Join us for this special session on trading Technical Analysis and Option Strategies on Indices. The OptionsPlay Research team has run backtests on the Nasdaq-100 and S&P 500 over the past decade and share our exciting findings of the performance of technical indicators and popular optimized options strategies.
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Hi Tony, do you know why the liquidity is so low on XND? I checked both September and January monthly expirations, all strikes have a low single or double digit open interest and the bid/ask spread is somewhat wide for an index option, so it seems these would be hard to trade, but I keep setting you talk about them. What am I missing here?
NQX and XND are untradable, absolutely no volume.
@joesemo Wrong. Cash settlement on the indexes =no overnight risk as with the ETFs as well as 60/40 favorable tax treatment with the indexes vs ETFs which are taxed at 100% short term capital gains rate.
@Stephen I use my IRA. So only taxed as normal income
@Stephen my thoughts exactly, thanks for confirming. I was excited about the tax advantage of the index options but not liking the illiquid nature of these. Bummer. I am shocked there isn’t more volume but will stick to ETFs and deal with the higher tax rate as usual.
@Brendan McCann Well the size of the contracts only really matters if you are trading single leg strategies. You could easily convert your single leg strategies to spreads and use the same strategies in the actual indexes NDX and SPX and still get the tax and cash settlement benefits. Thats what I do. RUT can be tricky as it has much lower volume than the other 2 but still tradable.
@Stephen Good point, though I usually prefer naked puts much further OTM for the same credit as I’d receive with a spread. They’re easier to roll as well. I am trading on portfolio margin so the capital requirement is usually minimal, but on NDX it’s high for obvious reasons. I did like the idea of the micro index because I like to start with one small contract and leave myself room to add more by dollar cost averaging if the underlying continues to fall. I will have a look at spreads again, however when I look at NDX Jan OTM puts, I am seeing about $5-wide bid/ask spread on many of the strikes, and with multiple legs for a spread, that kind of bid/ask would be a nightmare to fill. Might just have to stick with QQQ and hope someday the liquidity comes to XND.
I needed this video lol
Glad it was helpful!
The video that I have been waiting for. Thanks so much and you are always giving out so much educational information.
Thanks for your support, Andy!
Such a wealth of info!
Thank you!
S&P500 actually performed 2%+ better than shown with dividends added
Thanks, Tony! This is very valuable info for traders. Thanks for sharing this work.
My pleasure!
Thanks Tony. very valuable.
Thank you!
Thank you Tony for sharing your findings. Very timely indeed!
Thanks for watching, Viva!
this is an amazing amount of work and a wealth of information. Thank you …..Hard numbers that can help traders navigate through the daily news with clear direction and proven statistics..
you need to measure performance in terms of sharpe ratio instead of absolute annual return. From what i can see most of your ‘winning’ option strategies have far worse sharpe ratios than their underlying index. when trading options a very important factor to consider is implied volatility, which seems wholly absent from your analysis.
Thank you Tony for sharing the details of your analysis… Definitely an eye opener. Always enjoy and look forward to your educational information….
Thank you for watching!
Wow! Great video! I learned a lot! Keep up the great work!
Will do! Thanks for watching!
thanks man, this is great. my only suggestion would be a to get a gaming headset that has a quality microphone
Hi tony RSI20, EMAs, MACD you have picked should be viewed in hourly chart or daily chart or weekly chart?
Thanks for doing the hard work for us!! Folks this info is top notch!👍
you are the best option educator out there with superb clear analysis of index options. look forward to your backtesting for equities options. May you teach us how to do back test for options?