27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
- Joe Saluzzi was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. Tune in to the daily broadcast live Monday-Friday at 8 a.m. ET here.
- Saluzzi, Partner and Co-Founder of Themis Trading went into several issues in the show, including his firm’s history, his book, the IEX dark pool and high frequency trading.
- This article will focus on his comments on the latter subject.
After going into several subjects, Saluzzi was asked about high frequency trading (HFT) and Flash Boys, a book that –many consider- put HFT on the map, and which the expert considers a good place to start – same as Dark Pools by Scott Patterson.
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High Frequency Trading, Volatility And Risk
At one point in the interview, the expert was questioned about risk and high frequency trading: are high frequency traders involved in risky moves? Are they trading stocks moving 10 or 20 percent in just a matter of a few seconds -- like we’ve been seeing in the biotech space recently?
But, high traders “do like volatility,” Saluzzi explained. “Volatility helps because if you can see (…) the quotes faster,” because you built a system that’s better than most others out there, “then, the more that that quote moves, the better I’m going to be able to buy on the bid or sell on the offer or whatever it may be…”
So, high frequency traders’ system “relies on that type of volatility; they make their most money on volatile days,” he went on to expound. “So I can imagine in ’07 and ’08 how well they were doing…”
So, in conclusion, high frequency traders are not volatility-averse, but “they do manage their risk carefully.”
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.