Re-visiting All In... Again.

It would appear that I needed to revisit my targets for Optioneer trading. After suffering a loss of profits, (not a loss in capital), and not getting the fills that I was targeting, namely $300 per trade per month, my targets need to be massaged.

My current was 6% of the trade value or $300 based on the $5000 total exposure. That worked out to a 6.6% ROR based on the 1.55 point target profit ($309.50). The lowest I was willing to go was $297 which is still 6.32% ROR. The scale is as follows:

1.3 points = $247 = 5.20% ROR
1.35 points = $259.50 = 5.47% ROR
1.40 points = $272.00 = 5.75% ROR
1.45 points = $284.50 = 6.03% ROR

The thing that I was losing sight of was the advantage of having as much capital in play at any time. All possible trades for each month. The issue is that this restricts me to placing the 30 day trades which puts me at the mercy of the market if the entry date is not the idea date. This is what happened in February as I filled last days and the market dropped out.

Having said that if I had stuck to my view of the market at the time I would have seen 100% of my profits...I waffled and fell prey to the emotions of the market and chose to close when I should have held..

So, I can drop to $284.50 target profit and still meet my original 6% ROR, but that is not enough of a change to make this work.

I figured that I could boost my returns by using the Eminis to place trades of 1/5th size to avoid having the odd bits of cash languishing which effectively increases my yield a bit. Then placing the odd call spread above my margin allowance to again increase my yield. All in all if I drop my initial target from 6% to just getting in at the minimum day count at whatever price I would be farther off.

Missing a $250 trade expiring in March in favour of a $325 trade expiring in April doesn't cut it.

Getting a lower $250 trade in March and another $250 in April is $500. Missing March and getting only $325 in April.. well... it isn't $500. Now $250 trades are really $247 and that is a 5.20% trade.

Assume that I can squeak $200 to $300 extra right now due to partial trades and call spreads. That amounts to $35 to $43 per trade or another 0.73% to 0.9%. This bumps me back up to the 6% plus mark again.

So the new plan...or revisiting a version that I already had written about... is to just get in 100% each month even if it means accepting lower fills and perhaps even closing the odd trade a day or two early to free up capital.

I wish that I had done this thinking last night as I missed the last day to secure March EOM expiry trades today... time to review the trades coming up for April and get them filled. I have the luxury of time now so I can cherry pick these trades and get the fills that I want for a few days.

I might be able to talk my broker into placing call and put spreads even though they are, technically, not part of the optioneer strategy anymore...just to get filled.

Jeff.