Why OptionDōjō?

I built OptionDōjō because I needed it. I couldn't find any existing products with the features I was looking for. I required a trading system that was simple to use, could be used to execute a robust trading strategy with a daily effort on the order of 20 minutes, provided features to allow for simple construction and maintenance of a crash resistant portfolio, and provided a justifiable perceived edge for all trades. OptionDōjō is the result of that effort.

What is OptionDōjō?

OptionDōjō is primarily an options vertical spread trading platform providing the following critical functions:

  • Find instruments for which we can predict direction with edge (>50% accuracy)
  • Find favorable and actionable vertical options spreads to enhance directional edge
  • Track all positions and alert when either the options or directional edge has been lost
  • Track portfolio beta and assist in maintaining market neutrality regardless of prevailing volatility
  • Assist in choosing positions such that any large market move, up or down, will likely result in net profit
  • What OptionDōjō is Not

    OptionDōjō is not (yet) a complete trading system. It is only a very useful tool. As with any tool, results will vary with the skill and knowledge of the user. Among other things, a good trader should:

  • Maintain a basic level of market awareness
  • Reject recommended trades that don't make intuitive sense
  • Reject recommended trades where the expected move has already happened -- you may be too late
  • Exercise caution trading when the underlying has broken out up or down -- breakouts can be unpredictable
  • Reject those trades where you see chart patterns contrary to the prediction
  • Filter trades when you have knowledge that the system doesn't know about, such as:
    • Insider trading
    • Large material losses or gains that impact book value but are not yet reflected in currently reported book
    • Big breaking news, such as M&A activity, windfall profits, dividend changes, etc
  • Adjust portfolio beta according to market conditions
  • Maintain enough seperate positions so that the Law of Large Numbers works in your favor (10 or more is ideal)
  • Have a strategy, and execute it
  • When it is time to act, don't delay
  • Always be aware of your max risk. Be prepared both mentally and financially to absorb worst case scenario losses.
  • Use your intuition. If you don't understand the dynamics of an underlying asset or a particular trade do not engage.

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