That's his mantra: Buy... Hold... Roll... with no Stop. IMO, there's nothing wrong with that strategy, but he can't seem to shake the habit of buying at/near tops. Again, IMO, if he's going to do that, he should wait for a sell-off, and buy at/near where his chart reading indicates a possible bottom, like just before the close this past Friday.
I'm not an options guy, just trying to wrap my head around this. He is Long the June MES at 4665. If his target was 200 points, and if I understand your example, he would also be short the MES 4865 EOM Calls w/June expiry. Maybe I'm missing it, but where is his downside protection with that strategy, which, I think, is what he would be most interested in? If he was willing to self-insure a 50 point drop, but wanted downside protection for anything greater, seems it would have been better to just buy MES 4615 QTY Puts w/June expiry. Not sure what they would have cost back then, but IV would have been low(er), so maybe $75 or so per contract? Right now, he is down 255 points. Since (I think) quarterly options are American, near EOD Friday, he could have exercised his Puts which would close his MES position with a 50 point loss per contract, and then reenter Long MES at/near 4410. Am I even close on any of that? lol
He SOLD calls. He received premium (ie income) for the sale. The income offsets the cost basis of the futures position. There is no protection (in that scenario) beyond the income received.
The other poster said it. It's just getting paid a little more while waiting. If you want downside protection then you buy a put with the proceeds of the call, which is a collar I think.
No trades. Just another "good grief" week. I may have to actually start day trading again, because these positions are going nowhere as we are locked in a broad range way below entry.
Continuing from trade #34... Wow. Just wow. One whole trade for peanuts. But I have always had this problem in extreme ranging periods. I just cannot see proper entries and exits. The sim trading went well enough, but could not engage in much live trading because of the open positions and that risk exposure. Should have seen the open positions on Thursday morning pre-market. It was UGLY. And I know it is not over. so cannot enter long as I sense this is just a dead-cat. I mean, who would have thought of this 2-day rally yesterday morning? I've never traded through a European war before, so do not know what to expect. Plus the unknown of the Ukraine capital possibly falling plus upcoming 2-day Powell speak and NFP next week? Yikes! Ain't out of the woods yet, so DISCIPLINE! Sit on hands, and follow the plan!
I was thinking about your positions this week. I was curious if you might try an add when we got creamed, and then take one off on a rally.
Nope, no adds. We are too close to March expiry, so any adds would have to be done on Sep contract, which would be dangerous on it's nil volume. Too much uncertainty around the March contract expiration which is right around rate-hike time.
Haven't been updating, because it's just been a churn fest for 3 weeks. Hell, the shit was down for ~23K at one point over this period, but it's getting better (?). Yeah, it's getting better all right. Follow the plan while getting gut-punched. Some plan. And we had another performance bond increase starting tonight on the equity indices, so that leaves less wiggle room. Need this war to end.