I keep having to pull myself back from overtrading. I have considered selling and buying this gold trade a few times and I may have come out ahead based on my timing BUT I am resisting and sticking to the plan.
Today I moved the stops up on my first trade and entered a second position, double basically, and set the same stop. This has me at breakeven for trade one and 33 cents down on trade two.
Today's entry was close to not getting filled due to the shallow pullback off the start, but I stuck to my entry price. Had I started earlier I would have got my price pre-market, just busy with other stuff.
I am starting to go over my previous trades, as I mentioned I was going to. It looks a little monotonous as I will have to print out and manually annotate my charts as there are no studies that cover what I am looking for. Most indicators are available (Aroon, On Balance Volume, moving averages and perhaps I'll use the Bollinger bands) but cross referencing time scale charts with non-time scale charts... either nobody does it or they have and not found it useful.
Actually, over the years I have found that all of the non-useful stuff is readily available and all the really good stuff is near to impossible to get without having to pay a fair price to get, so I am now wondering if what I am doing is just one of those things that may happen to work very well. If nothing else I can prove or disprove that theory this weekend. The trouble with any study is trying not to let the known future affect the trade ideas that are to be based on the past data.
Jeff.
Questrade, My direct access discount broker.
Showing posts with label update. Show all posts
Showing posts with label update. Show all posts
Friday, February 18, 2011
Wednesday, February 16, 2011
Gold continued....
It's nice to be in a trade that is actually doing something.
EOD today has my gold trade up 1.82% as gold sits in the mid 1370's. Target is somewhere over 1400.
I have closed all of my other trades as of yesterday. While my win rate is just under 50% (too many shorts as the shorts did me in with this grinding rally overall) I have more data to play with while I wait for the setups to setup and trigger. I decided to apply an On Balance Volume (OBV) indicator to my trades to see how it reacts to the various price moves. I haven't been using volume as a factor in my trade decisions lately and I think that it may have been a factor that could have made me take, or close trades at a different point.
Sometimes simplifying things too much can be just that... simplified too much.
Jeff.
EOD today has my gold trade up 1.82% as gold sits in the mid 1370's. Target is somewhere over 1400.
I have closed all of my other trades as of yesterday. While my win rate is just under 50% (too many shorts as the shorts did me in with this grinding rally overall) I have more data to play with while I wait for the setups to setup and trigger. I decided to apply an On Balance Volume (OBV) indicator to my trades to see how it reacts to the various price moves. I haven't been using volume as a factor in my trade decisions lately and I think that it may have been a factor that could have made me take, or close trades at a different point.
Sometimes simplifying things too much can be just that... simplified too much.
Jeff.
Wednesday, October 6, 2010
CMC live stock trade and odd comments
I have been busy with all sorts of projects lately, not the least of which is getting my trading strategy tweaked and making sure that I am positioned where I want to be. It would certainly be a lot easier if I were just following someone else's plan... but wait.... I tried that already and none worked.
So, I have some new trades on the go and they are looking, well, traded. One took off out of the gate for me, which was nice. $1.50 in the first 30 minutes of trading after getting in on the first target price ($26.00) yesterday and seeing it drop by 50 cents ($25.50ish) into the close. Although it dropped that much I was allowing it $3 of room to drop right down to $23.00. Perhaps this will be a shorter than average trade... I always like those.
For my live trade that is posted, CMC, I am in for an average of $14.76. Actually it is only one position so it is hardly an average. I didn't manage to get in at $15 for the second entry (busy) so I figured getting halfway between first and second entry pricing was good enough. It sits at $14.86 right now.
I posted the stop for CMC at $16.00 but I am not overly fond of even dollar stops as they seem to get "just touched" before the price reverses often enough that, at this price level, I will change it to $16.15 or $16.20.
