My (JT) Index Options Trades

Discussion in 'Journals' started by torntech.com, Aug 1, 2002.

  1. Today I baked Mocha Chocolate Chip Banana Muffins http://bread.allrecipes.com/AZ/MochChcltChipBnnMffins.asp. They turned out to be great. My trades did not.

    Code:
    Trade #.....	13	14	15	16	17	18
    Status…..	OPEN	OPEN	OPEN	closed	closed	OPEN
    Security	OXBTT	OXBTT	OXBTT	OXBTE	OXBTE	OXBTJ
    Index…..	OEX	OEX	OEX	OEX	OEX	OEX
    Call/Put	Put	Put	Put	Put	Put	Put
    Strike…..	400	400	400	425	425	450
    Date buy	6-Aug	7-Aug	7-Aug	8-Aug	8-Aug	8-Aug
    Time buy	10:34	15:14	16:04	12:33	12:33	14:46
    Price buy	3.10	2.40	1.85	3.80	3.80	9.10
    Quantity	1	1	1	1	1	1
    Date sell				8-Aug	8-Aug	
    Time sell				12:49	13:34	
    Price sell				4.00	3.20	
    P/L……………				18	-62	
    P/L %......				5%	-16%	
    
    AAAintheBeltway: I have tried a lot of TA in the past. I have many times pulled my hair in despair about a system i thought would work find, but actually did not. Now I only trade using chartpatterns and support/resistance. Actually I have found that the easier the "system" the more reliable outcome. I mainly do swingtrades and holding overnight.

    Only long positions (puts&calls). I've tried to go short a number of times in the past, but does not feel comfortable doing so. I do swing trading, so time decay could be worse.

    Speaking of support & resistance. My charts tell me that both QQQ and OEX should head down tomorrow. Still waiting for the bear to show up...

    /JT
     
    #11     Aug 8, 2002
  2. torntech,

    I tend to use credit spreads on directional plays, ie if I'm bullish then I sell an atm or ITM put and buy an OTM. I try to cover the short leg after a day or two, if it goes my way. Depending on how expensive the long leg was, I may cover or let it ride.
     
    #12     Aug 9, 2002
  3. OK, here are today's trades:
    Code:
    Trade #.....	13	14	15			18	19	20	21	22	23
    Status……	closed	closed	closed			closed	closed	closed	closed	OPEN	OPEN
    Security	OXBTT	OXBTT	OXBTT			OXBTJ	OXBTT	OXBTJ	OXBHN	OXBTT	OXBTJ
    Index…..	OEX	OEX	OEX			OEX	OEX	OEX	OEX	OEX	OEX
    Call/Put	Put	Put	Put			Put	Put	Put	Call	Put	Put
    Strike…..	400	400	400			450	400	450	470	400	450
    Date buy	6-Aug	7-Aug	7-Aug			8-Aug	9-Aug	9-Aug	9-Aug	9-Aug	9-Aug
    Time buy	10:34	15:14	16:04			14:46	8:31	11:22	11:28	13:13	15:49
    Price buy	3.10	2.40	1.85			9.10	0.70	7.20	4.70	0.70	6.60
    Quantity	1	1	1			1	2	1	1	1	1
    Date sell	9-Aug	9-Aug	9-Aug			9-Aug	9-Aug	9-Aug	9-Aug		
    Time sell	11:37	11:37	11:37			11:15	11:37	11:27	12:08		
    Price sell	0.40	0.40	0.40			7.40	0.40	6.30	4.30		
    P/L……………	-272	-202	-147			-172	-64	-92	-42		
    P/L %.....	-87%	-84%	-79%			-19%	-45%	-13%	-9%		
    
    Quite frankly I don't have enough energy right now to comment. Will spend week-end to try to figure out what went wrong. 58% of trading cap gone in less than 10 days:

    Code:
    Date……………	IB ($)…	Diff $	Diff D%	Diff TOTAL %
    				
    01-Aug-02	1 937			
    02-Aug-02	1 616	-320	-16.5%	-16.5%
    03-Aug-02	1 616	0	0.0%	-16.5%
    04-Aug-02	1 616	0	0.0%	-16.5%
    05-Aug-02	1 269	-347	-21.5%	-34.5%
    06-Aug-02	1 961	692	54.5%	1.3%
    07-Aug-02	1 724	-237	-12.1%	-11.0%
    08-Aug-02	1 201	-523	-30.3%	-38.0%
    09-Aug-02	811	-390	-32.5%	-58.1%
    
    Attached is all OEX trades so far.

