Discussion in 'Journals' started by JLB123, Feb 17, 2007.
200701 monthly return 7.7%
2007 year to date return 7.7%
200702 month to date return 3.69%
2007 year to date return 11.64%
Open position(s) : 2
Would have made 30c more on the SPY Feb 141 call if I wasn't being forced to liquidate the position at 1pm ET instead of sell at the mkt close, due to 'insufficient fund to exercise the option'.
2007-02 month to date return 5.67%
2007 year to date return 13.75%
vs. 2007 year to date SPY (S&P500) return 3.12%
Open position: 1
Indicator changed in the last minute, was not able to close all positions in time. The remaining of call options to be sold at open on 2/21/2007.
2007-02 month to date return 4.77%
2007 year to date return 12.79%
vs. 2007 year to date SPY (S&P500) return 3.08%
Open position: 0
Refer to yesterday's post, the remaining of call options were sold at open on 2/21/2007 @3.5 which should've been sold @3.8 the previous close. I guess I could've act a little faster to avoid such an Un-necessary loss.
Initiated long position with DIA March 125 call @2.65.
This would be far more interesting if you posted something about your methodology.
What are you looking for? - entries, exits, targets, stops, underlyings.
Do you just do long calls, etc?
No we don't want your secrets. Just enough to keep our interest and offer help and critiques.
Good trading to you.
Thank you for your suggestion Wayne.
The methodology is a combination of many customized indicators. But the core idea is finding the relationships between different investments so I guess it can be called a Multifactor relative value trading model.
I do look for entry and exit point with pre-defined rules. I don't set stop loss because I keep the % capital per transaction small. I have tested the model with various stop-loss triggers but % return vs. drawdowns are just not as good. Due to this reason I only buy call options for max leverage with limited risk.
I think there are other potentials with this model as well. eg. it can easily be turn into a long-short statistical arb strategy... but I must admit my favorite is still trading calls... Not only because it's a bit more exciting but nothing beats the feeling knowing odds is on your side in the long run before executing that trade.
Needless to say I have paid my tuition to the university of financial market before I actually sit down and figure out what is the trading method that really fits me. I have been working on this model for a few years and paper traded a year. Finally it was only until about 10 months ago that I started to trade with real money, as well as confident, again.
My fist impression is that you apply a systematic approach.
I agree with you that buying Calls is a good strategy if
- general markets continue to point up longterm (as they actually do)
- timing is correct (i.e. buying on dips etc.)
- volatility estimate is correct (VIX is extremly low favoring longs)
- duration of call is long enough to profit on up-movements
- strike price is calculated to have a good ratio between gains (leverage) an losses
- commissions can be further reduced!
Good luck in your trading!
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