All Correlations Go to One: David Romeo on Double Calendars and Tail Risk
David Romeo had 10 double calendars that looked uncorrelated until one move hit them all. Here is how he now builds a portfolio around tail risk instead.
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Risk Management
17 posts tagged Risk Management.
Double Long Diagonals on SPX: Tom Lei on Calendars, Theta and Flies
Tom Lei explains where a double calendar's edge comes from and why he moved into double long diagonals with a built-in floor of about $10 of intrinsic value.
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JJ Kinahan on Position Sizing and the 2 Spreads to Learn First
Cboe's JJ Kinahan tells Dan Sheridan why new traders should learn verticals and calendars first, start with one contract, and stay inside their risk band.
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From Wall Street Bets to Risk Manager: Tom Lei on SPX Options
Tom Lei went from WSB-era long calls to SPX calendars and double diagonals: two risk pillars, why he rarely worries about win rate, and his backtested target.
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Analyze Tab: Monte Carlo, MAE/MFE and Profit Factor in Option Omega
David Romeo walks through Option Omega's new Analyze tab on an MEIC backtest, from a 1.05 profit factor and MAE/MFE to Monte Carlo and synthetic losses.
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Iron Condors Explained: Strikes, Deltas, Width and Where Trades Go Wrong
Dan Sheridan builds a 22-day SPX iron condor and explains how strikes, deltas, width and duration shape risk, and the delta levels he watches for trouble.
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Tom Sosnoff on 0DTE, Automation and Where Retail Options Trading Is Headed
Tom Sosnoff tells Dan Sheridan why he barely trades 0DTE, why 30+ days is his wheelhouse, and how he thinks about automation and position size.
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Option Omega Stop-Loss Types: Basic, Per-Leg, Trailing and 1-Second IMSL
How each stop-loss works in the Option Omega backtester, from basic and per-leg stops to trailing stops, 1-second IMSL and two consecutive hits at stop-loss.
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The End of the PDT Rule: Scott Sheridan's 7-Year Fight to Kill It
Scott Sheridan spent years pushing FINRA to end the $25,000 pattern day trader rule. He explains how it happened and his view of the new $2,000 minimum.
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Moving From Risk to “Risk-Free”: Tomas Byron Explains the Condor Nest
Tomas Byron explains the Condor Nest, which starts with a double calendar and converts it into an iron condor to change the risk profile and provide margin relief.
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The Time Bomb Butterfly: A Cheap Speculative SPX Options Trade
Dan Sheridan models the time bomb butterfly, a 4-day SPX put fly that costs about $80 to $95 and pays off if SPX lands in a chosen zone by Friday.
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Big ERN on 15 Years of Selling SPX Options: Sizing, Stops and 0DTE
Karsten Jeske (Big ERN) has sold S&P 500 options since 2011. How he sizes for a once-in-40-year event, why he dropped VIX hedges, and how 0DTE smoothed returns.
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How a Professional Trader Uses Backtesting: Tomas Byron on Premium Data
Tomas Byron uses Option Omega backtests as a data source, not a strategy finder. Here is his method, plus his views on volatility premium and calendars.
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Tesla Options Trade Ideas: A Ratio Diagonal Instead of 100 Shares
Erik from Outlier Trading builds a long Tesla trade with options, from chart context to a ratio diagonal modeled in Option Omega, plus the bearish put version.
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5 Principles of an Options Portfolio: How Dan Sheridan Builds One on SPX
Dan Sheridan builds a four-trade SPX options portfolio, about $2,000 per trade, to show how he spreads entry days, strategies, durations, deltas and theta.
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0DTE Portfolio Backtest: 3 SPX Strategies Combined (Is 0DTE Dead? Part 4)
Is 0DTE dead? Part 4 combines a power hour condor, a McRib butterfly and a NORB condor into one portfolio backtest, then shows the 28% drawdown uncapped.
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Does Options Automation Match the Backtest? 8 Weeks of Live QQQ Trades
We automated a QQQ double calendar and compared eight weeks of live trades with the backtest, looking at strike selection, fills, and exit timing.
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