pTheta Naked Options Trend Following System Overview and Trade Analysis
The video below is intended to help explain the pTheta system. the pTheta system is a longer term short options trend following system that sells naked options in the direction of the trend.
In the video I take a look at a potential trade in the Russell 2000 ($IWM). I currently have an open $IWM trade and I’m not planning to take the trade, but the risk/reward is favorable. Backtesting suggests the trades have a greater than 50% probability of success so the 1:1 risk/reward for the sample trade creates a positive expectancy.
I apologize if I sounded a little distracted during the video. I have two very demanding cats and they were trying to get on my desk while I was recording. Presumably, they wanted to help us out and they clearly like trading options.