average, you are only in the trade for 3 days.
Entry
The trade is only opened when the indicator gives a signal.
The indicator is included in the bot, but can also be deactivated.
The indicator is composed of various sub-indicators.
The indicator is a trend following indicator.
Exit
Take Profit: 80% on the Bull Put Spread
Stop Loss: 150% on the short leg.
One day before expiration 30 minutes after the stock market opens.
When the S&P 500 loses 1% compared to its entry value.
The Greek Delta
-
The bot will send you a message via Telegram as soon as it has opened the trade.
-
Incl. OptionStrat Link.
-
Instructions
The Greek Delta
-
The initial delta is approximately 11
-
In a rising market, the delta decreases.
-
In a falling market, the delta increases. Since the trade then becomes bullish and no longer matches our market opinion when entering, we have built in a stop loss at -1% of the underlying.
The Greek Theta
-
The initial theta is approximately 10
-
In a rising market, theta slowly decreases and we continue to earn the delta through theta.
-
In a falling market, theta rapidly decreases, as the long option gains significantly in value. At approximately -2.5% of the S&P 500, theta even becomes negative.
-
To avoid this, we have built in a stop loss at -1% of the underlying.
Configuration options
Margin
-
One trade in my demo account required about €1,700 in margin.
Order types Exit
The stop loss exit is defined as a REL order on the short leg.
The advantage of the REL order on a single leg is that it is executed faster and with less slippage.
The offset amount is $0.25
The Stop Loss Exit Order is linked to the Take Profit Order via OCA group.
In addition, the sale of the long put hedge is attached via a hedging order / pair trade.
Thus, after the stop loss has been executed, the hedge is also sold. Also via REL order. (Offset: $0.10)
Order types Entry
The bull put spread is purchased via a buy limit order.
The limit price is calculated from the midprice of the short put and long put.