2017 Trading Thread - Page 3 - Business, Finances and Investing Forum

I've heard it touted a few times in here, but I still don't understand the "uniform betsizing" thing. Shouldn't I be tailoring the size of the trade to the underlying risk, and my confidence in the correct answer?

I think you're in the right mindset. I try to trade according to uniform portfolio risk but can do a lot better job of it. Let's say I'm trading $100k and willing to risk 0.5%. That may then mean 200 shares of AAPL at $100 or 1000 shares of HOS at $5.

01-04-2017 , 11:19 PM

#52

jb514

veteran

Join Date: Oct 2009 Posts: 2,837

By uniform bet sizing I mean keep your risk per trade/strategy fairly consistent. I like to look at risk per trade just in terms of pnl, shares or position is frequently irrelevant. So if I think the probable downside is 4 pts and I want to risk $5k, I'd get in 1200 or 1300 shares.

If I identify four set ups I want to trade, it's better to risk more or less the same amount on all four set ups(liquidity permitting). I see a lot of guys trade vastly different sizes based on their "conviction" or some other variable they haven't tested and inevitably they turn a fairly consistent strategy into a very volatile strategy.

01-04-2017 , 11:35 PM

#53

ibavly

2010 PSOP Champion

Join Date: Feb 2010 Posts: 24,513

What are people's thoughts on leveraged ETFs? They get a lot of hate but not sure it is warranted.

By various risk adjusted measures they do tend to perform worse than unleveraged.

01-04-2017 , 11:37 PM

#54

stinkypete

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Join Date: Jul 2004 Posts: 15,783

Quote:

Originally Posted by ibavly

What are people's thoughts on leveraged ETFs? They get a lot of hate but not sure it is warranted.

By various risk adjusted measures they do tend to perform worse than unleveraged.

they're great for shorting (if you can get cheap borrow)

01-05-2017 , 12:05 AM

#55

As1an1nvas1on

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Time decay?

01-05-2017 , 12:21 AM

#56

stinkypete

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Quote:

Originally Posted by As1an1nvas1on

Time decay?

time decay is options terminology that doesn't really apply. they decay for other reasons.

01-05-2017 , 12:25 AM

#57

As1an1nvas1on

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Quote:

Originally Posted by stinkypete

time decay is options terminology that doesn't really apply. they decay for other reasons.

Ah got it.. google is fun and math makes sense

01-05-2017 , 12:34 AM

#58

stinkypete

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Quote:

Originally Posted by As1an1nvas1on

Ah got it.. google is fun and math makes sense

the volatility decay or whatever they may call it isn't really decay. the real decay is from trading costs/slippage/etc when they rebalance.

01-05-2017 , 12:38 AM

#59

As1an1nvas1on

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Join Date: Jul 2010 Posts: 4,352

Quote:

Originally Posted by stinkypete

the volatility decay or whatever they may call it isn't really decay. the real decay is from trading costs/slippage/etc when they rebalance.

This also makes a lot of sense

01-05-2017 , 01:23 AM

#60

ibavly

2010 PSOP Champion

Join Date: Feb 2010 Posts: 24,513

Yeah the volatility decay seems to be the biggest thing people have going against it, which is somewhat silly. I agree transaction costs might be crippling, need to look into that.

Over a long time horizon do you expect the leveraged account to generate lower returns than the regular one in terms of total returns (ignoring volatility)

01-05-2017 , 12:44 PM

#61

ASAP17

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Join Date: May 2008 Posts: 5,882

Those 100k TLT calls almost have doubled today on a 1%+ move, probably going to take some profits as we hit $122. Really pleased with the action across the board today.

01-05-2017 , 12:52 PM

#62

daChimp

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Join Date: Nov 2009 Posts: 7,350

Happy New year. Subbed for another year.

Looking to take the lessons learned in 2016 and apply in 2017.

Started off making a few swing trades around CES 2017. VUZI is gonna be interesting in 2017.

01-05-2017 , 01:39 PM

#63

:::grimReaper:::

veteran

Join Date: Jul 2010 Posts: 3,113

Quote:

Originally Posted by ASAP17

Those 100k TLT calls almost have doubled today on a 1%+ move, probably going to take some profits as we hit $122. Really pleased with the action across the board today.

Nice trade.

01-05-2017 , 01:58 PM

#64

Smokey_The_Bear

old hand

Join Date: Jan 2009 Posts: 1,739

Quote:

Originally Posted by ibavly

What are people's thoughts on leveraged ETFs? They get a lot of hate but not sure it is warranted.

By various risk adjusted measures they do tend to perform worse than unleveraged.

Contango destroys these long term right? Obviously they can be pretty profitable as a short term thing. I think there's better investment vehicles if you want to leverage yourself on an underlying asset.

01-05-2017 , 03:36 PM

#65

:::grimReaper:::

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Join Date: Jul 2010 Posts: 3,113

Quote:

Originally Posted by Smokey_The_Bear

Cotango drag only applies to commodity or VIX ETFs.

01-05-2017 , 04:14 PM

#66

JL514

because i can

Join Date: Nov 2006 Posts: 9,820

subscribing for the new year. gl us!

01-05-2017 , 04:45 PM

#67

formula72

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Join Date: Mar 2007 Posts: 4,310

Shorted NFLX 132.29

First trade of 2017.

01-05-2017 , 04:56 PM

#68

As1an1nvas1on

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GPRO decent move, holding till I get a signal. In TECK

01-05-2017 , 11:09 PM

#69

Jupiter0

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Join Date: Sep 2009 Posts: 2,470

Long bias NAK on green

01-05-2017 , 11:13 PM

#70

rand

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Join Date: Feb 2007 Posts: 4,137

Quote:

Originally Posted by formula72

Shorted NFLX 132.29

First trade of 2017.

Did you borrow shares? I think you might be in a tough position if you did.

01-05-2017 , 11:15 PM

#71

rand

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Join Date: Feb 2007 Posts: 4,137

LOL almost posted this but didn't feel like it.

Quote:

Originally Posted by stinkypete

time decay is options terminology that doesn't really apply. they decay for other reasons.

stinky is right in that its not time decay, but it sort of feels like it is bc assuming the price of the underlying remains constant, the longer you hold the more you lose.

They are really just management fees.