Of course it always feels bad to lose. There are lessons learnt or re-learnt from almost any loss, but generally a big loss means next time I am going to be careful and play more according to plan, and as long as I do that I think the account growth takes care of itself.
Weekly Update for week 48 ended 12/12/2008 An OK week, up 18K (4.2%). Very few trades (13), but still plenty of action. Fell into a big hole on Monday, shorting the SPY soon after the open (10000 @ 90.37). Shorted CME as well 2000 @ 210, another 2000 @ 220). Closed SPY @ 91.8, losing 14K, CME at 223.5, losing 32K. Total loss for the day 51K. Came back powerfully on Tuesday. Again it was CME. Got 60 put contracts @ 12 when the stock rose as high as 236 (The stock had become non-shortable just when it was ripe for shorting). Sold near end of day for $20 per contract, netting 48K. Wed was relatively quiet, losing 6K on ERTS. Should have stayed off the market on Thur because there were no opportunities. However, bought into the fake strength in the SPY and BIDU. Watched as another Thur afternoon swoop thrashed my positions, losing 14K on the SPY and 25K on BIDU. Finally made it on Fri buying the early morning sell off in SPY long and calls, making 29K on the stock, and 25K on the option. Market played out exactly like last week (End of day sell-off on Thur, Sell off at Open on Fri, followed by a tremendous rally from the open. The market obviously wants to go up.) Looking for discipline to stay off when the market has nothing to offer. Code: Opening Balance: 432,427 Net gain for the week 18,119 ------------------------------------------------ Net Balance: 450,546 Number of Trades 13 Number of Profitable Trades 7 Since Inception of Thread 01/13/2008 - 12/12/2008 Opening Balance: 102,615 Net gain (Less Margin Interest) 372,931 ------------------------------------------------ Balance Before Withdrawal: 475,546 (Up 363%) Cash Withdrawal -25,000 ------------------------------------------------ Net Balance 450,546 Number of Trades 1127 Number of Profitable Trades 665 Top/Bottom Discretionary Trades for the week TICKER ENTRY DATE/TIME EXIT DATE/TIME QTY PURCHASE AMT SOLD AMT GAIN/LOSS TYPE CMEXL 2008-12-09-10-44-04 2008-12-09-15-56-33 6000 72400 120000 47509 CME PUT SPY 2008-12-12-09-33-11 2008-12-12-12-59-13 10000 854400 884000 29595 LONG SZCLH 2008-12-12-09-34-10 2008-12-12-12-58-34 20000 52470 78000 25230 SPY CALL --------------------------------------------------- SPY 2008-12-11-14-15-23 2008-12-11-15-03-16 10000 896492 882040 -14457 LONG BIDU 2008-12-11-11-50-12 2008-12-11-14-44-24 4000 476860 452029 -24833 LONG CME 2008-12-08-09-34-58 2008-12-08-15-58-56 3500 782250 750000 -32254 SHORT
Neke, nice job building your account. The option spreads on a stock like CME are usually rather large. Does the spread affect which strike price you plan to trade? Also, how do you choose where to price your bids and offers, at market, or do you pick a price somewhere in the middle?
I use a limit order somewhere between the bid and ask. Example, if is is bid 11.60 ask 12.30, I may place the bid order at 12.00. I could still pay for slippage, but normally not as much as the quoted spread. I would normally go for the strike out of the money but nearest the money.
Great thread, not only for neke's performance but also transparency. Why can't they all be like this one?
With all due respect for Neke, statistically he is about 5 in 100 who made it this far (especially with the risk he is dragging along), and this comment should make it clear that I even respect him the more for his outstanding performance. But lets be clear about the fact that this is an outstanding and exceptional performance most others dont have the stomach and mentual make up to mimic his returns. Also, I think its bullocks to use Neke's returns to criticize the comment below, whoever may have given it. I also find it laughable to hear each and every week some wannabe traders and high school kids who made Neke to their new trading-guru. Neke's risk levels make it very clear that he has got to endure some very nasty drawdowns (which he already went through) and that there is a risk of complete blowup should he hit a streak of losing trades that exceeds statistical normalty. I am not one of those doomsday sayers and proclaim a sure blow up for Neke but what I do say is that his performance is a direct function of an extremely high risk level he is accepting to take. Most here love the returns but dont want to take the risk -> This does not go together!!!
Neke: shortie told me about your thread in a PM. I did not even know you existed if it were not to him. I like the action on this thread! Question: 1. Why you do not work with ITM options (sell ITM calls instead of buying puts for instance)? 2. If you can look at your money management, how does it compare to Kelly's fraction? (are you above it or below it). 3. If you can give your ratios: prob of win, average win, average loss, it would be good!