Neke, How far otm do typically go when you enter your option positions? I assume that you'll go at least 4 or 5 strikes away from atm with a front month expiration, and hold on to the position for a day or so... Is that correct? thanks, Walt
Weekly Update for week 43 ended 11/07/2008 Frustrating week, down 37K (9.5%). I've always had some sense of apprehension each Monday,as the lack of trading over the prior days makes me too eager to enter the first trade without due diligence. That happened on Monday, as I shorted CME, kept averaging in until I became insanely leveraged on stocks and put options (average entry price 290). Compelled to close later in the day for a total loss of 52K (36K on the stock and 16K on the option. The stock closed friday @ 269: what a belated vindication!) The rest of the week was spent gaining a little back at a time with two steps and giving it back the next step. Withdrew 10K for the month ended Oct 31. Hoping for a better outcome next week. Code: Opening Balance: 388,606 Net loss for the week -36,847 Cash Withdrawal -10,000 ------------------------------------------------ Net Balance: 341,759 Number of Trades 24 Number of Profitable Trades 17 Since Inception of Thread 01/13/2008 - 11/07/2008 Opening Balance: 102,615 Net gain (Less Margin Interest) 264,144 ------------------------------------------------ Balance Before Withdrawal: 366,759 (Up 257%) Cash Withdrawal -25,000 ------------------------------------------------ Net Balance 341,759 Number of Trades 1020 Number of Profitable Trades 605 Top/Bottom Discretionary Trades for the week TICKER ENTRY DATE/TIME EXIT DATE/TIME QTY PURCHASE AMT SOLD AMT GAIN/LOSS TYPE SWGWT 2008-11-05-13-28-37 2008-11-05-15-33-48 20000 81000 98000 16680 SPY PUT ------------------------------------------------------------------------------- CMEWU 2008-11-03-11-56-33 2008-11-03-14-06-07 5000 99400 83720 -15806 CME PUT CME 2008-11-03-09-39-50 2008-11-03-14-03-52 3000 902945 866406 -36574 SHORT
Good luck to you Neke... needless to say, your style will experience material set-backs on occasion. However, your windfalls seems to offset it tremendously. I guess with the rose petals come the thorns. You are an inspiration. Although I doubt that I'll ever have the psychological strength to trade at such risk mgmt levels. BTW, do you have more success trading options than stocks? Do you find spreads (such as vertical debit or credit) worthwhile? thanks, Walt
This is an enjoyable journal to read and you clearly have a great understanding of what you're doing. But I'm wondering, even if you are positive expectation, doesn't the volatility give you a significant risk of ruin? Take blackjack. You may be an expert card counter, and you may have found a great game setup, but if your bets are too large for your bankroll, you could still end up being forced out of the game.
Never ceases to amaze me. Why did these guys suddenly discover at 1pm today that stocks are cheap? And for that they are ready to bid even after 10% up move from the lows?