"Dynamic" Options Strategies
In order to offer only the best, you will able to the web trading area where you can interact with our automatic systems that build and examine around 4000 strategies weekly.
The filters we set will discard 99.5% to make sure you ONLY offer the best ones, those with greater potential, probability of success and lower risk. We present them in accordance with the current trend, daily supported by descriptive technical analyzes of our expert systems.
The best strategies, the best analyzes and the awareness that the strategist will send you a correction of the strategy in case it becomes necessary.
The top 10 of this year
What are they
They are the performance or the risk profile of an Options strategy, which is always represented by a graph called PayOff. This graph includes all the possible combinations of Strike, series (Call or Put), and expiry dates, by providing the Trader with a unique outcome, which therefore considers all the features composing the strategy..
The trader builds Strategies with Payoffs having Long, Short or Neutral profit directions and definite features such as the maximum gain that can be obtained or the maximum loss that one could incur..
Below is indicated how a “Dynamic” strategy is transformed.
Let’s suppose you started trading with a bull strategy, with a maximum loss of 300 and maximum gain of 450 and that trading started when the underlying was at point (1), with the belief that it was headed right, towards the gain area.
After some time, we estimate that the underlying DID NOT follow our predicted path, but reached point (2). At this point subscribers will receive an e-mail with all the information relating to the transformation of the strategy. By applying our suggestions, the strategy will change into the PayOff drawn with the orange line with respect to the initial one drawn by the blue line.
As you can see, the new picture is bearish, it will gain if the underlying goes down and the preceding loss area turned into gain area. The maximum loss of the new picture is 200 and maximum gain 300.
This is the great advantage of “Dynamic” strategies: moving their shape in relation to the underlying movement so that loss areas do not cause losses or cause at lease reduced losses in comparison with the initial strategy.
- sending corrections signals with the aim of increasing the profit probability;
- futures, indexes, (Dax, Stoxx, S&P 500, FtseMib, Euro Bund) and a basket of european and american stock;
- 3 types of direction (Long, Short, Neutral);
- minimum recommended capital € 10000 *;
- profit probability will be highlighted after logging into the service;
- Maximum Risk: depends on the type of strategy and it will be highlighted after logging into the service, considering that the new figure of dynamic strategies will have different risk values from the initial one;
- Maximum Gain: depends on the type of strategy and will be highlighted after the login to service, considering that the new figure of dynamic strategies will have different yield values different from the initial one;
- 88% of the gaining strategies on one back-test of 10 years;
- expected performance for single strategy;
N.B.: the capital required for each single strategy is indicated within the service as it corresponds to the maximum risk (unless otherwise indicated). Since we are dealing with dynamic strategies, in the event of modification, the preceding figure will be changed together with the risk parameters, and the risk could increase.
How the service works
You can subscribe to the service by choosing different options that can be found in the shop page. Let’s say you decide to subscribe to the service “5 strategies 1 month”. In this case, you will be able to access the web service for 30 days, to see all the present strategies (a minimum of 15), and to choose, among these, up to a maximum of 5. The choice can be made in different days, and therefore, even on the 29th day, you will be able to complete your 5 strategies, perhaps by choosing a strategy which ends the following month.
N.B.: the service also includes correction strategies (if necessary) but will end at the end of your subscription. In the example above, even choosing the last strategy on the 29th day, the subscription will still end the following day and you will not receive other correction signals.
How to use the service
Once logged in, the list of the current strategies appears. The user can see the details of each and can verify, with reference to that/those he is performing, the correctness of executed prices and quantities per market.
For each strategy, the user can see:
- Basket Orders: list of the operations to be performed, with relevant sign, quantity, instrument, price executed by the system;
- Payoff or yield to expiry date: graphic representation of the strategy on the straight line graph with reference (red signal) to the underlying price;
- Strategy Parameters: the portfolio Greeks, the consolidated, the at now, the maximum profit, the maximum risk and BEP (break even points);
- Underlying: list of underlying elements that compose the strategy with its features
- Options: list of options that compose the strategy: quantity, bid and ask prices, carrying value, Volatility, delta and monetary values;
- Glossary of used terms
How much can I gain
The following yield chart, daily updated is given by the sum of all the strategies, congruent to the Analisi section, that have been generated and published since the beginning of this service.
Past performance is not indicative of future returns.
Dynamic are those strategies that could be edited before their expiry date and by virtue of these corrections the maximum risk could also vary considerably.
Margins and capital commitment
Margins are the amount of money withheld to guarantee the counterparty from Margins Cash and Compensation. To know the maximum size of margin required, it is sufficient to check the “Max Risk” which coincides with the maximum margin. In fact, for every single strategy the “Max Risk” will always be expressed. Any corrections may modify the risk parameters considerably, and therefore the margin.
1- What is the cost of the service?
You can subscribe to the different service types that are available on the shop page.
