OK, I decided to buy back my short put so now I'm going to be even more bearish (which is my bias at this time) and will adjust this when my thoughts change. I've effectively "doubled up", but if the market continues to display "irrational exuberance", I'll not be out much at all.
Are you talking about collars here (matching tenor on the CALLs and PUTs) i.e. synthetic bull verticals: limited risk/limited reward? I'm missing the connection with haircut If you don't want to deal with the e-mailing you can always upload your presentation to a file hoster such as www.filefactory.com or similar (Google: free file hosting) MoMoney.
With permission I've posted this on the net for anyone else to download www.achey.net/ET/Options_600-Proprietary_Trading.ppt Have fun, Damon
No worries, will let you know if I do adjust. This closing at the short strike is something I picked up from Mark/dagnyt and is something im experimenting with. But thats not set in stone and I sometimes close 10-15pts from short strike, cause gamma really hurts the last 10pts. Im also scaling into my positions. Also moving more towards Credit diagonals as well, ala Mark. Thanks Mark Not sure if I'll be successful but will give it a go and see how i fare. So basically im currently all over the place trying different things but leaning towards credit diagonals. But whatever the strategy, this market action is not too good for any kind of premium selling or short gamma? strategy, be they credit spreads or credit diagonals. Im trading more ES options now and the spreads are not that wide and its quite easy to get filled if one not too agressive. Anyway, will stop carrying on and will update when I close. I've already priced what its cost to close at the short and its about 5.00 debit. Cheers
Hope it works for you. I find that it hurts to close, but because it limits losses, it makes the overall strategy successful. And that's the bottom line. Mark
With this market I don't think it matters what the jobs numbers are going to be Friday, the market will keep moving higher. I picked a bad month to put on bearish positions didn't I?
Ryan: Which "bearish" positions are you holding. Since misery loves company, enquiring minds want to know. Thanks.
I've got bearish XEO and RUT postions that are in the red. Actually, my RUT position was in good shape until today, sucked all the profit out of it and now back to a slight shade of red. This upward run and draining of volatility is not helping my SPX diagonals either. Need a decent pullback that lasts longer then a few hours sometime soon to help me out.
For those of you nervous for me on my 1360/1375 adjusted into ES/EW diagonal, I scaled out of half the position on the big drop the other day and today rolled into a 1375/1380 Bull Call Spread. So I took my shorts off the table and took a small loss and have a bull call spread since today's leap points us higher. Even if I close the bull call spread for almost nothing if the market crashes, this would be my first loss of any significance in about 3 years. And in case any of you are wondering, no this does not wipe out my credits from the past few years at all, I am still net positive by a long shot. If I did absolutely nothing and let it run to 1375, then I would have been in trouble. 1357 was my exit point. . So I raise I glass to my first little drawdown and smile that my accounts are still positive over all and I cut my risk when needed to. That is the secret for longevity. A loss is not a big deal if you keep it a small loss relative to your account. If you stare and watch it mushroom then you are in trouble. By scaling out in the downward move, I was able to get out today at a smaller loss then if I left the position whole. ROlling into the bull call spread took in more premium to dull the pain and I can make more money if we keep running since the bull call spread is in the OCT EW call cycle. So all in all, I amhappy with the way it turned out despite the market moving against me. Tomorrow I will be grabbing deep OTM call spreads for NOV