[ConservativeOptionStrategies] Dr. Joe's DLS - Paper trade

 

Good Morning Dr. Joe,

I was chatting with a fellow trader regarding your post of DIA-DLS. I am trying to execute a paper trade to get more familiar with the strategy you formulated. I would like to use one of the other surrogate that you mentioned - IWM.

If I have followed your strategy correctly, I have the following:

Today's date: Feb 17, 2010
IWM Last trade: $62.05 (Feb 16, 2010)

IWM-DLS.

Using the 7/10 SC/LC ratio. We now have the following.

Buy 10 Jan12 40 IWM C @ $21.93 Delta .9311 - Total $21,930.00
Sell 7 Mar10 63 IWM C @ $1.15 - Total $805.00

805/21,930 = 3.6%

Would this be a viable paper trade?

Would it be prudent to use say a 10-20-30 rule?

Thank you for your consideration in answering the above.

Regards,
David Lim

Jack, I must have read Dr. Joe's Yahoo Post #832 a dozen times to learn, still need some help I am afraid.

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