Hi neke. I hope you'll achieve your goal. Sorry about your drawdown but I think such drawdowns are unavoidable if youâre trying to turn 75k to 500k in less than a year. Assuming you have correctly estimated your weekly edge at 50-50 20% gain 10% loss and you are going for a growth rate of 5.9% a week with 2.5 leverage, you can expect worst max drawdown to be above 70%.
It depends on the time to expiration and my expected holding duration. I normally aim for the nearest out-of-money strike price. But if it is too far away, or the stock is expiring in a few days, I may go just for the in-the-money option. This reduces rate of deterioration of your premium.
That performance is commendable. Of course a 30% drawdown is normal with such a strategy. I hope you are not staking it all in one option. This is a really strong-trending market. Buying anything on the upward move in the morning almost always leads to bigger gains by close of market. Like all good things it could come to an end. You need to manage your exposure and know when the tide is turning. I generate text files of my results using a VB program that looks at my downloaded text account statement and aggregates and summarizes according to my specified rules. I then embed the text into ET post using the [ code ] [ /code ] tags (omit the spaces, was added to preserve the tag).
Weekly Update for week 20 ended 07/13/2007 Spectacular week! I guess the right words to describe these past two weeks in the market is MOMENTUM MADNESS! I was reluctant to play it much until this week. Almost any stock with any quality that starts the day up finishes the day even much higher. That is obviously not surprising giving that the Nasdaq-100 index has risen by 2.5% each of the last two weeks. I could reel off the names of stocks that have shown such trends on one day or the other: CME, RIMM, AAPL, FSLR, CMI etc. I wish I had participated in all of them! At times like this it makes raking in money through the market look simple, since any Tom, Dick and Harry could hop onto a momentum stock in the morning and finish up the day higher still. On Monday, I hopped onto the momentum in FSLR when I discovered it, leveraging using options. Bought 60 contracts at 10.20, closing at 13.70 before end of market for a gain of 20.4K. (Who would buy this stock and hold at those levels for 6 months?). Thursday bought 90 contracts of MA 165 CALLS at 5.7 after discovering the momentum (too late, what was I waiting for all day!). Held overnight till Friday and exited at 8.9 after that vertical move up about 10am, making 30K. After waiting for some time and seeing it holding firm, decided to load up 100 contracts of JULY 170 at 5.70. Big mistake! You do not buy the second day of a rally. Forced out at 3.90 for a loss of 18K. Another mover on Friday was SGR whose JULY 55 calls I bought and sold, making 23K. On the stock side, shorted 5000 ALNY at 25 on Monday (pre-market), and closed at 23 for a 10K gain. Am I glad we have this momentum madness? Yes and No. Yes, because it makes it easy to rake in money on the long side. No, because when it's so easy to make money, it means a sudden sharp reversal is in the offing which will hurt unprepared, over-leveraged folks. I only hope I am not part of them. Altogether lost 3K in Automated methods, and made 74K by discretionary methods for a total of 71K (60% for the week), the largest one-week percentage gain in the last one year. I am glad to be once again above my target trend line. Here is one regrettable trade I missed. On the last pullback in the market on June 27, I saw this stock (PKX) which was on my watchlist and wanted to buy the JULY 120 call. the stock was at 115.6, and the options were trading bid 2.3 ask 2.7. I thought the spread was big (having lost a lot on spread costs in my prior year's bad option day-trades). I put in a limit to buy at 2.60 hoping it should be good enough for the market maker. My order failed to execute, and after some time the stock started up, never to come down again. Last time I checked PKX, the stock is at $150. Wow! I missed out on a potential gain of $27.30 on a cost price of $2.70, haggling over 10 cents!! That hurts. For the next two/three weeks we have a barrage of earnings reports. With that come lots of opportunities to make (or lose) money. Need to remind myself not to overtrade. Code: Balance B/F: 119,009 Gain for the week (Less Interest) 71,203 ------------------------------------------------ Balance C/F: 190,212 Number of Trades 26 Number of Profitable Trades 15 Since Inception of Thread 2/25/2007 - 07/13/2007 Balance B/F: 76,636 Net Gain (Less Margin Interest) 144,576 Cash Withdrawal -31,000 ------------------------------------------------ Balance C/F: 190,212 (Adjusted balance before withdrawals is 221212, up 189% ) Number of Trades 498 Number of Profitable Trades 296 Expected Balance at this time to be on track for Year-End Target : 179,755 Status: Ahead of Target (Based on adjusted balance before withdrawals) Top/Bottom Discretionary Trades for the week TICKER ENTRY DATE/TIME EXIT DATE/TIME QTY PURCHASE AMT SOLD AMT GAINS TYPE MALGM 2007-07-12-15-25-41 2007-07-13-10-12-18 9000 50600 80100 29334 OPTIONS (MA) SGRGK 2007-07-13-10-17-52 2007-07-13-15-59-16 30300 68400 92150 23234 OPTIONS (SGR) QHBGA 2007-07-09-10-26-37 2007-07-09-15-13-45 6000 61200 81832 20481 OPTIONS (FSLR) RFYGD 2007-07-13-14-16-01 2007-07-13-15-22-51 5000 39000 50000 10904 OPTIONS (RIMM) ALNY 2007-07-09-08-05-42 2007-07-09-11-03-52 5000 114781 125000 10197 SHORT ----------- CPWR 2007-07-11-10-06-01 2007-07-11-12-07-11 10000 97100 96300 -822 SHORT APVGG 2007-07-10-12-51-26 2007-07-10-15-11-46 10000 23950 20500 -3620 OPTIONS (AAPL) SCHN 2007-07-09-09-32-43 2007-07-09-10-18-07 1000 61079 57240 -3860 PRECONS VTAL 2007-07-11-09-26-07 2007-07-11-16-23-36 16000 320892 315562 -5404 SHORT MALGN 2007-07-13-10-43-57 2007-07-13-13-55-43 10000 56920 39010 -18091 OPTIONS (MA) (Before Interest and Other charges) TRANSACTIONS ANALYSIS FROM 2007-02-25 TO 2007-07-14 Current Week | Since Inception of Thread | Method Gains/Loss No Of Profitable | Gains/Loss No Of Profitable Trades Trades | Trades Trades Automated AutoTrade1 -2033 5 2 | 34168 136 80 AutoTrade2 257 1 1 | 3719 4 3 AutoTrade3 -1448 1 0 | -1448 1 0 ----------- -------- ------------ | ----------- ------ ------------ Total Automated -3224 7 3 | 36439 141 83 ----------- -------- ------------ | ----------- ------ ------------ Discretionary Long 2063 4 3 | -55294 142 81 Short 5631 6 2 | 44145 137 84 Options(long) 66743 9 7 | 120236 78 48 ----------- -------- ------------ | ----------- ------ ------------ Total Discretionary 74438 19 12 | 109087 357 213 =========== ======== ============ | =========== ====== ============ Net Totals 71214 26 15 | 145525 498 296 =========== ======== ============ | =========== ====== ============
congrats neke, nice to see you get back on track again. I've made some nice dough trading the ES the past week as well
Neke's equity curve separated @ week 12 and redrawn. It's funny how the mind is always looking for patterns.