Wednesday, September 22, 2010
CMC Live Trade Update
I was looking over my charts today and realized that I need to adjust the exit target for CMC. The second exit target needed to be lowered by $0.50 to $13.50 due to my shift in profit targeting but, more importantly, the primary entry needs to be raised to $13. 50 due to the next trade setup.
I already posted the first change in the Live Trade column so I will update the latest exit and post the next trade setup.
Next trade entry will be:
Entry 1 - $13.50 Target - $15.00
Entry 2 - $13.00 Target - $14.50
Entry 3 - $12.50 Target - $14.00
Full Stop at $12.00
The exit targets may shift depending upon how low the next move goes... if it only fills one or two of the trades then the exit may shift down a bit on the first trade in order to secure profits. and to set the next short trade if it sets up as well.
Jeff.
Thursday, March 25, 2010
March 25th
Opened and closed a few trades, finally closing one that has been hanging for a couple of weeks. Sadly I lost about 18 cents when I could have held it for a break even a little later in the day. I set a VTSO but was too tight. Oh well, not enough to worry about. I did close out one loss late yesterday for almost $1 per share, it needed to go.
My stats are updated and are still looking reasonably good as my daily average is staying above $240 and my trade average is over $115.
I closed out a trade from another service but I don't count those in with these trades, although I could as they are very similar in duration and scope. I messed up a bit on it though. It was an option entry aimed at under $2 and I got in at $1.30. The standing target was to be 100% return to close automatically so I set my limit sell at $2.60... I should have set it for the 100% of $2 entry target or $4. Today the stock gapped at the open and the option went through $3 and was advised to be sold for $3.10. I let it go at $2.60 giving up 50 cents in profit... although I won't really complain about a 100% return seeing as anyone else likely bought at $2 and made $1.10 or 55% profit.
Counting these service trades as well bumps my daily average to $288 and my trade average to $134.
As much as I hate to look a gift horse in the mouth I am expecting to book some losers soon. i have to hefty positions not doing so well and a smattering of smaller ones also. The day trading is nice as these are offset beforehand as we open and close trades each day booking profits to offset any potential looming losses.
I need to remain focused on "right sizing" my trades and using balanced sizing. For example a $10 option might be best to use a 1 contract trade, a $5 option 2 contracts, a $3 option 3 contracts, $2 option 5 contracts. This can be scaled to match the capital being traded with as each represents an approximate or maximum $1000 risk per trade. If I were to risk $2000 then just double the contract count.
The key here is that any loss is not bigger than any other loss so losses do not suddenly get larger than gains due to an attempt to cherry pick the trades. I have always said that in order to win with someone else's plan all trades must be taken as picking half could end up with all the losers being picked. This day trading the only trades I have not taken have been ones that I have not managed to get into due to just missing the price. So far I am among the quickest traders so I have not missed very many at all..
Today I missed the $4,000 mark by about $50 in the three main systems that I am using. There is still tomorrow.
I am discounting the Optioneer stuff right now as I found some inconsistencies in the accounting and I am waiting for a response about this. The account is in the red, enough that there is no way that I can recoup the loss in the time frame allotted for the performance guarantee...so we will see what happens there. If this day trading and other services keep going like this I may consider transferring some cash back for this shorter term more lucrative trading...put it where it works the best.
Jeff.
My stats are updated and are still looking reasonably good as my daily average is staying above $240 and my trade average is over $115.
I closed out a trade from another service but I don't count those in with these trades, although I could as they are very similar in duration and scope. I messed up a bit on it though. It was an option entry aimed at under $2 and I got in at $1.30. The standing target was to be 100% return to close automatically so I set my limit sell at $2.60... I should have set it for the 100% of $2 entry target or $4. Today the stock gapped at the open and the option went through $3 and was advised to be sold for $3.10. I let it go at $2.60 giving up 50 cents in profit... although I won't really complain about a 100% return seeing as anyone else likely bought at $2 and made $1.10 or 55% profit.
Counting these service trades as well bumps my daily average to $288 and my trade average to $134.
