 Hey everybody, my name is Brian. So I'm a software developer and I recently got into options trading and This first little bit is just a simple disclaimer. Well, two of them actually I was recently hospitalized So I'm still recovering so I'm gonna try and keep this video short and all in one take So forgive me if it's a little rough and not edited. I just want to get this out there Second options traders don't know development. So parts of this video will not make sense to you because I am a developer talking about development Although they are some things we're going to talk about options related And if you're a developer, you may not know options. So you may be going what is all this nonsense because it just looks like gibberish It's like the day you first started writing code. Everything just looked like ancient Egyptian algebra So what are we talking about here? Well, we are predicting SPX and what do I mean by predicting? I mean within $20 to laser pointer accuracy where this is going to close Well in the past meaning around noon I want to know where this thing is going to close and if you're an options trader, you know that that is a massive massive advantage Because if you know where that's going to close or even within a certain degree of accuracy, you can make a lot of money very quickly I am not some financial wizard. I'm not a huge guru I'm just a developer that's trying to understand this so SPX if you don't know is Constructed or it's a calculated index. It doesn't actually exist. You can't go to the store and say I'd like one SPX Please it doesn't work that way. It's actually calculated off the S&P 500 Now me being a developer goes well because it's calculated. It can be reverse engineered That's actually something I went in a previous career Specialized in is writing software and reverse engineering software using of course math Ah math Everybody hates math. Anyways, so I've built something I call magic eight ball. It's a silly name It really reminded me of one of these little toys as a kid where you shake it up and ask a question And then it would say something like you know magic eight balls says maybe you're all signs pointy. Yes, you know Something like that It for the first models were literally that hit and miss but the newest models are really refined So let's just enough jabbing let's dial in Let's take a look at this Okay, if you're like me, you're immediately going I call BS on this This is complete rubbish and you're trying to sell me something honestly. I thought I was just on too much medication when I started down This road here's a quick log. This is from Friday and we're gonna go over the chart and the code and all that stuff But this is from 2020 to 85 literally last Friday So pay attention especially to this column G difference We take the closing price and the prediction and we get the difference of those two So at 9 30 in the morning, we're talking market open. I am $24 off via the code and As it goes you'll see it gets a little crazy and then it starts calming down and at one point I'm only $4 off and then $12 off and then six and by end of day. I am $13 off That's right It just within $10 actually within $20 for scroll up here Wow pretty much the whole day. Okay. So the first time we're over $20 off is actually 10 39 Eastern Standard Time That's kind of nuts. So I thought that maybe this was just some weird math glitch or something I'm not saying I'm some super oracle wizard that can calculate everything. I'm just saying this is something I've stumbled upon and I'm exploring it. So here's a simple chart You have calls and puts with the price of the middle and then this green line is the prediction So the yellows the price greens the prediction and you can see how they kind of are spread apart And then as the day goes on a wham they snap together and right around 10 30 noon ish somewhere in there Eastern Standard Time the prediction model just shows a straight line mostly and it knows Wham right where it's gonna go This is what I'm talking about now if you're an options trader Your mind probably just went what cuz as a developer my mind just went what? alright, so What kind of trades can you do with these well a lot? So let's just flip into some of these trades here So some of the trades that we can do using options strats We can do like a vert obviously right and that this is solely for developers that may not understand this So here's like the price and if we think it's going this way We can make money and we think it's going that way we can lose money So it's kind of like an a light switch on off you win you lose. It's pretty simple to understand But because you know where that's gonna go you can say hey if it's gonna be here Actually, if we think the closing price is gonna be here. We can make this and end up with some money Additionally if you're not good at just saying you know coin toss accuracy picking a direction You can do it's called an iron condor which you think the price is going to land in some range this is Code that I'm talking about is beautiful for this because you can actually see as it ranges around whether or not your condor is gonna Stay relevant and it's actually helped me hit the eject button on a few condors when the market got crazy all of a sudden And of course it can do a broken butterfly, which is really brilliant. I just recently learned this I'll talk about the group that taught me this Just love this trade. It's absolutely amazing for this strategy here All right, so let's let's pull up thinkorswim So this is Friday that log that I showed you we have different analyzers, right? And these analyzers just look at the market. They look at like all of the Greeks like you know Delta theta gamma so on and they look at volume They look at price profile price history and so on and they try to make these predictions So here's the actual chart from Friday. Who do do do do and this is typical stock market, right? This is why options traders typically are like stressing and they don't like being in a trade very long because the more time You're in a trade the more risk you're assuming. I mean it just I mean look at this. I actually traded this with a vertical I entered a very here Saying it would be above this spot And of course the market said denied and it went down But using the magic eight ball system I was actually able to wait and wait and wait and then it came back up here and then I closed the trade It did dip back down in touch, but then of course went up here This kind of goes back to the you know following that prediction line where we think this is gonna go All right, so different analyzers and actually two of these are right on top of each other Let's kind of just separate them So we've got you know raw volume We got a Delta analyzer where we're looking at the Delta strikes of the options chain Gamma or you know gechs basically Gamma exposure and then we're using the magic eight ball and you can see some of them are not Super accurate like volume was way off Gamma was a bit off, but like node analyzer 4142 to 4145. I mean look at this. It's boom This right here magic eight ball is the what you saw in the actual log this guy There's a reason I don't have all these other logs I literally just wrote them and I'm in the process of upgrading the reporting engine so if you have this kind of information around say noon all of these option trades just become New be simple. I mean I can do them I can rail out condors all day long and it's kind of blow in my mind because I