At what Point does Execution count stop justifying the Edge?
u/ViewOfWineDarkSea ·
Reddit — r/algotrading
· July 28, 2026 at 17:41
· ⬆ 20 pts
· 💬 7 comments
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AI Summary
Summary
Post discusses a systematic options strategy (covered calls and CSPs) with strict filters (0.05 delta, 7-14 DTE, IV/VRP screens).
Author reports 1.9% return on capital over 250 trades in 3 months and questions whether execution costs offset the edge.
Asks for rule-of-thumb on edge-per-trade vs. round-trip costs and proper capital denominator (since the same capital supports both equity and margin).
Quality assessment: Well-reasoned, data-backed reflection from a practitioner; focused on strategy optimization rather than a specific market call.
Score20
Comments7
Upvote %95%
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As a disclosure, these are my genuine personal earnings within the past three months. I got \~250 trades and 1.9% return on capital.
I do systematic covered Calls and CSPs. .05 delta, 7-14 DTE, hard filters on iv, VRP ratio, liquidity, earnings blackouts. Additionally, rules based exits at 50% profit / 0.30 delta.
How do you decide when an edge justifies its execution count? Is there a rule-of-thumb for edge-per-trade vs. round-trip cost? And is return on capital even the correct denominator, when that capital is doing double duty (holding the equity and securing the position)?