About this template
I was talking to a former co-worker in October 2022 and he mentioned that he had good results buying Apple on Friday and selling the position on Tuesday. I wanted to build a bot for small accounts that replicated that strategy, didn't require more than $500 capital, and didn't have to worry (too much) about PDT violations. This bot is the result of that conversation.
Some of the live positions have closed on the same day they were opened, which suggests the Exit Options could be improved dramatically, and would welcome suggestions.
Below are two equity curves comparing opening a $500 long stock position with and without a 10 day SMA filter. This is just to illustrate the impact of adding a filter would have.
Open on Friday @ 9:30/Closing on Tuesday @ 15:30
I didn't want to follow the strategy blindly. I wanted some type of filter to prevent me from opening positions when price action wasn't favorable. I initially settled on a filter that requiring the price to be above the 100 day SMA. This kept the bot out of the market until Jan 2023. After a few weeks of paper trading, I took the bot live. I subsequently modified the 100 day EMA filter to be a 10 day SMA filter.
Open on Friday @ 9:30/Closing on Tuesday @ 15:30 with Price > 10 Day SMA
Compare the two equity charts. The P/L shows a 30% (approx 900 vs 1200) improvement, while the drawdown without the filter is about 29% vs a 7% drawdown using the filter.
Capital Required:
The minimum amount of capital required for this bot is$500. More capital may be needed if the first few position entries are losses.
Position Entry:
Every Friday morning at market open, check to see if the current price of AAPL > 10 day SMA. If so, open a short put spread with a -.40 delta short put with a long put $5.00 below the short put. The expiration should be at least 6 days. The 6 day expiration will account for Friday market closures when the normal Friday expiration will be shifted to day prior to the normal expiration. The bot will re-run the opening automation at 9:45 on Friday if the position didn't open at market open.
Monitoring:
The bot sets a profit target of 50% of credit received when the position is opened. This exit option is set upon position opening.
Exit:
The position should close upon reaching a 50% premium capture. An additional time stop is set using scheduled events to close the position on Tuesday at 3:45 and at market close. A monitor also exists that will run on Wednesday until the position is closed.
PDT:
Positions may close on the same day they are opened. This bot doesn't currently check to restrict the position from closing on the same day it was opened. This bot won't cause PDT issues since it only opens one position each week. If this is a concern, enable the pattern day trading check under the exit options.
Bot Dashboard:
There are a couple of things that stick out on the bot dashboard. Under the Capital at Risk: The third hump (third position) is about 1/2 the size of the others. I initially had set the long put based on deltas. I changed it to be a fixed $5.00 below the short put. Secondly, one of the humps is longer than all of the others. The position didn't close on Tuesday, so I manually closed it on Wednesday. As a result, I added a scheduled event to close at 3:45 on Tuesday, and a monitor to close open positions all day on Wednesday. The last thing you may notice is there are some days where the P/L increases, yet the capital at risk for those days remain at zero. The capital at a risk metric is measured at the end of the day. This metric will remain "0" for positions that are opened and closed on the same day.
