The rules for the VTO trade are very simple whenever the Q's close with the 5 day RSI below 30 buy long and hold till the RSI closes above 50. This trade could be used with front month options as they are now priced in penny increments. The QQQQ is purchased during after hours trading on the day that the RSI buy signal is generated. It is sold during after hours trading on the day that the RSI sell signal is generated. I suspect that you could also buy the next morning without affecting long term results.
From 1997-2005 the strategy was up 349.7%. A “buy and hold” strategy for the Nasdaq 100 was up 76.2%. I'm guessng one could apply the rules to the SPY and DIA with similar results although I haven't actually tested either one of these.
2 months ago