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.

Brief Introduction to Algorithmic Trading

For anyone without programming experience but interested in learning about algorithmic trading, I would recommend the steps listed below to get off the ground running without getting side-tracked:

Learn Python to Hard Way – A good primer to get going quickly

Install Python with Anacaonda – Easy installation and comes with other useful tools such as iPython notebooks

Quantopian Lectures – Covers theory and implementation in Python; example algorithms can be easily clone and hosted on their platform

Additional Learning – Next steps would be continuing to study programming with books from O’Reilly and Packt which have publications on this topic and consider other languages for implementation

I recommend Python since it is easy to learn, and one can learn other languages once learning the first proficiently. Quantopian is the next choice since they provide valuable data sets for free on their platform and provide hosting, both of which would be side projects to implement by themselves.

This is not a comprehensive list but intended to a brief guide to get up and running in order to explore the topic.

Trading Indicators: Volume/Price, VWAP & MACD

I found lots of useful advice in CWT podcast #56 with Matt Zimberg (Optimus Futures); specifically, focusing on a select number of indicators for making trading decisions.

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

As a result, listed below are ones which I have been successfully using over the past several months:

Volume/Price: Candlestick plot on 60-min and 1-day intervals using the Street Smart charting tool

VWAP: Chart in its own plot within Street Smart, which displays well with the 60-min interval

MACD: Refraining from oscillators to keep things simple, I use just one (MACD) to monitor momentum

Python for Finance by Yves Hilpisch

Just wanted to check in with a book recommendation – Python for Finance by Yves Hilpisch, which covers programming for basic financial modeling and algorithmic trading.

Resources are listed below and kudos to O’Reilly and The Python Quants group (founded by Yves Hilpisch) for providing these great resources for those of us researching this topic!

Python for Finance by Yves Hilpisch – O’Reilly

Book Code Examples – Github

The Python Quants Group

Quantopian Algorithm & Research Idea Library

Found a forum post on Quantopian with an aggregate of recent strategies which I found interesting; specifically, the strategies (PEAD) focusing on time periods around earnings news since it is now earnings season.

Many of the strategies are based on academic papers, which are also worth a read for additional background on the topic. Again, kudos to Quantopian and all the great work they are doing to promote algorithmic trading!

Quantopian Lecture Series

One of the unique and awesome features of Quantopian has been their lecture series which focuses on teaching specific topics on quantitative finance for building algorithms on their platform.

The lectures are updated on a regular basis and developed in collaboration with top-tier universities so the curriculum is on par with classes being taught in academia.

I am working through the lectures and been enjoying them so please keep up the great work, Quantopian!