Options Trading: YouTube Channel (Simpler Trading)

I enjoyed listening to Chat with Traders Episode #69 with John Carter, who is an options/futures trader and founder of Simpler Trading and discovered their free video content on YouTube Channel.

John and his team also offer premium content as part of their paid membership service, and the free YouTube channel is a good introduction where they discuss trade setup and execution in detail.

Specifically, they discuss strategies on how to reduce risk using options contrary to the common perception of options as risky due to leverage.

Quantopian on Github: Open-Source Tools

In addition to the powerful platform that Quantopian provides, they have open-sourced some of their tools on Github which means they are able to be cloned for personal use and experimentation.

Their approach to algorithmic trading is very refreshing given the Wall St culture to keep all intellectual property (IP) secret – and rightfully so due to the competitive nature of the markets.

That said, Quantopian is approaching the markets as a crowd-sourced hedge fund and leverages the IP of many to construct profitable algorithmic strategies.

As a result, they are following the culture of many Silicon Valley to open-source their most common tools and social coding to improve upon them.

Chat with Traders #72: Trading Probability (Discovery Trading)

I enjoyed listening to Episode #72 with Rob from Discovery Trading, where he discusses his views on probability when trading the markets.

Although the interview is prefaced with a disclaimer regarding the scalping tactics used by Rob, I found his views on probability very interesting since they are relevant to risk management.

Kudos to Aaron for this interview and Chat with Traders, please keep up the great work!

Chat with Traders #75: Dan Aisen (IEX Stock Exchange)

I enjoyed listening to one of archived Episode #75 with Dan Aisen, who is co-founder of the IEX Stock Exchange.

IEX is a newer stock exchange which introduces features to minimize structural arbitrage tactics used by some High-Frequency Trading (HFT) firms and protect institutional investors.

During the interview, Dan goes into depth about market structure, HFT tactics and dark pool exchanges where IEX started out before being granted status as a stock exchange.

Dan also outlines his work in a detailed Quantopian blog post.

Kudos to Aaron for this interview and Chat with Traders, please keep up the great work!

Trading with Quantopian: Portfolio Rebalancing Strategy & Algorithm Example

Having spent some time with algorithmic trading platforms, I find Quantopian to be one of the most powerful and flexible in its offerings as follows:

1.  Free to sign up, backtest strategies and compete in their trading contest

2. Free plan offers many powerful data feed which are other subscription only

3. Platform is built around a large and growing community of active users

4. Some tools are open-source, and public algorithms can be cloned for use

That said, one of the simpler strategies is a portfolio rebalance across various asset classes. Turns out it is also conservative as well and intended for retirement accounts.

The strategy and algorithm are outlined in this community discussion post; the algorithm can be cloned as follows:

1. Sign up for a free account

2. Clone algorithm and run a backtest over a given time period

3. Once algorithm runs a backtest without errors, then deploy it live

Moving forward, feel free to modify the algorithm, which will then be under the code section of the account.

Python for Finance: Covered Call Options & Simulated Stock Returns

Running financial models with code is relatively easy provided that one has some previous programming and math/statistics experience.

That said, I have been working through the examples in the Python for Finance book by Packt Publishing and am sharing examples for pricing covered calls and simulating stock returns as listed below.

Source code of my updated examples are available on my Github repo.

Chapter 9, Example 15: Covered Stock Option Call

Chapter 11, Example 12: Simulating Stock Returns with Lognormal Distribution

OpenIntro Statistics: Summer Study for HES, Statistics E-100

I used part my summer to study up for my current course (statistical methods) at HES so am working thru the class textbook, OpenIntro Statistics.

The textbook is open-source, which means lots of useful updates/contributions and material is readily available for free. It was designed as a template for instructors to use for teaching their own courses.

That said, the topics has come in handy not only for class but in my study of algorithmic trading and financial markets.

Chat with Traders #69: John Carter (Options Trading)

I enjoyed listening to Episode #69 with John Carter, who is an options/futures trader and founder of Simpler Trading.

John discusses his trading style using options with focus on concentrated positions while managing risk. In particular, I found his tip on how to covered calls out of the money since they normally expire worthless.

Kudos to Aaron for this interview and Chat with Traders, please keep up the great work!

Python for Finance by Packt Publishing

I am spending the summer off between work and school semesters to learn more about algorithmic trading so started working through examples in  Python for Finance by Packt Publishing.

The book focuses on financial models and examples are algorithms implementing those models. There are easy instructions for installing Python and the examples run as scripts.

Having programming experience and some knowledge of financial markets, I was able to get up and running so would recommend the book for anyone interested in learning more about this topic.