The tastytrade network

Good Trade Bad Trade - July 7, 2017

In the past, we have had many studies on the performance of [Strangles](https://www.tastytrade.com/tt/learn/strangle). Today, tastytrade's Research team aimed to add more color to this neutral strategy with enhanced visuals and more metrics. ### Study: * SPY, 2005-2015 * 1 [Standard Deviation](https://www.tastytrade.com/tt/learn/standard-deviation) Strangle * 45 DTE * Entered on every trading day * Compared results: * Held to [expiration](https://www.tastytrade.com/tt/learn/expiration) * [Managed](https://www.tastytrade.com/tt/learn/managing-winners) at 50% ### Results * Managing winners helped turn half of small losers into winners * Selling premium at [Higher IV](https://www.tastytrade.com/tt/learn/measuring-implied-volatility) levels collected more premium and improved overall P/L. * In some cases, the large losses occurred before the trades could be managed for winners.

In the past, we have had many studies on the performance of [Strangles](https://www.tastytrade.com/tt/learn/strangle). Today, tastytrade's Research team aimed to add more color to this neutral strategy with enhanced visuals and more metrics. ### Study: * SPY, 2005-2015 * 1 [Standard Deviation](https://www.tastytrade.com/tt/learn/standard-deviation) Strangle * 45 DTE * Entered on every trading day * Compared results: * Held to [expiration](https://www.tastytrade.com/tt/learn/expiration) * [Managed](https://www.tastytrade.com/tt/learn/managing-winners) at 50% ### Results * Managing winners helped turn half of small losers into winners * Selling premium at [Higher IV](https://www.tastytrade.com/tt/learn/measuring-implied-volatility) levels collected more premium and improved overall P/L. * In some cases, the large losses occurred before the trades could be managed for winners.

Tony, Pete and Brick discuss the accuracy of EOD Management. Most of our research studies utilize end-of-day data, does this neglect the potential of intraday [management](https://www.tastytrade.com/tt/learn/managing-winners)? ###STUDY: * Back tested two different scenarios: 1.Short 16 [delta](https://www.tastytrade.com/tt/learn/delta) Strangle (16 Delta Call, 16 Delta Put) 2.Short 30 Delta [Strangle](https://www.tastytrade.com/tt/learn/strangle) (30 Delta Call, 30 Delta Put) * Analyzed losing trades by isolating [occurrences](https://www.tastytrade.com/tt/learn/number-of-occurrences) were the trade hit 45% of max profit, but were not managed and became a loss. * 2005 – Present ###RESULTS: 10% of the losing trades reached 45% before reverting and becoming a loser. These trades didn’t hit 50% in our study. If a trade hit 49.9% of max profit using this data, it was not considered managed and could have turned into a loss. This is not 100% reflective of active trading, we know that the market fluctuates throughout the day, as does [implied volatility](https://www.tastytrade.com/tt/learn/implied-volatility). This makes the case of being active throughout the day, management opportunities may not always present at the open or close.

Tony, Pete and Brick discuss the accuracy of EOD Management. Most of our research studies utilize end-of-day data, does this neglect the potential of intraday [management](https://www.tastytrade.com/tt/learn/managing-winners)? ###STUDY: * Back tested two different scenarios: 1.Short 16 [delta](https://www.tastytrade.com/tt/learn/delta) Strangle (16 Delta Call, 16 Delta Put) 2.Short 30 Delta [Strangle](https://www.tastytrade.com/tt/learn/strangle) (30 Delta Call, 30 Delta Put) * Analyzed losing trades by isolating [occurrences](https://www.tastytrade.com/tt/learn/number-of-occurrences) were the trade hit 45% of max profit, but were not managed and became a loss. * 2005 – Present ###RESULTS: 10% of the losing trades reached 45% before reverting and becoming a loser. These trades didn’t hit 50% in our study. If a trade hit 49.9% of max profit using this data, it was not considered managed and could have turned into a loss. This is not 100% reflective of active trading, we know that the market fluctuates throughout the day, as does [implied volatility](https://www.tastytrade.com/tt/learn/implied-volatility). This makes the case of being active throughout the day, management opportunities may not always present at the open or close.

Opening Bell - July 7, 2017

Opening Bell - July 7, 2017

For this segment of Closing the Gap Futures Edition, Tom, Pete, and Beef discuss the current state of Contango. The Aug-Sep spread looks volatile, but is this unusual? In comparison to previous years, 2017 is relatively stable. With a continued rally in Crude Oil, it is possible we might observe a flattening in the contango and a switch to backwardation. Pete, Beef and Bat present the ways we can trade this reversion. The first strategy is directly buying the /CLQ7 and selling the /CLU7 (Buying the calendar spread). The second is an indirect play longing Crude Oil through products such as USO, XOP, and OIH with strategies such as Short [Naked Puts](https://www.tastytrade.com/tt/learn/naked-options), Put [Ratio Spreads](https://www.tastytrade.com/tt/learn/ratio-spread) and [Jade Lizards](https://www.tastytrade.com/tt/learn/jade-lizard). ###CRUDE OIL Contract Specs * Symbol: /CL * Contract Size: 1000 BARRELS * Delta: 1000 * Minimum Tick: $0.10 * Tick Value: $10.00 * Expiration: MONTHLY

For this segment of Closing the Gap Futures Edition, Tom, Pete, and Beef discuss the current state of Contango. The Aug-Sep spread looks volatile, but is this unusual? In comparison to previous years, 2017 is relatively stable. With a continued rally in Crude Oil, it is possible we might observe a flattening in the contango and a switch to backwardation. Pete, Beef and Bat present the ways we can trade this reversion. The first strategy is directly buying the /CLQ7 and selling the /CLU7 (Buying the calendar spread). The second is an indirect play longing Crude Oil through products such as USO, XOP, and OIH with strategies such as Short [Naked Puts](https://www.tastytrade.com/tt/learn/naked-options), Put [Ratio Spreads](https://www.tastytrade.com/tt/learn/ratio-spread) and [Jade Lizards](https://www.tastytrade.com/tt/learn/jade-lizard). ###CRUDE OIL Contract Specs * Symbol: /CL * Contract Size: 1000 BARRELS * Delta: 1000 * Minimum Tick: $0.10 * Tick Value: $10.00 * Expiration: MONTHLY

Daily Dose - July 7, 2017 - MSFT Plans Layoffs

Daily Dose - July 7, 2017 - MSFT Plans Layoffs

Forward Slash - July 7, 2017 - Missing the Ebb and Flow

Forward Slash - July 7, 2017 - Missing the Ebb and Flow

tastytrade LIVE - July 7, 2017

Confirm and Send - July 7, 2017 - Capital Allocation in a Margin Account