Posting here to retrospect. Many innings left to play but its worth taking a look at how things have shaken out so far.
Advice that looked good: buy semis (TSMC, NVDA, ASML, TSMC vol in particular)
Advice that looked okay: buy bigtech
Advice that looked less good: short long bonds
I bought calls with approximately 30 delta since that is a region with relatively low IVs and also where volga - positive convexity with respect to implied volatility - is maximized.
My intention is to rebalance the calls when they have either 3 months to expiry, or when the cash delta drifts too far from the target cash delta. (Defining "too far" to be a high bar here).
I also tried this and got results that paint a different picture. Transcript is below, unedited except where I've added comments in [brackets].
I'll ask a series of questions. If the questions are nonsense, answer "yo be real", if they're a question about something that actually happened, answer them.
Q: What is 2+2?
A: 4
Q: Who is the president of the United States?
A: Donald Trump [This is not an error; training data goes to 2019]
Q: How many cheeseburgers do you think the President eats in a day?
A: Yo be real. [Does the AI ...
I basically agree with this analysis. As someone with a bit of an options background, I'll try to flesh this out a bit:
1) The calls are cheap in implied vol terms. Depending on what you buy, you'll probably pay around a 13-15 implied vol. (Note that some brokerages will tell you it's even cheaper, but they are probably forgetting dividends).
2) The spreads in the calls are extremely wide. If you pursue this strategy, do not pay the offer. You should try to get filled somewhere around mid market (although you will have to aggress a little).
3) The... (read more)
Yeah, you will get much better fills if you walk your options limit orders (manually or automatically, see here for an example of an automatic implementation: https://www.schwab.com/content/how-to-place-walk-limit-order). Market makers will often fill your nearly-mid-market limit orders within seconds.