    AAAintheBeltway: Thank's for your post.

    /JT
     
    #13     Aug 9, 2002
  4. H2O

    H2O

    To give an impression of my current (Long Term) positions

    LONG

    19 QQQ dec02 25
    20 DIA dec02 96
    20 MDY dec02 90

    I think we have another positive week to come and depending on how things work out I'll perhaps close some of them.

    Success
     
    #14     Aug 9, 2002
  5. torntech,

    I noticed that almost every one of your trades was against the trend, as measured by the 60 minute chart. I can tell you from experience that fading the trend or trying to pick reversals using long calls or puts is a tough way to make money.
     
    #15     Aug 9, 2002
  6. One might think - gee I wonder what this dude is doin?

    My thinking friday:
    - Absolutely sure the OEX would end down. OEX also started heading down, at which point I said to myself to hold on and let the profits run. During the later recovery I kept telling myself that it was only a temporary setback.

    - After a while I came more confused. Now when the resistance is crossed, I should be buying - right??? Or maybe it's (OEX) only testing the resistance level and I should be selling??? Well I jumped back and forth 3 times at different contracts, and lost $198 doing so.

    - Got really emotional.

    - Bought and sold at best offer (I will loose $ if I wait).

    - Rush to make up for the $ I lost.


    Temporary trading plan for next week:
    - Go into tiny mode. Max 1 contract @ max 1$

    - Max 2 trades/day

    - At least 3 wins in a row before any change in this temporary plan

    - No panic buys. Always place buy limit lower than originally thought of. Price will always drop somewhat, extremely rare that I would buy at daily low.

    - Stick with support/resistance system. Don't place order unless there is a signal from system

    Rob
    Thanks for sharing. I agree with your long term positions. The charts looks good for a recovery (bump-and-run reversal bottom). I'm into options cause I like the volatility and large swings. That's why I buy options close to expiration.

    You mention that you might consider closing some of you current holdings. What's you average holding time for you long term positions? Do you do any short term options trading?

    What's your take on the MDY? Volumes seems to be kind of low.

    In your opinion is it possible to make a living being an options buyer?

    AAA
    I guess my "trading idea/system" is based on trying to pick reversals. Obviously not that successfully. Perhaps I should wait for the reversal to confirm through a trend?

    Haven't tried any spreads as of yet. I don't like the math in options, and prefer to be on only one side of the market. However one should always be prepared to reconsider to survive...

    I have thought about using fixed stops, but kind of difficult with the large spreads and swings. I would like to be stopped out during a temporary setback. Any ideas?

    In your opinion is it possible to make a living being an options buyer?

    Hey - It's only money....
     
    #16     Aug 10, 2002
  7. S/M = sadomasochism?
     
    #17     Aug 10, 2002
  8. H2O

    H2O

    First,

    I'm not an option trader. I'm a short time trader (somewhere in between scalping and very short time swing trading)

    I bought this options because I somehow have a good feeling about a recovery but I don't want my short time (stock)-trades mixed up with a longer time frame.

    Buying price

    10 QQQ call dec02 25 @ 2.65
    8 QQQ call dec02 25 @ 1.75
    1 QQQ call dec02 25 @ 1.55

    Avg 19 QQQ call dec02 25 @ 2.25


    10 DIA call dec02 96 @ 3.00
    10 DIA call dec02 96 @ 1.55

    Avg 20 DIA call dec02 96 @ 2.30


    10 MDY call dec02 90 @ 3.10
    10 MDY call dec02 90 @ 0.90

    Avg 20 DIA call dec02 90 @ 2.00

    Total investment $ 12.875,-
    Current Value $ 11.475,-


    I started this positions a little to early (when looking back) so averaged them down (Usually not good but it's that feeling...)

    I think when you look at the investment and the current value you agree I will sell part (50 - 75%) of them once they make a gain. My initial position was only half of my current position.

    One other thing I might consider is turning it into spreads by selling higher strike price calls.Still working on this.

    Why MDY ??
    Since the MDY is very defensive and you can see the swings in option prices. (great volatility due to low volume)

    Keep you informed
     
    #18     Aug 10, 2002
  9. Yea....and I'm starting to feel the pain.
     
    #19     Aug 10, 2002
  10. nkhoi

    nkhoi

    #20     Aug 10, 2002