About this template
As it says in the bot’s description this bot was inspired by the book The Unlucky Investor’s Guide to Options Trading, by Julia Spina & Tom Sosnoff @ tastytrade.
I say “inspired” because to fit with the OA features and functions some things had to be creatively tweaked a bit here and there.
It is designed to have a high probability, steady-eddy trading performance with a smooth upward trajectory and so far has accomplished that after months and months of testing and re-testing. To attain a high win rate the percentage gain is on the lower end. This is not a lottery bot that will make you 100% in a week. Therefore, it is intended to run with larger allocations and have decent, sustainable growth. However, in the comments below I have also built a PDT variant that can run on smaller accounts, particularly with a slight variation to the deltas to lower the capital required per position.
It moves like a flywheel… it takes a while to spin up in the beginning, but once it gets going regularly produces gains… tasty gains.
Scanner:
Opens high probability 45DTE SPY IC’s MWF @ .15 / .05 delta
Default position size is 1 contract.
(note: If you look through the scanner you can see the position is tagged with the VIX range level it opened at. In a previous iteration I was adjusting the position size based on the VIX level. As the bot evolved I moved to a fixed contract size because I wanted it to be easier to control at scale. However, I just left the VIX tagging in there, but it is more for additional information at this point and is not used beyond that. The bot could be modified to take advantage of that in the Monitor, but I haven’t done that.)
After a successful testing period on the base bot, I recently built a scaled up version that opens 10 contracts to simulate SPX sized positions for an even larger account.
Monitor:
Default profit target is 50% w/200% stop loss
As time marches on there are a series of profit target reductions.
If the position has not closed out at 20 days remaining it will be closed if it is marginally profitable or closed and “rolled” if the return is less than 0%. Because OA does not allow individual spreads to be managed separately the losing spread cannot effectively be rolled (at least not when the original position is opened as an IC instead of individual spreads... doing that would cut the total possible IC positions open in half, so I stuck with IC's). So, it just tries to open a “rolled” new IC position with the strikes adjusted and then shut down the current one. If you don’t like this approach you can just turn off the 20 Day Roll Toggle and the position will just remain open and continue with reduced profit targets until it is profitable or expires.
Hedging:
There is some hedging logic intended to offset loss in significant market moves. Default is looking for a >3% move up or down in the past two days.
Default is ON, but has not seen any action yet.
I have a Reserve Capital Toggle (ON by default) to ensure there is always sufficient capital should hedging be called upon.
There’s lots of other stuff in there if you want to poke around, but that’s the core of it… or just do like most people and disregard this summary and just clone and test to see how it does for you 😉 enjoy. The template is built with SPY, but other ETF’s and Stocks can certainly be substituted as you desire.
Performance:
Running with $50K allocation & $25K reserve since Dec 19, 2022
Book References:
