Why OptionDōjō?
I built OptionDōjō because I needed it. I couldn't find any existing products with the features I was looking for. I required a trading system that was simple to use, could be used to execute a robust trading strategy with a daily effort on the order of 20 minutes, provided features to allow for simple construction and maintenance of a crash resistant portfolio, and provided a justifiable perceived edge for all trades. OptionDōjō is the result of that effort.
What is OptionDōjō?
OptionDōjō is primarily an options vertical spread trading platform providing the following critical functions:
Find instruments for which we can predict direction with edge (>50% accuracy) Find favorable and actionable vertical options spreads to enhance directional edge Track all positions and alert when either the options or directional edge has been lost Track portfolio beta and assist in maintaining market neutrality regardless of prevailing volatility Assist in choosing positions such that any large market move, up or down, will likely result in net profit What OptionDōjō is Not
OptionDōjō is not (yet) a complete trading system. It is only a very useful tool. As with any tool, results will vary with the skill and knowledge of the user. Among other things, a good trader should:
Maintain a basic level of market awareness Reject recommended trades that don't make intuitive sense Reject recommended trades where the expected move has already happened -- you may be too late Exercise caution trading when the underlying has broken out up or down -- breakouts can be unpredictable Reject those trades where you see chart patterns contrary to the prediction Filter trades when you have knowledge that the system doesn't know about, such as: - Insider trading
- Large material losses or gains that impact book value but are not yet reflected in currently reported book
- Big breaking news, such as M&A activity, windfall profits, dividend changes, etc
Adjust portfolio beta according to market conditions Maintain enough seperate positions so that the Law of Large Numbers works in your favor (10 or more is ideal) Have a strategy, and execute it When it is time to act, don't delay Always be aware of your max risk. Be prepared both mentally and financially to absorb worst case scenario losses. Use your intuition. If you don't understand the dynamics of an underlying asset or a particular trade do not engage. 