I hate this market condition. I've been waiting for market to move up sharply or go down so I can do something. It's been like this since Friday. I'm telling myself, be patience till tomorrow. In the meantime, my negative theta on the put side is killing me.
11/08/25 I was so happy to see OEX around 561 in the morning with Toll Brothers not so good news. However, XEO managed to climb back to 563. This is not good for me. I won't fight any more. My total Theta (40) was too high. I legged out the 550/560 call. I bought back 560 first for $13.5 and sold 550 later for $5.4. Total debit is $8.1 for this transaction. So, whatever profit I made on the put side, now I gave them all back with small lost ($0.15)+commissions. I also bought 570 call earlier for 75 cent. Now I have 550 put and 570 call. If some strong move happend, I can sell call or put against it. Total Theta is -23. -Nick
Nick, What was your reasoning for legging out of the call spread? Is this going to be part of your overall strategy (legging in/out) or was this a one-off situation trying to read the market? Just curious. Momoney.
Hi Nick..good for you in starting this journal..jumping in here did you chose the xeo for its relative size compared to spx? Have you traded it in the past? I guess I'm asking how familiar are you with the index and the underlying components? Or is this providing a learning curve? tia donna
I did not get good fill near the mid and decide to practice legging out. I set my mental limit to say that if it worst than mid price by 30 cent, I'll accept the situation. This time, I beat the mid price by about 30 cents. It's probably won't be my overall strategy. I have day job so I don't usually have time to do this.
I trade this for lurning curve and set my loss limit for $3000 which is a fee many option education seminar company charge. I consider $3000 as my tuituion fees. I chose XEO because it is about half size of SPX and electronically traded. Since I practice my trade near the money, SPX is just too much for me. Even with XEO, I still feel that if I trade badly for 2-3 months, I could loose $3000 easily. That would be the end for me. So, I might switch to XSP or SPY to last longer. However, I'll have to start a new journal.
11/14/05 The index seems to stall. I decide to close 575 call which was bought for 75 cent. I sold that at $1.65 to make $.90 profit. However, I'm probably going to loose on the put side which was paid for $2.70. Now my position has 550 Oct put.
11/04/05 I decide to practice +vega, +theta this Dec expiration month so here is the calendar spread. Open December position with calendar spread. I started with Nov/Dec 565 put spread. I started with OEX because it has weekly. BTO Dec 565 $5.2 STO Nov 565 $1.30 Total debit $3.90 If the index stay around 565 this Friday, my profit for DEC would be around $1.30 - slippage on 565 DEC b/a spread. For Nov expiration month, I'll loose money if the index move beyond 570.5.
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