Kirk - can you say more about the methodology Trade Ideas uses to determine Alpha and EV? Would be helpful to understand how these metrics are derived.
Hi Kirk, just for fun, I dipped into my ToS and looked up this trade, at 1317 MST and I picked it up for $1.51. I REALLY liked how you walked through your thought process to reject a direct trade in IWM for Alpha/EV reasons and then pick DIA which had an option with more favorable probabilities and EV. I wouldn't have checked alternative symbols by hand, which the OA 2.0 does effortlessly. Sooo nice!!!! It seems very unlikely the folks at Schwab are going to allow incorporating OA into their ToS for Live Trading. Is this your assessment as well? Thanks! Dr Bill Kiele
Far as we know right now their plan is to offer an API for services, like OA, to connect to. But, it's not available yet nor do they have docs for it. Once it gets released we can better assess it.
Here's the research on EV and how we calculate it: optionalpha.com/blog/how-to-calculate-expected-value and here: optionalpha.com/help/understanding-alpha-and-expected-value We've published a lot of open research on EV, POP, Alpha etc in this category on our blog if you want to follow along: optionalpha.com/category/research-insights
This is a very helpful video, Kirk. I have to ask: It appears that this could benefit from AI being applied to it. I'm not a programmer but you have these tables with all of this info that a proper AI script could sort through and create a list of optimal trade opportunities. Any chance of you or one of the geniuses on your team creating such a thing?
To a degree, that already happens when you autotrade using the "Find Trade Ideas" action. That action just automates the manual process I went through in the video and ranks all trade ideas matching your criteria by whatever metric is more important to you for entry.
They don't yet have a public API for options trading but please do continue to reach out to them and ask for an integration - we'll be ready when they are.
@OptionAlpha thanks for the reply. I'll do that. I've actually looked into a few other platforms, but Robinhood has the lowest fees and is currently paying 5% on unused capital!
Don't forget that both TradeStation and Tradier offer to pay for your OA membership and offer commission free trading when you trade through OA so it's pretty attractive all around. More details here: optionalpha.com/pricing
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Great work; it opens many new possibilities for an inquiring and curious mind - my journey has indeed begun.
Glad you like it! Thanks!
Thank you for sharing this. Critical component that I didn't know that was available
Glad it was helpful!
Kirk - can you say more about the methodology Trade Ideas uses to determine Alpha and EV? Would be helpful to understand how these metrics are derived.
Yeah we post all the methodology and calculations here: optionalpha.com/help/understanding-alpha-and-expected-value
Hi Kirk, just for fun, I dipped into my ToS and looked up this trade, at 1317 MST and I picked it up for $1.51. I REALLY liked how you walked through your thought process to reject a direct trade in IWM for Alpha/EV reasons and then pick DIA which had an option with more favorable probabilities and EV. I wouldn't have checked alternative symbols by hand, which the OA 2.0 does effortlessly. Sooo nice!!!!
It seems very unlikely the folks at Schwab are going to allow incorporating OA into their ToS for Live Trading. Is this your assessment as well? Thanks!
Dr Bill Kiele
Far as we know right now their plan is to offer an API for services, like OA, to connect to. But, it's not available yet nor do they have docs for it. Once it gets released we can better assess it.
How is the system determining this EV? How do we know it reliable vs POP? Please explain.
Here's the research on EV and how we calculate it: optionalpha.com/blog/how-to-calculate-expected-value and here: optionalpha.com/help/understanding-alpha-and-expected-value
We've published a lot of open research on EV, POP, Alpha etc in this category on our blog if you want to follow along: optionalpha.com/category/research-insights
hi! is this valid also for beginner only with calls and puts?
Yes, great for beginners but only works with spreads which have defined risk (and are better for beginners anyway)
Thanks a lot. it's very helpful.
Glad it was helpful!
7:01 .'..trying to get bullish exposure to the market" Arent these short call spreads a bearish strategy?
Yes I think I just misspoke bullish vs. bearish.
Does the system allow me to do this with specific stocks as well? GREAT VIDEO ... Happy Holidays.
Yep absolutely!
Great ... Thanks again for this video.@@OptionAlpha
You're very welcome - thanks for watching!
when will option Alpha will integrate Interactive Brokerss?
Have it on our roadmap this year
Awesome video!
Glad you enjoyed it!
very helpful!
Glad it was helpful!
Do you have any case studies like do you have examples of trades that were taken and how successful they were?
Yep, we publish a lot of research from trading across the platform here: optionalpha.com/category/research-insights
This is a very helpful video, Kirk. I have to ask: It appears that this could benefit from AI being applied to it. I'm not a programmer but you have these tables with all of this info that a proper AI script could sort through and create a list of optimal trade opportunities. Any chance of you or one of the geniuses on your team creating such a thing?
To a degree, that already happens when you autotrade using the "Find Trade Ideas" action. That action just automates the manual process I went through in the video and ranks all trade ideas matching your criteria by whatever metric is more important to you for entry.
Good stuff.
Thanks!
Any word on if Robinhood is considering coming on board?
They don't yet have a public API for options trading but please do continue to reach out to them and ask for an integration - we'll be ready when they are.
@OptionAlpha thanks for the reply. I'll do that. I've actually looked into a few other platforms, but Robinhood has the lowest fees and is currently paying 5% on unused capital!
Don't forget that both TradeStation and Tradier offer to pay for your OA membership and offer commission free trading when you trade through OA so it's pretty attractive all around. More details here: optionalpha.com/pricing
@OptionAlpha I'll take a look, thank you!