SysCW: Fraud or Failsafe? (Part 2)

Last time I inched the spotlight away from CCs and CSPs and onto Rich MacDuff’s SysCW trading service. I will conclude this blog mini-series with some content from the SysCW on-line forum.

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I see two major hazards. First is the [black swan] market crash…

Second is the “trap,” where I have an Interim trade (maybe a Weekly option that is collecting “juicy” premium) and the market suddenly catapults higher. Now, that juicy weekly premium is irrelevant because I need to search months to years out in time to roll for a credit. In backtesting I have seen cases where no credit opportunity exists (like Vegas with its maximum bet on blackjack tables, all optionable stocks have a longest-duration option series available). My remaining options are:

–Roll for a debit and hope (hope is not a viable market strategy)
–Dollar cost average (cannot do this if I am fully invested, which Rich has most recently started to recommend)
–Accept assignment and realize the loss

In 2008 where everything tanked, all of my positions would be Interim trades. In 2009 when the V-bottom printed, I could be trapped on most or all of my positions and forced to lock in huge losses across the board.

That is my biggest concern with SysCW.

> Why not just start small with 10 positions and do ten buy writes and see how it
> works for you and then slowly graduate into more.

That is fair… 10 positions in an account that could handle 20, for example. While the Math Exercise looks for 15% annualized return, though, I would only be realizing 7.5% annualized overall. I will increase allocation over time but ultimately the question remains as to how much I can increase because Rich says I should be making 15% annualized on the whole account.

One way or another, the question about whether or not to be fully invested must be answered. If not then how much cash sits idle on the sidelines? In this case with the Math Exercise targeting 15% annualized on every position then the transparent reality is a system unable to deliver on its promises. Period.
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I will continue in the next post.