Hafnium Regular  Posts: 74 Joined: 1/1/2004 Location: Fairfax, VA  User Profile | When you Auto Trade Options in OT you have just multiplied the complexity of your setup by a factor of 2 or 3 - but its definitely possible. I've done it in the past with OmniPilot, and am currently doing it with Auto Trader / ATM My experience is with AutoTrading Directional Option Strategies Only -So, my answers are not applicable to Keith's question concerning Targeting Delta and DTE. Also, I have not tried scaling in or out based on levels. How to Do It? - There is a trimmed down version of Option Finder built into the Option Trade Plan. That means that you can instruct Option Finder to Find the best strikes/expirations based on your criteria (you give option finder a target, a time period to the target, and what optimization metric you want. Min/Max $gain, %gain, Risk, Risk/Reward, etc....) It picks the strikes and expiration. Just be aware that turning this on increases strategy processing time by multiple (takes 2 or 3 times longer). If running ARM strategies this becomes significant from a timing perspective. What the Trade Plan Option Finder functionality can't do however - is pick the option method. For example - it can optimize the strikes for a Long Call, or it can optimize the strikes for Max Gain on a Debit Spread. But it can't choose the option method for you. ie.. It will not choose say a Debit Spread over a Long Call or a Credit Spread. It only optimizes the method, not the Choice of the method. I also would not Auto Trade Options (lesson learned from experience) without using the built in Trade Filter and setting some safety parameters (max Bid/Ask Spread, min OI, Min Margin - to your taste). You could probably get by Auto Trading Options without the Filter if you only trade a Select Few, very highly liquid stocks. The Significance of this point is that - You must turn ON Option Finder to enable the Trade Filter. Thats a subtle point but turns out is very important if you think about it. I suggest that you develop your strategies with Option Finder off, then near the end of development turn it on. Finally, It took me around 3 to 4 months to create several ARM6 strategies that I "felt" were good enough to Auto Trade with (most of them are variations of the ARM6 strategies that Nirvana has provided to club members). It then took me an additional 2 to 3 months of testing Option Trade Plans to implement those strategies properly (first on OT paper account, then with GX Trader Paper Account, finally on a GX Trader Live Account). BE AWARE - There is a "bug" with respect to position sizing with options. The % of Equity Position sizing works fine with Long Options (buying a single call or put). However - if you trade spreads, ATM calculates the position size correctly, but when the trade is actually submitted to a live account, only 1 contract position is submitted. I reported this bug to Nirvana about 2 weeks ago. The work around (although crude), it to use fixed position sizing for spreads. You will note that the Debit Magic ATM method uses Fixed Sizing (for conservative) or Size to Equity (for aggressive). | |
