Amen, brother. That may be why trading has grabbed me as hard as it has; I'm willing to go through hell and high water to get competent with it. I know there are storms ahead... all I can do is learn as much as I can ahead of time, and then give it all I've got when one comes. And whenever I survive one, it makes me that much more able to withstand the next one. Years ago, I bought a boat, got some minimal experience with it, and took the hell off for the Caribbean with a grand total of $250 to my name (plus the toolbox of skills that I had in my hands and my head.) I not only survived, I thrived... because I left myself no choice; it was "root, hog, or die." I've done much the same here; giving it all my time, all the effort I can put out, and all the skill I can bring to bear. My favorite way to live. Maybe I'm weird and crazy... but I've been at it for a long time, made a pretty damn good thing of it, and don't plan to die of boredom.
Did you see the film 'Coyote' about the solo U.S. racer Mike Plant? It's very intense film, highly recommended.
I've heard about it; never seen it. Thanks for the reminder, though - I'll add it to my media list (which has been growing like crazy over the past year.) Let me offer you my own recommendation in return, though. Despite having done some racing in the past, I'm far more of this type of sailor; my role models in sailing have always been more of the Joshua Slocum/Bernard Moitessier/Harry Pidgeon type of men. Yves Gelinas is cut from the same cloth, and this movie comes as close to conveying my feeling for sailing and the sea as any I've ever seen.
Hi, @ffs1001 - sure, that's what I just added. But you also have to keep in mind the overall trade structure: I started with a naked put (which went against me at jet speed), and I'm trying to handle the damage. One way to do that is by converting it to a strangle or a straddle... but I only have level 4 options permissions with TradeStation, which means I can't do naked calls. So, I spent $12 appeasing them (i.e., buying the long call.) To me, it's meaningless; part of what I pay to get what I want, which is that short call. What I end up with, if I'm just looking at the two shorts that I care about, is strangle or straddle that's inverted by one strike. Since my plan is now to own ROKU, all I'm doing is hacking away at reducing the basis... heck, you can think of it as selling a call on it before I own it, for that matter. The overall trade result is the important part.
@BlueWaterSailor, got it. You have a short 135P and a short 140C (and a long 195 C). I see ROKU has fallen again today, which is the complete opposite of what you needed. With the credit you have collected, your break-evens at expiry are 123.1 and 151.9, which is quite a wide range. You have 4 weeks left, so no need for drastic action yet (not that you were going to do so). And if these are cash secured puts, and you don't mind owning the stock, then as much as the situation hurts, it's part and parcel of premium selling. Although it's a negative right now, the high volatility in ROKU will come to your benefit if/when you own the stock, cos then you can sell covered calls against it to recoup the losses. I'm curious to see how this plays out.
Spot on. Thanks - that's good reinforcement for exactly how I'm looking at it. A very smart guy who is helping me out told me that I should look at it as if I already own it and am just trying to improve the basis; that's a really good perspective, and lets me build a good plan for what to do. As to ROKU falling - honestly, it doesn't bother me much; just a remote "darn, it would have been pretty cool to watch this come back" sort of a minor annoyance. I don't mean to be blase about money, but... it's less than $14k if it somehow magically goes to zero. I don't want to boast, but I've had weeks in the past when I've made that. I'm not so rich that I can just dismiss that amount with a laugh, and I sure don't want to blow out my account, but this isn't even close to any of those things at the absolute worst. But here is The Thing: when I made my first trade, barely five months ago, selling one single share literally kicked off terror in my brain, like nothing else has in... man, I don't know how long. Decades. I've been shot at (more than once), been stabbed in a fight, spent days battling storms, had the eye of a 145mph hurricane pass over me, jumped out of perfectly good airplanes, sat on the edge of a cliff dangling my feet over nothing but empty air, got into a bad "crab" while balls to the wall taking off in a crosswind... nope. There was something living in my head that totally lost its shit when I placed my first dollar at direct, obvious, visible, unmitigated risk. (Never mind that all of us do that every day of our lives. If you get on a bus to go to work, you're betting that dollar, and your time and effort, that you'll get paid for it. But nobody thinks about it that way.) That terror does not exist any longer. It's gone. I will admit that I got pretty nervous watching the ROKU P&L go to -$1k yesterday - that's the first time any of my trades went that deep in the red - but it was a "fuck, I wish wasn't this pig-ignorant!" frustration triggered off by seeing that number, and not about the number itself. Excising that hidden fear? If I'd known the son of a bitch was there, and couldn't get rid of it any other way, I'd have gladly paid a psychologist $14k and more to pry it out for me. Assuming they could. (You mean I've carried that bastard in there for 50-plus years??? Can you imagine how much it's cost me in all that time???) Trading has - if not killed it dead, then at least turned it into a mosquito-sized pipsqueak making amusing, cartoon-chipmunk noises in the background. And you know what? I got that for free, while doing some cool trading shit. Can't beat that with a stick.
Thanks for sharing this. You are talking your intuition regarding closing early vs. holding till expiration. Below was a bit of a bummer, no? " After 12.5 years of trades there were very little profits for the vertical put strategy. Meanwhile the brokerage is getting a decent paycheck through the commissions."
@qlai - forgive me if my take on you is wrong, but I don't see you asking this question in good faith. In all of your posts regarding options, you seem to have a belief - more than that, an article of faith - that holds options as a guaranteed losing proposition; this, despite your confessed utter lack of understanding of them. You don't seek to understand; instead, you appear to latch onto anything that looks like support for your confirmation bias and gleefully parade it as "proof" of your pre-determined position. My reaction to that kind of irrational behavior is a 99%+ inclination to just bow out; it holds zero interest for me. The tiny, sub-1% part is the thought of "well, he seems like a good guy... maybe worth a tiny bit of effort?" - and so I'll say this: any time you want to actually understand, I'll gladly share what I've learned, just as a number of people here have so generously shared their knowledge with me. That offer stays open. But as long as you want to keep praying to the god of "it's a scam/picking up pennies in front of a steam roller/nobody makes money in options", etc.... I learned a long time ago to stay out of religious arguments. Not something I'm willing to waste even a second of my life on. Your choice.
K, fair enough. Your point is well taken. I like your journal and your journey, so I will put myself on mute as not to distruct. Unlike you, I don't have any friends who are successful at selling premium(or buying). It's not that I'm set against it, but I am trying to understand not the mechanics of the approach but the big picture first. I'm trying to understand where the edge comes from, outside of mean reversion. I genuinely wish you success and it seems you are well on your way. I appreciate it, and hopefully will take you up on the offer.