A.I.M. Users Bulletin Board

[Conrad]

PraveenP,
I appreciate your remarks and advice as to what is the "best way" for the trading strategy but at the moment that is not my priority. Many years ago I already concluded that a simple AIM strategy is not well suited for options because of the "short run time" and more than that, Options did not fit the basic assumption under the Old AIM that one needs to "update" only once in a Blue Moon and for the rest one would spend his life just going to work, mow the lawn, buy groceries, tend to the kids and the wife and go to Church, and if there was time left maybe have a peek at the AIM Machine. . .
AIMing, and especially Vortex Aiming, has become an activity that for many AIMers has become a serious hobby or even a significant, or perhaps a primary, source of income. . .I am looking at it from that perspective and asking the question: "How do I need to modify Vortex AIM for Efficient Option Trading in the future?".

For any equity with high volatility the partial in-out-in-out. . principle to cream the profits is no different than it is for simple share-trading, but with Options one better not relax and let things ride for a month. . .then to think: "Maybe I might have a look at my Options, tomorrow, if it is raining, and the wife is having a chat with the Girls at The Tea Party, and when there is noting else to do".

Also the Margin Requirement for a Sell Option ties up capital so for someone with little cash the options with Option Trading are limited. . .Still I have started to "Play & Tinker" with Penny Options, both buying & selling for the purpose getting "wet feet" on the mechanisms required for integrating it into Vortex AIM.

One thing is perhaps against it. . . very aggressive trading that in Vortex AIM is an "option" for low volatility equity trading to get the ACTION beefed-up. . .things can get rather complex if one starts using Hold Zones, CER, SAFE, Aggression Factors on top of the factors that must be taken into account for Option Trading.

That is basically the background for my current effort and if any one would have +/- remarks on the Option Trading Mechanics using an AIM strategy I would like to discuss them. For example treating the Reserve as a Margin Requirement is fine, but only as long as you realize that you cab not open extra options with it. . .So one would need a much larger Reserve and put a restriction on the spending do that the Margin Requirement is satisfied. . .things like that.

The AEX which I an using now for Option Trading is not very volatile but the cost of trading 1 contract is between € 2.30 and € 2.90 and in some cases the closure of a contract below a certain price is "gratis". . .This provides for very high Hobby Yields.

For example, on the low end of the Penny Option one can easily realize gains at an Annual Yield from 50% - 500% and less frequently more much more than that if the volatility is high enough.

It is clear that gains of € 10 or so are not profitable if I count the time that is spend on it. . .if however I had € 25000 of spare cash tp play with then the actual profits I speak of can be increased 10-fold . . .I have only € 2500 to play with. . . for now