Less than two weeks to D-day

August option expiration is next week and I have positions that are too large due to past sizing rules. It is not so much that they were initially too large but that we, as a group, increased the sizing when the prices were better in order to average the cost down. That and I changed my sizing after getting into some of these. In order to take full advantage of the total trading plan I followed along and bought more of some positions as recommended... knowing that these were swing trades and knowing that I probably should have just left well enough alone. The trouble is that if a adding more contracts is called for then the average cost is the consideration when selling to determine if a profit is to be had...therefore if I do not enter the second string I run the risk of having to sell for a loss when the group is selling for a profit.

I need to rethink that process.

As a group we are all supposed to know how to properly size and manage our accounts, which is fine, and I expect to take some hits in order to learn some of what I may not know or may not have tuned in yet. The issue has been that the trades that are supposed to be day trades have turned into swing trades. I have managed my account according to daytrading rules only to have some of these trades turn into swing trades after they did not work out in the morning trading. In hind sight I should have just closed any and all trades that were closing for a loss at the end of trading in the morning. Either that or just "re-sized" them to hold a much smaller position over. This would have let me still continue my daytrading as planned and also allowed me to take advantage of some of the swing trades with a minimum risk.

I don't mind holding a trade for a few days but holding through to expiration does two things:

1) it risks the option expiring worthless for a total loss of the position

2) it ties up that cash that could be used to day trade regularly therefore making up for any smaller losses.

I do not have trade records to be able to run the numbers for closing trades at the end of morning trading compared to holding them over but given the size of the trades right now I know that any loss would have been at least mitigated if not eliminated.

All in all the market is looking pretty bedraggled and ready to do some serious plummeting so I would hate to cash out only to miss some nice gains as a result. That is the crux of the situation as it stands now.

Jeff.