The trade I want vs the trade I can get...

Today I placed a trade with Optioneer and it was filled. My fill / not filled ratio is pretty poor overall but I think I have it figured out.

When I did the back testing I was not particular with which trades I took but I also did not account for not getting trades filled. This is what has led me to my credit method of determining the trades. I still aim for only the trades that I want but I have an attainable target once the trades come into the shorter time frames. So I just don't want the high dollar long term trades as they are not the same return as a smaller short term trade. I will see how much cash I can keep in place using this method, it does make the turn around tight once the trades complete though.

For today I had bumped the call side protection up by 5 points creating more profit in the trade by lowering my costs and also allowing me to provide greater leniency to the broker. Essentially I ended up with more additional than I had to give up in potential leniency with the standard trade.

Leave it to me to start off without using the typical setup.

The numbers were:

The standard trade = 1.9 points (1.9 x $250 - $78 commission = $397)
Minimum target for this trade for me is 1.65 points or $334.50 given the 32 days to expiry
My adjustment = + 0.15 points (0.15 x $250 = $37.50)
Total target = $434.50 or 2.05 points
The original trade would have been for 1.9 points with 0.25 leniency so the new trade is 2.05 with 0.4 points leniency...lots of room.

Filled at 1.85 or $384.50.

Using my credit setup this trade is a 1.2 credit where my goal is 1.0. Between the two trades I am at 2.44, so I am ahead by 22% if all goes as planned.

The best part, I did all this and sent in the trade on Saturday.

Jeff.