In less than two years, 30 Year Old Louis went from having a background in the financial services industry to being a full-time trader. Following an independent study at Boston College as well as a tastytrade binge, this native of Pittsburgh decided to make options trading his day job. Find out why Louis prefers to sell Strangles at the 20 delta mark, how he extends duration in times of low volatility and why he credits sizing as a key mechanic. Plus, get his take on passive index funds and why he avoids directional trades if he can help it!
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Link do Vídeo
Is the reason for product indifference because one should look at the IV of the stock when trading strangle?
damn only strangles this dude is wild
Here is an analogy I would enjoy hearing Tom’s (or anyone’s) comments on:
Suppose there is a very long pier jutting out into the ocean, and every morning, hordes of fishermen go out onto the pier and stand shoulder to shoulder all along both sides and on the end. They all drop their lines in the water at the same time and start fishing. For a while, a few people are catching fish; some of them get a big fish and some of them get small fishes, and some of them use up what little bait they had fairly quickly and have to go home. At some point, one of the fishermen on the right side of the pier notices that the fishermen on the left side of the pier are catching a lot of fish. He goes over to the left side and looks out at the water, and yells at the fishermen back on the right side, "There are so many fish over there that they are jumping out of the water and everyone is catching loads of them!"
So the fishermen on the right side of the pier all rush over to the left side and quickly drop their lines in the water. But it doesn’t take long to realize that since there are the same number of fish but now twice as many fishermen, the fishermen are all now catching fewer and smaller fish.
Then one of the fishermen notes that the ones who are catching fish are using live bait instead of lures, so all the fishermen at the rail run ashore to the bait shop and quickly buy up live bait. Some of the fishermen who had caught only a few small ones so far are forced to cut up their catch instead and use it to try to keep on fishing, too.
After a while, all the people now fishing with live bait still ends up catching fewer fish, until one of the fishermen sees that those who are using sophisticated fish finders to tell them exactly where to fish are doing much better than everyone else. Now everyone else runs ashore to the store again and buys all the expensive fish finders and rushes back out. In no time, they all identify the same historical trends of who caught what fish at what depth and using what bait, and as soon as everyone follows the trend and fishes exactly the same way, the inevitable happens and there are still far too many fishermen trying to catch the exact same fish.
At the end of the day, all the fishermen go home. A few had caught a couple of big fish and were happy; a lot more had a few smaller fish and considered it only a small loss; quite a few however used all their bait plus everything they had previously caught and cut up for additional bait so they had nothing left at all. While only a small few came out ahead, the rest went home to study how those lucky few did it so they could go back out tomorrow and try to catch their fish the same way.
And at the end of the day, the only people who made any money are the ones who sold everybody all the bait and the fish-finding tools.
when he says there is a gap between what a tasty trader knows and what a pro knows. is he impying that the prof fund managers know more than the average tasty trader or is it the other way around
Tom, have you thought about doing a rising stars -where are they now edition? See how they have performed continuing into events like 2020 and the volitility we are getting now in 2022.
Question for TT, if they still monitor this. What is the difference in expected profitability between rolling the untested side, and taking off the entire trade and re-establishing the trade again around the new market price? The method I am talking about is, if your stangle goes ITM on either side, close the whole stangle and reesablish a new strange at .16 delta. By re-establishing the trade, effectively you are rolling up the untested side AND rolling down the tested side further away from the money. you will pay a net debit for this, but it reduces your gamma risk and takes the trade back OTM. This will also ensure your theta remains high, as if one side goes far ITM, theta will drop. You won't be able to get out of the original trade for a profit, like you can with rolling the untested, but you can make the profit back on the re-established trade. Do you think these two methods are comparable in expected long term profitability?
Great interview! Interesting that he chose strangles. And at 20 delta to sell. I have been told that in buying them 30 delta is the most bang for the buck due to the Gamma Curve if the underlaying moves more than 2 points. But for selling them, I would pick a lower delta in order to kind of play it safe so to speak. But that is a naked position, my broker would more than likely make me turn it into an iron condor in order to meet the margin requirement, as well as my option level that limits it. Gona have to try this on Thinkback and see if its for me, and if I can get that level.
LOUIS, I too am in the Pgh area, looking for a mentor. Would love to an opportunity to talk with you. Maybe you can help me turn the corner. If interested, let me know how I can contact you directly, and there might be a PriBro's sammich in your future! Thx!
Tom Sosnoff, I want to be this guy! Awesome video!
What do they mean by scalping?
Does anyone know why he may have lost so much money around May, 2017. I can’t see anything unusual with the SPX or VIX. Maybe he was trading commodities.
what do you mean by five delta positions? 0.5? Thanks for the reply
I wonder if this guy is still trading full time?
Base voice good
a question that could have been asked a lot more and should always be asked more: "why?"
captain stottlemeyer voice
Can we get an update how this man did in March 2020? Did he blow up his account or no? I feel like everyone can make money in a bull market but how did he fare in bear market/black swan event?
This is the dream. 😁 A full time portfolio manager.
I've tried the TT strategies. To me they are like watching paint dry selling IC's. Strangles unhedged scare the shit out of me. I'm sorry I can't ever see myself being comfortable with unlimited risk. I trade 1 DTE long straddles and butterflies in high IV works for me. Defined risk and flat every Friday before close. No worrying about positions over the weekend so i can live.
This is what I have doing and works at least to me.
Strangles is too BP reductionist.
I do in 40-50IV Rank, 20/25 delta..
Average close is 10 days, but 25% win rate.
And then put another one, I trade 3 lots for 1 lot strangle this guy do..
20 WD spreads had proven to win faster for me..
Also done 10WD 30 deltas, and I love it too..
But 20×20 has been good to..and I look the stock chart some..
People on TT seem to think that never buying is macho or something. This doesn't impress me at all, it just makes me doubt what they're saying.
is he playing with 5k or 500k…. If you dont disclose your account, how do I trust your account basis
It will work , if you have not started in 2020 …. Tastytrade never thought 2020 will hurt all of their strategies .. ALL of them
It's all about disciplines.