That's exceptional trading there. Have you visited the thinkorswim website? Do they have any tools that can help you in your analysis? as an example: I use a lot of range analysis in an attempt to determine whether a day is going to consolidate or generate range expansion ... and I try to stay out of the consolidation days ... then if I can just get the direction right, I'll be OK! You've got the concepts down pat, now if you can just skew your winning percentage ... Blamo! Best, Jimmy Jam P.S. The strategic element of good options trading has always fascinated me, this thead opens up an whole new arena of trading for me (on the intellectual side, if nothing else).
Nope, haven't check out that site yet, but it looks like they have limited futures options. And even then, only on the financial instruments. Personally, I still prefer the paper, pen & ruler techniques of analysis... 11-Jul-06 - COCOA vertical spread analysis Alright, here's the entry to the cocoa spread. I figured it had reached a peak based upon the penant-like channel and reversal of RS-14: Nice thing about spreads is I end up with limited losses (and gains) regardless of what happens to the underlying instrument: A. Cocoa ends up rising. I collect all $440 premium of short-put. Depending up on how quickly I can get out of the long-puts, I can end up with -50-110% loss. B. Cocoa stagnates between spread, in which case, I still keep all of short-put premiums. Depending upon where it ends up in between, I can sell off the long-put for about $1000 to $2000 for a +50-150% gain C. Cocoa drops below below short-spread can be the best scenario if I can close out the short-puts quickly enough.. Unfortunately in this case, it moved so darn fast, I couldn't get out until it was too late and took a -2000 loss on them. This severely cut into the +3300 win on the long-puts for only a +1290 (+134%) gain. The short-put limited my gains here. The small amount of insurance it provided resulted in a much larger limit on the gains. By getting greedy and collecting a larger $440 premium, I sacrificed thousands in gains. That's because the short-put has only a 100% win potential while losses are much, much larger. Better play in this case would've been to sell more OTM puts for lower premiums, say... $150-200 for Sep-1550s instead. In which case, it wouldn't have cut into the profits as much and given me an extra $1000 in profits for a 200% gain instead.
Heh, your analysis is incredible. Seeing as how you love the paper and pencil/strategic analysis approach. I don't guess you'd be interested in this baby? http://www.amazon.com/gp/product/04...355209/ref=sr_1_4/102-2056771-2465769?ie=UTF8 Best, Jimmy
Here's a list of trending markets I picked up from another thread. *** Trendiness Report starting Jan. 1996 ending Dec. 2005 at least 10 days in the trend 1. Mini Value Line 2. Nikkei Index 3. 90 Day T-Bill 4. Short Sterling 5. Japanese Yen 6. Palladium 7. Fed Funds 8. Australian Dollar 9. Goldman Sachs C.I. 10. Soybean Meal 11. British Pound 12. Platinum 13. CRB Futures 14. Euro 15. Pork Bellies 16. Swiss Franc 17. Dollar Index 18. Corn 19. Lumber 20. Eurodollars 21. Gold 22. NYSE Comp. 23. KC Wheat 24. Mexican Peso 25. Soybeans 26. Natural Gas 27. Cocoa 28. Feeder Cattle 29. Oats 30. Canadian Dollar 31. Orange Juice 32. Muni Bonds 33. Minn Wheat 34. Heating Oil #2 35. Copper 36. S&P 400 Midcap 37. Live Hogs 38. Rough Rice 39. T-notes 40. Unleaded Gas 41. Crude Oil 42. Russell 2000 43. Live Cattle 44. Soybean Oil 45. Cotton #2 46. Sugar #11 47. Silver 48. Wheat 49. Dax Index 50. Emini Nasdaq 51. T-bonds 52. S&P 500 53. German Bund 54. Coffee 55. Nasdaq 100 56. 5 YR T-Notes 57. Long Gilt Bond 58. FTSE 100 Index 59. Dow Jones Index 60. 10 YR T-Notes 61. Emini S&P 500 *** Seeing as how you're more than willing to venture into a number of the territories listed, perhaps it can help.
Thanks Jimmy, I'm currently going over "Trading Options on Futures" - Labuszewski & Nyhoff right now. I might make your pick the next reading assignment. Looks like you've given me a lot of options to examine! I really don't want to do this full-time you know!
Instead of trending markets, you may want to look at markets which actually have appreciable options volume. My first post (at the bottom of the page) has some good statistics on just that issue: http://foption.blogspot.com OJ's volume is about my lower limit on futures options. Beyond that, fills get pretty erratic.
31-jul-06 long Coffee call Feelin' bullish on coffee that day... 31-jul-06: BUY (1) Coffee Sep-100 call 862.50- 8-jul-06: SELL (1) Coffee Sep-100 call 2250.00+ 1387.50 (+160.87%)
Thanks, I'll have to explore that a little more. Trending markets have been good to me: DannosCMGIcalls.jpg. Playing the time/IV side of the options premium rather than the instrinsic value still scares the #$@! out of me! Made a play on coffee anyway... 9-Aug-06 set up credit-spread on Coffee with 2-days to go OPEN 08/09/06 SELL: (2) 110-call Sep-Coffee 975.00+ 08/09/06 BUY: (2) 120-call Sep-Coffee 150.00- 825.00+ total CLOSE 08/11/06 EXPR (2) 110-call Sep-Coffee 0.00 08/11/06 EXPR (2) 120-call Sep-Coffee 0.00 00.00- total RESULTS 825.00+ + 00.00- = 825.00+ TOTAL (+450%) This was the scariest thing I've every done as the $7500 risk between the spread was more my entire portfolio! Got a margin-call for about $2500 and ended up closing out some other position to cover it. While the higher percentage-return may look attractive, margin-requirements and risk will limit how much I can actually make in total dollars/month from this technique... I guess my risk-tolerance is pretty low, I hardly ever buy OTM options
Intermediate Milestone #1 date: 4-jul-06 --> 11-aug-06 (5-weeks) account: $3000.00 --> 6041.05 (+101%)