From $1000 to ? Trading SPX Weeklys in my Roth

Discussion in 'Journals' started by Trade Theory, Dec 31, 2019.

  1. dsch11

    dsch11

    Nice, keep it up! Would be interesting if you wanna share your thoughts about the trading and strategy you do.
     
    #21     Jan 10, 2020
    Zodiac4u and anycolour like this.
  2. Sure, here's my second trade and my thought process in taking it.

    Trade 2:
    002.PNG

    tIP BOT +1 BUTTERFLY SPX 100 (Weeklys) 17 JAN 20 3290/3305/3320 CALL @1.90 CBOE

    Its a 15 point bullish butterfly centered around the weekly expected move in the SPX. The market is pricing in a $38 move between now and expiration and I'm betting we will move close to that. SPX is trading at 3265 so I centered my fly at 3305. I'm betting on the efficiency in the options market in the SPX specifically on Friday expirations.

    tldr: Its a trend following trade betting implied volatility will be roughly equal to actual volatility.
     
    #22     Jan 12, 2020
    Adam777, .sigma, dsch11 and 4 others like this.
  3. anycolour

    anycolour

    Beautiful! You explain options extremely well! I've a hard time understanding others when discussing options, but your explanations I understand really clearly.

    I've heard about butterflies before - had no clue what they were, but now from your succinct example I know what a butterfly is! The screenshot helped a ton too.

    Thank you and would love to keep learning from your future trade breakdowns.
     
    #23     Jan 12, 2020
    .sigma, Zodiac4u and Trade Theory like this.
  4. Trade 2 closed:

    tIP SOLD -1 BUTTERFLY SPX 100 (Weeklys) 17 JAN 20 3290/3305/3320 CALL @5.10 CBOE
    002 Close.PNG

    +$320 Profit - $4.14 Commission

    Starting Balance: $1001.75
    Current Balance: $1643.47
    PnL: +$641.72 = Account up 64.06%


    Nailed another fly right on the head. And who ever said trading a 12 VIX can't be fun? With the market relentlessly pushing to all time highs week after week, I'm certainly not going to try to fade this trend. I'm going to continue to be a net buyer of premium and keep my risk defined, across all accounts. It would have been much more profitable had the SPX took 1 more day to make its move, but hey...I can't really complain when my accounts up 60% in 2 weeks.
     
    #24     Jan 16, 2020
    dsch11 and guru like this.
  5. ironchef

    ironchef

    You are not allow to do that in a Roth.
     
    #25     Jan 17, 2020
  6. traider

    traider

    When do you kill the trade if your bull thesis turns out to be wrong? Do you just let the whole structure expire and lose your initial premium
     
    #26     Jan 17, 2020
    anycolour likes this.
  7. I treat it as a very binary trade. It will either expire worthless or close profitably. Usually I'll set a GTC closing order set to trigger as soon as the SPX hits my short strike minus $5. I prefer to close it manually but I always do the GTC in case I'm not watching the market at the time it makes its move. The closing order for my second trade was triggered as soon as SPX hit $3300.
     
    #27     Jan 17, 2020
  8. We're on track to close this week significantly outside of where the implied vol was pricing us to go. That's the first time this has happened since August 2019. I'm not feeling good about placing the same trade on the SPX again this next week unless the market pulls back to around 3300 before today's close. I'll likely skip the trade and do some earnings plays this week on INTC, PG, AAL, ETFC and/or TXN instead.
     
    Last edited: Jan 17, 2020
    #28     Jan 17, 2020
    .sigma and dsch11 like this.
  9. anycolour

    anycolour

    Mind sharing more in-depth stats about your trading? E.g., how many option trades do you place a month. Out of those (are they all binary?), what percentage a month end hitting your short strike minus $5/or you manually exit in profit? How many are losers?
     
    #29     Jan 17, 2020
  10. Nah this journal is the only trade data I’ll be publicizing so I’m starting with a clean slate here. But what I will say is I’ve been trading options profitably for the past 3 years, with 2018 being most profitable, closely followed by 2019.
     
    #30     Jan 18, 2020
    dsch11 likes this.