I'm sitting here bored as hell for the last week. There were a couple of attempt to break out of the range, which I sold small, but for the most part we have been in the same spot for the last week. This, I think, illustrates an important aspect of option trading, namely pick your points wery carefully. This sideways action isn't costing me much since much of the time value is gone, the 20 puts in csco are .10-.15. If this was occurring at the strike, it would be a different result with time value decaying and causing a painfull bleed. So looking back on the long vol portion of this short gamma journal, the important factor in the positions profitability is the entry point. One, it was entered into at the strike. Second, and most important, the stock was at an inflection point. For reasons of my post above, I decided to lean long, but it didn't really matter as the position was hedged.
Going to sleep long a FTSE future with a stop in the low 4330 range. I bought, literally, the 52-week high, 4340.5. This was my vehicle of choice because this index was at that point of breaking out. I'm not neccessarily a technical trader so it isn't important for me to wait. Back in '97, as the SPX was moving through 900, I told my boss,"I sure as hell don't want to be the 900 future buyer." His response was,"I'll be the buyer." He was right at the time as the index topped out at 980 that summer. So, am I paranoid about buying the top, nope. The market says to me it is going higher. Typically at this point I would be freaking out with paranoia. What has been odd about the last couple of month is how it feels that there has been less emotion than at any previous time in my trading. Anyways, my stop is already in place and since I may hold this for several days, goodnight. Taiwan made a new high last night. It will be interesting if the Nasdaq can follow, could be a good tell.
Well, this is the only post I've read so far in your journal but already you've got my attention - perhaps the only other person on ET who knows enough to watch Taiwan as prelude to NQ. As you may or may not know, TSM and UMC, the world's two largest IC foundries, reported very strong Sept. revenues late last week. Taiwan regs. require that local companies report revenues on a monthly basis - no need to wait for quarterly conference calls to get a bearing on how business is trending. Revenues are reported by the 10th of every month, so they should report Oct. revenues on or before Nov. 10th. I'll go back & read the journal later today ...
I have followed the pickup in Taiwan for a while now, but looking at the numbers last night still impressed the hell out of me. The fact the index went up on the report, rather than close down on the session in some sort of reversal, was equally inspiring. Today wasn't a blow out day in the NASD which is good. This market seems to have sucked all the vol out of itself. My long Z(FTSE) had a nice finish, will move up the stop. Looking for a breakout in CSCO the nect couple of days, still long 2000 deltas of that.