Performance Explanation

[Guest]

I was just curious about the #'s you posted in Performance.

Could you briefly explain how return and ROI (based on max risk) are calculated? Using real data from 2012 would be appreciated!!

[Guest]

Thank you for the rapid response!

One final question, you mentioned that these results don't take into account commissions (as commissions vary from broker to broker).

What would the 2012 results be thus far if commissions were $1/contract, with no flat fee per trade. I could do the math myself, but I don't know how many legs are in all the trades, etc..

[Guest]

Assuming an average trade of ~3.00, you would trade about 3 contracts per 1k position. For straddle/strangles, that would be total of 12 contracts. For RIC, 24 contracts. We had about 65 straddles/strangles - that's total of 780 contracts, and 25 RICs - that's total of 600 contracts. So the total is ~1380 contracts per 1k trade. That's ~$1,380 in commissions.

With IB (0.70 per contract, or maybe 0.75 including their hidden fees) it would be about $1,035 or $11 per trade. So the commissions would reduce the gains by ~1.1% per trade.

Total gain would be reduced from 3,120 to 2,085 if trading 1k per trade and using IB.

[Guest]

I trade with IB and they told me last week that if the trade goes to the CBOE the extra fee per contract is .40. To be clear that is 2.80 for a one contract straddle.

[Guest]

This might be true for direct orders, not if you are using Smart. I rarely pay more than 0.70 per contract.

[Guest]

I only use SMART. Smart sends the order to the best price. I can't stop it from sending it anywhere.

[Guest]

Kim, is the "ROI based on max risk capital" also compounding? And do you happen to have the current model portfolio value and 2011 value net of the 75 cents per contract you are paying through IB? I got TOS to agree to give me a flat rate of 85 cents per contract which is pretty close to what youre paying.

Under what type of conditions is TOS willing to give .85 per contract? Given that I feel their software platform is better, and IB is not consistently $.70 a contract, this maybe a pretty good deal with TOS.