Trading Options Using Volatility Predictions

First things first, I'm completely new to the world of options and I welcome constructive comments on any future posts regarding this topic. Having said that, I have a confession to make.

I've been working with an independent Wall Street option trader for the past few months building a volatility model for option trading. I can't go into details regarding this activity, as it's proprietary, but I can detail my journey into paper trading options.

OptionsXpress Portfolio 07/09/2007

Currently, we're both paper trading the predictions of weekly directional volatility for PowerShares QQQ Trust (QQQQ) and the S&P 500 INDEX (.INX). What the model tries to predict is the direction of next week's volatility and execute option strategies to capture those moves.

I'll be posting a snapshot of my current paper portfolio and P/L once a week as a way to keep track of how well the model is doing.

Show Comments