suck at options trading so How do we get here? How did we get to this point? Let's take a look at that So the first few models were actually in spreadsheets and they were not accurate all because let's just face it spreadsheets suck Let me bring up Visual Studio here. So this is visual studio code. If you're an options trader, you're like, what is this thing? For your developer you feel right at home. So this is visual studio code. It's a code IDE or integrated development environment This is what developers look at all day long and this is where I love being so I've got just a simple python application here And this is very rough in prototype stage and here's the volumizer package that I'm working on here And you can see I've got some actions analyzers core thinkorswim. This is what I'm using is the thinkorswim API and Utilities so if we just kind of like crack open one of these so the core of the system really is We're using thinkorswim to pull the options chain down and we can actually like pull this file open here I'm not giving away any secrets and then we're doing a lot of math and I mean a lot of math and Especially doing like volume profiling and going through and figuring out how this thing works to generate a prediction Now if you understand computers, you know that you can make more than one prediction Meaning you can't just say hey, this is the one and only prediction You can actually make hundreds of these things and that's what I'm working on actually is because I wasn't happy with just one because you See it's off where you can make others So what I'm really focused on now is upgrading all of this and Getting these analyzers in here they are To actually work Together to figure out where that price is going to be because each one is inspecting a different part of the market here So like the Delta analyzer looks at Delta the gamma analyzer here looks at Gex and so on and so on And then you've got the magic anal magic eight ball analyzer I'm gonna make Dozens if not hundreds of these but I want to kind of combine them all into one analyzer to rule them all That will tell me pinpoint accuracy every single day where that market's going Now is this even possible? I don't know. I just know that SPX is a calculated index and because it's a calculated index you can reverse those calculations back to their Building blocks and figure out what's going on in under the hood Again, this may just be a fluke but as a developer. I don't like dealing with flukes I don't like dealing with you know numbers that are slightly off I like things being laser pointer hacker and there have been days where it has been literally right on that line So how do you find out more information? Well, I've been a part of some groups here and I'm gonna go over those real quick So, how do you find more information? That's a great question I'm sure I'm gonna get a lot of questions first is probably gonna be can I have the source code? No I'm I actually thought about open sourcing this and a friend of mine talked me off that ledge and said if you do that Somebody's gonna turn around sell it copyrighted and you will lose your code So I'm gonna keep it close to myself I may invite other developers to help develop this in the future watch my YouTube channel This is where I post all my programming nerd stuff here That being said If you're developing you're wanting to know more I will most definitely in the future try to post videos about it in my YouTube channel If you're an options trader There's Ernie's zero DTE group he specializes in a very specific style of trading he specializes in Butterflies specifically end of day butterflies that are super super narrow. Let's see if I can get this thing to work There we go So he likes doing these super super narrow butterflies and called pinning the trade and sometimes he's accurate sometimes he's not I'm not gonna discount Ernie. He's a great guy. I've talked to him a few times I used to actually join I used to actually be a member of his group and his groups great, but they do focus Specifically on just this kind of thing right here. He has this whole I won't give away his secrets This whole asymmetric risk principle, which is actually pretty brilliant It just really isn't aligned with what I wanted to learn I wanted to learn Everything cuz let's face it. There's a lot to options trading and me being who I am needs to know the details of all these little things But sometimes, you know, I'll go into Ernie's live stream And I'll you'll actually see me in the comments a magic eight ball says, you know, whatever the price is and It's just fun kind of competing with Ernie because sometimes he's better than I am sometimes my program's better than he is and you know Mad respect this guy's a professional trader and I'm just some guy with a keyboard There's also Axe options, let me pull up their page here. This is the group. I've joined now. You probably know her on YouTube is Arian these are Super nice people. I actually kind of consider this my second home. I have their discord channel up 24 7 But if you're interested, this is where I'm actually at axe options You just search it axe options and you go to about and then join and They're bringing to this page and yes, it's gonna say credit card number because sorry folks. This is not free This is a paid service of professional traders that help each other out And that's exactly why I joined to this group Because I want to know all of these things and I want to understand them and the folks in that group are awesome Here's the actually the group. I'm not going to drill into the group because I don't want to give away their secrets But it you can see right off the bat. It's a very welcoming Welcome to welcome. I mean how more welcoming can you get? That's just awesome But we have a channel in here where we actually talk this stuff and I'm putting magic eight ball predictions Where is it? I'm putting these predictions in there. I try to do it hourly So if you're an options trader, that's where I'm putting the prediction is in the axe options group and There's a specific channel in there that I'm just once an hour dumping these predictions to and then I do an end of day report It's actually literally this report And we talk about this all day long and there are folks that are like man That was close or hey, it could have been better if and you know, this is why I'm in there as a developer a lot of those Folks know options, but not development and they're giving me ideas information and feedback that I'm then converting into code And through trial and error trying to get this thing to work Whoo, that's a lot of information and I'm still recovering so I hope everybody's doing well, and I hope to see you soon Again, I may do some more videos on this. I don't plan on open sourcing this I don't plan on emailing the source code or showing anyone the source code to prove this I'm just gonna keep working on this and at some point I may actually develop a web front end Or a mobile app Or I may even you know start allowing this thing to shoot information to other discord channels, you know like just Hook into a special I think it's called a web hook Where magic eight ball could just send the predictions to a certain discord channel So that's it um questions comments below. I'll try to get to them. I'm just I'm still recovering Uh, I just thought this was interesting and I was wondering if there was anybody else out there who's also doing options trading and development Talk to you later. Bye