Progress Report 42 Bearish Wolf What has been keeping me busy today: University mostly. Preparing for an exam on Wednesday. Writing a new blogspot on strategies for mental maths. (See it here, draft version) How has the portfolio done today: Continuing Trades (Open Before Today): SHOP Nov20’20 800 CALL (long). Daily P&L +1.33% Total P&L: +52.81% UVXY Jun26’20 36 CALL (short) @ 2.53 P&L not available, no money invested (short) UVXY Jun26’20 35 PUT (short) @ 2.59 P&L not available, no money invested (short) Opened today: None Closed Today: AAPL Jul10’20 367.5 CALL @ 5.81 Daily P&L +91.67% Total P&L +91.67% SHOP Jun26’20 35 PUT @ 1.8 Daily P&L: -38.89% Total P&L: -38.89% Observations DOTM calls can be heaven and hell. You need to be really right with them: (1) Timing (2) Direction (3) Volatility. The leverage that you can get is massive and powerful in both directions: it can make you or break you. If you look at two of my trades that were closed today, you can see how. AAPL DOTM gained more than 100% at some point, and SHOP DOTM lost -39%. Both underlyings, however, gained value today. The difference resides mainly on the maturity date of each of them AAPL was far out in the future, SHOP was 4 days from now. Time decay killed the second bird, and it was irrelevant for the first one. Trailing STOP losses are heaven. I managed to protect that 92% return from being lost, as it was automized to sell at a trailing 15%. Maybe 15% was a bit too tight, given that the volatility of that option is immense, but I’ll take +92% in one day. I am very aware, though, that this was an incredibly risky bet. Likewise I could have lost 80% of the position. I need to find a way to gauge my performance on the short trades. I think it will be money at risk, based on possible max based on a 20 year horizon. It is not as simple as that though, because that assumes a much higher frequency of black swans than reality. Food for thought.
Progress Report 44 Bearish Wolf What has been keeping me busy today: University mostly. Prepared and wrote an exam today. Crushed it. Mental Mathematics. Stopped learning strategies, now applying them. Progress curve in regards to time per exercise is going incredibly quick. (As expected). How has the portfolio done today: Continuing Trades (Open Before Today): UVXY Jun26’20 36 CALL (short) @ 2.53 P&L not available, no money invested (short) UVXY Jun26’20 35 PUT (short) @ 2.59 P&L not available, no money invested (short) Opened today: None Closed Today: SHOP Nov20’20 800 CALL (long). Daily P&L -12.04% Total P&L: +40.77% Observations I was stopped out of SHOP since my trailing STOP order was triggered. However, this was not the correct thing to do. I needed to have a trailing STOP in regards to changes of the underlying price, not the price of the option itself. The value of the option changes due to a lot of things, so I need to take this into account. For example, volatility spiking today was a big factor. That made the trailing STOP kick in at a later than it should have, eating into some of my profits. BUt well, improvements for the next trade.
Progress Report 45 What has been keeping me busy today: Creating a new cover image for LinkedIn. I kind of like it. By the way, I did not design all of it, I just stitched together some icons I found online. How has the portfolio done today: Continuing Trades (Open Before Today): UVXY Jun26’20 36 CALL (short) @ 2.53 P&L not available, no money invested (short) UVXY Jun26’20 35 PUT (short) @ 2.59 P&L not available, no money invested (short) Opened today: TQQQ Covered Call. 100 Shares TQQ @ 95.2 (long) 100 TQQ JUL27’20 95 CALL @ 7.98 (short) SPXL Aug21’20 40 CALL (Naked Short) @ 5.58 Closed Today: None Observations Flow Traders had 1.000 applicants for their graduate position. Cool. Those are good chances. Full Spread LinkedIn Cover 1 LinkedIn Cover 2
Progress Report 46 Bearish Wolf Progress Report What has been keeping me busy today: Taking the day off. First real day off in almost two months. How has the portfolio done today: Continuing Trades (Open Before Today): TQQQ Covered Call. 100 Shares TQQ @ 95.2 (long) 100 TQQ JUL27’20 95 CALL @ 7.98 (short) P&L not available SPXL Aug21’20 40 CALL (Naked Short) @ 5.58 P&L not available Opened today: Closed Today: UVXY Jun26’20 36 CALL (short) @ 2.53 P&L not available, no money invested (short) UVXY Jun26’20 35 PUT (short) @ 2.59 P&L not available, no money invested (short) Observations None.
