Hi everyone,
Thank you for sharing your observations and feedback.
I’d like to conclude this discussion with a few important points that may help everyone evaluate Option Buying strategies more objectively.
Firstly, all LIVE Algos on Stratzy are continuously monitored by our team. However, monitoring an Algo does not mean modifying its strategy whenever it goes through a difficult phase. Frequent optimisation based on recent market conditions can lead to curve-fitting, where a strategy performs well on recent data but loses its robustness over time. Our objective is to ensure that an Algo continues to function exactly as it was designed, rather than constantly changing it based on short-term outcomes.
SkewHunter is categorised as a Very High Risk Option Buying Algo. Strategies of this nature can experience extended drawdown phases before favourable market conditions return. While we continuously monitor the Algo, neither recovery nor future returns can ever be assured, as market behaviour is inherently uncertain.
One important point I’d like to highlight is that a losing streak, by itself, does not indicate that there is something wrong with an Algo. Every trading strategy goes through periods where market conditions are favourable and periods where they are not. The true evaluation of a strategy should always be based on its behaviour over multiple market cycles rather than a recent winning or losing phase.
This is also why we publish detailed historical statistics such as Maximum Drawdown, Average Drawdowns, Average Winning and Losing Trades, Average Recovery Time, Trade History (trade-by-trade details of the signals executed by the Algo) and several other risk metrics. These are intended to help users understand the historical behaviour of an Algo before deployment, so that they can decide whether its risk profile aligns with their own comfort level.
If a historical drawdown itself feels uncomfortable, it is perfectly reasonable to skip that Algo and choose one that better matches your risk appetite. Not every strategy is suitable for every investor.
For the same reason, we consistently recommend building a portfolio of uncorrelated Algos instead of allocating all capital to a single strategy. Option Buying strategies can act as one component of a diversified portfolio, but deploying them in isolation naturally exposes the portfolio to higher volatility and deeper drawdowns.
I’ve also written a detailed post explaining when Option Buying Algos are generally suitable and how they can be incorporated into a portfolio. I request everyone to refer to it once:
Thank you once again for sharing your feedback and contributing to the discussion.