2- Do the strategies have a fixed duration?
No, the strategies do not have a fixed duration and therefore the user can choose the one most suitable for him by evaluating the fields “expiry date” and “days till expiry date”.
3- How do you choose the strategy you want to follow?
By clicking on the appropriate button in the “Buy” column. The whole row corresponding to the chosen strategy will become green.
4- Will unsubscribed strategies be removed from the list of available strategies?
No, they will remain in the list but it will not be possible to access the details. Whereas the general values will be updated (e.g., at now) and then selected at the later stage.
5- Is there a time limit to accept a strategy after its publication?
No, there is not. However, it is advisable to start the strategy when the beginning is notified. As we know, waiting one day or two won’t make much of a difference, but a whole week could.
6- How will the new strategies be presented?
An e-mail will arrive that will invite you to visit the specific area of the Dynamic strategies. The new strategies will be recognizable on the first day because the “State” will be highlighted with the green character.
7- Which underlyings will be processed? On which markets?
The underlyings will be mainly Dax 30 Index, DJ EuroStoxx 50, S&P 500, FTSE MIB, Euro Bund and the main European stocks. The main markets will be Eurex, CME, IDEM and NYSE.
8- Are the strategies sent automatically or are they filtered?
Yes, our automated systems build and test about 4000 strategies weekly and 99.5% will not pass the exam.
9- Do the notification e-mails of operations to be executed contain the details of the operations to be performed?
No, they don’t. E-mails only notify whether there is either a new strategy or a new “move” to be carried out on an already existing/open strategy in the Dynamic strategies area.
10- For Dynamic Strategies, will operations be accompanied by a description?
No, since the user can view the payoff before doing the operation and know exactly what will happen.
11- Are you planning to open a forum?
No, at the moment.
12- Is FiveRocks Capital going to help to perform the operations indicated or to correct any errors?
No, the service does not provide any interaction between FiveRocks Capital and the user besides the Dynamic Strategies Area and the notification e-mail.
13- Is there a section containing closed strategies?
Yes, closed strategies remain visible for three days after the expiry date.
14- Is it required to subscribe to beeTrader?
No, this service is an end in itself and no further subscription is required.
15- Will there be a SMS notification? If yes, will that have an additional cost?
No, there won’t, as the modern e-mail services allow the configuration of a redirection via SMS.
16- Are the strategies divided by difficulty level?
No, they are not divided by difficulty, but they have a parameter called “Gain Probability” which represents the statistical probability calculated with the Monte Carlo Method, taking into account the historical volatility of the underlying.
17- Is it possible to find out at the beginning the minimal capital required?
Yes, it is the first rule of the Trader. The strategies are proposed at the minimum amount in order to build the figure and there will be some hundred euros’ strategies. It will be the user’s responsibility to calculate the quantities while maintaining the proportions of the various parts that compose the strategy, considering that any corrections could increase the initial “Max Risk”.
18- Will the strategies be the same for all users?
Yes, of course. What changes is the number of strategies that the user can subscribe to, according to their own type of subscription.
19- Do I have to always be in front of my computer?
No, you don’t. The strategies in options have the feature of being slower (delta) than the movement of the underlying. However, in the event of corrections, a notification e-mail will be sent. The corrections can also be performed on a Smartphone or Tablet if your broker provides this service.
20- When I manage to execute the order, if I find a different price than the one indicated, what should I do?
You have to execute it at the best price you find, trying to be “quick to act” and anyway, delay will not always be a disadvantage.
21- If I forget to perform an operation, or if I do something wrong, what should I do?
If an error has been made, it must be corrected, but if it is just an omission, it will suffice to verify that the market conditions are similar to the ones of the notification.
22- What quantity should I put in the market?
You are free to choose, but the ratio among the quantities must be respected. For example, if a strategy reports 1 sold and 2 purchased, you will not have to perform 10 sold and 10 purchased, but 10 sold and 20 purchased.
23- Will Market Makers present a sufficient quantity on the DOM of the options to perform all the quantities of all the users?
Yes, they will. The most liquid underlyings in the world were selected to guarantee the possibility of performing the operations.
24- Is it possible to know exactly the initial margin required?
Yes, it is, by simulating the strategy in the appropriate area provided by the brokers.
25- Are the strategies inclusive of hedges or are they at the discretion of the user?
There are three types of strategies:
1) defined risk strategies, and therefore, by their nature, they have hedges;
2) naked put or put discovered only on stock options in such a way that if the user chooses to be assigned he will be able to manage the underlying with calls or benefiting from dividends;
3) strategies in hedging. They will be Strangles that provide variable hedging (coverage) when necessary.
26- Is there a common thread among the strategies available, or will those who choose them have to pay attention to the portfolio delta?
No, given the present strategies the user will build his portfolio. For example, prudent users will put positive and negative delta strategies into the portfolio, perhaps reaching the algebraic sum of 0.