Progress Report 48 What has been keeping me busy today: Making a list of proprietary trading firms in the Netherlands. Set up of couple in regard to my operations that allow me to move leaner and faster. Now I am fully loaded (again) for the new challenges that I am looking up to. New paper trading account made in IBKR. No P&L available. Markets closed (weekend). Observations There is enough proprietary trading firms in the NL to choose from, luckily. Around 20 companies to which I could reach out. There could be more, though, this was just my first step. I am putting a pause to programming. For now, it is unnecessary to try to code any type of algorithm. The automation advantage of programming a trade (or any type of auxiliary action) is not big enough yet. I can produce a lot more value by spending that time behind the screen, reading the markets than by programming. I am looking forward, though, to the moment when it actually makes sense. The new paper trading account in IBKR reflects better the amount of capital that I can realistically deploy in the markets. With this, I will be able to test how my portfolio would do in the markets, rather than testing specific positions, as I had been doing before. However, I am still keeping the old paper trading account open (with around €1.000.000 in purchasing power) to just play around and see what sticks.
Progress Report 49 What has been keeping me busy today: University. Exam coming up next week (the last one before summer!). Learning about small trader regulation. How has the portfolio done today: Continuing Trades (Open Before Today): TQQQ Covered Call. 100 Shares TQQ @ 95.2 (long) P&L +1.25% 100 TQQ JUL27’20 95 CALL @ 7.98 (short) Raw P&L: $30 SPXL Aug21’20 40 CALL (Naked Short) @ 5.58 Raw P&L: -$37 Opened today: None Closed Today: None Observations: My paper trading account got blocked for "pattern day trading" behavior. Since my new account has less than the minimum legal of $25.000 necessary to cover regulations, IBKR is giving me some issues. This would not have an effect on my actual portfolio, IBKR is just annoying me because I use my paper trading account to try out a lot of trades, behavior that I would not necessary engage with in real life. Problem will be soon fixed.
Progress Report 50 Bearish Wolf What has been keeping me busy today: Making a new P&L worksheet. Reading up on "small traders" regulation. Diving deeper into the "OMIB" model. How has the portfolio done today: Continuing Trades (Open Before Today): TQQQ Covered Call. 100 Shares TQQ @ 95.2 (long) Daily P&L +4.02% 100 TQQ JUL27’20 95 CALL @ 7.98 (short) Raw P&L: $-160 SPXL Aug21’20 40 CALL (Naked Short) @ 5.58 Raw P&L: -$30 Opened today: None Closed Today: None Observations: I managed to get confirmation that my account is not blocked for pattern trading behavior, they jus blocked it due to some "irregular" trading behavior on Friday. It will remain blocked for up to 4 more days, where I cannot make any trades. Opening that conversation, though, allowed me to look into the margin requirements at IBKR and learn more about that. Related to these margin requirements, I have set up a new Excel sheet (no coding needed, would you look at that) to more seriously track my trades. I have decided to go with "money tied up" as the basis on which I calculate P&L. e.g. If I am short a put with strike at $45, then $45 are "tied up" in capital. I need to keep this in cash for if the option is assigned. Similar concepts can be applied to other types of option strategies. I mentioned earlier that I would be creating a new trading account with tons of paper cash to trade. This was apparently not possible without cutting through a lot of red tape. I am not feeling like doing that right now, so, at the moment, I have my small paper trading account and soon will I deploy the cash in my real account.
Progress Report 51 What has been keeping me busy today: University. Community Events. How has the portfolio done today: Continuing Trades (Open Before Today): TQQQ Covered Call. 100 Shares TQQ @ 95.2 (long) Raw Daily P&L +$322 100 TQQ JUL27’20 95 CALL @ 7.98 (short) Raw Daily P&L: -$200 SPXL Aug21’20 40 CALL (Naked Short) @ 5.58 Raw Daily P&L: -$37 Opened today: None Closed Today: None Observations: The naked SPXL was a bad idea. It needed to be covered to make sense, otherwise the strike price needs to be way higher.
Progress Report 52 What has been keeping me busy today: University. How has the portfolio done today: Continuing Trades (Open Before Today): TQQQ Covered Call. 100 Shares TQQ @ 95.2 (long) Raw Daily P&L +$344 100 TQQ JUL27’20 95 CALL @ 7.98 (short) Raw Daily P&L: -$224 Opened today: UVXY Jul10’20 29.5 CALL (short) => Credit of $247 Closed Today: SPXL Aug21’20 40 CALL (Naked Short) @ 5.58 Raw Daily P&L: -$87 Observations: Account is not blocked anymore, trades can continue as before. A lot of time is going to exam preparation at university, unfortunately.
Progress Report 53 What has been keeping me busy today: University. Exams. Preparing for the mental test at one of the prop trading firms. I have got it covered now. Goal is to send my application in no less than two weeks from now. Moving funds around to my broker account. No market update today, markets closed Observations: -None