As much as I hate to look a gift horse in the mouth I am expecting to book some losers soon. i have to hefty positions not doing so well and a smattering of smaller ones also. The day trading is nice as these are offset beforehand as we open and close trades each day booking profits to offset any potential looming losses.
I need to remain focused on "right sizing" my trades and using balanced sizing. For example a $10 option might be best to use a 1 contract trade, a $5 option 2 contracts, a $3 option 3 contracts, $2 option 5 contracts. This can be scaled to match the capital being traded with as each represents an approximate or maximum $1000 risk per trade. If I were to risk $2000 then just double the contract count.
The key here is that any loss is not bigger than any other loss so losses do not suddenly get larger than gains due to an attempt to cherry pick the trades. I have always said that in order to win with someone else's plan all trades must be taken as picking half could end up with all the losers being picked. This day trading the only trades I have not taken have been ones that I have not managed to get into due to just missing the price. So far I am among the quickest traders so I have not missed very many at all..
Today I missed the $4,000 mark by about $50 in the three main systems that I am using. There is still tomorrow.
I am discounting the Optioneer stuff right now as I found some inconsistencies in the accounting and I am waiting for a response about this. The account is in the red, enough that there is no way that I can recoup the loss in the time frame allotted for the performance guarantee...so we will see what happens there. If this day trading and other services keep going like this I may consider transferring some cash back for this shorter term more lucrative trading...put it where it works the best.
Jeff.
Tuesday, March 23, 2010
March 23rd...no sense in getting fancy
No sense in getting fancy as things just roll along here. Opened a few trades, closed one for a $260 profit. Targets are set for the others. I end up left in four open trades, two from previous days and two from today. I know the idea of day trading is to be in and out of trades same day, first hour in fact for these, but with the market not showing much volatility the trades are just not moving right away, so we hold them for target prices or for review the next day.
Stats:
Daily average is up a bit to $235.26
Trade average is up to $112.93
25 trades closed
12 days in
So far none of the option trades have been bad...some break evens and some small gainers but no losers. Cool.
Things ran smoothly in the room today.
This is turning into a very boring blog as a result of no analysis or insights, if anything prior could be called insightful.
Oh, well, I am making money and that, while isn't terribly exciting for anyone else, is pretty good for me.
Up 28.23% in my account to date.
Jeff.
Stats:
Daily average is up a bit to $235.26
Trade average is up to $112.93
25 trades closed
12 days in
So far none of the option trades have been bad...some break evens and some small gainers but no losers. Cool.
Things ran smoothly in the room today.
This is turning into a very boring blog as a result of no analysis or insights, if anything prior could be called insightful.
Oh, well, I am making money and that, while isn't terribly exciting for anyone else, is pretty good for me.
Up 28.23% in my account to date.
Jeff.
Monday, March 22, 2010
Funky day today in the trading arena
Boy. Today started out good, nice gap down in the market, I was really looking forward to some trading, get a handful of trades in, make some money and maybe even get to bump my stats up.
The trouble with trading with a group is the classic "lowest common denominator". I suppose that it isn't so much the issue as people not following instructions. The main one is to not ask about anything that we are not actively trading or at least actively watching. Being in on time to get the pre-market setups is important but not critical. Although if someone is late don't expect a rehash of the whole setup as the rest are trading and the moderator is trying to help us get in and out of profitable trades. Then there is an assumption that the room is supposed to be a nice warm cuddly space, well, it's about trading. Most are there by choice to make money, not be coddled.
The long and short is there are many who are a distraction for all that are there for some serious reasons and that blew today's trade up. We had a nice $500 trade set and it ended up being a $50 trade as we had to exit early in order to return order to the room.
Ultimately the trade hit the $500 mark and then some...made it to about $700, but nobody was in it then.
Enough whining on my part, tomorrow is another trading day.
Looking at my stats now I have lowered the numbers due to the small trade today.
I have been using play sizing with my trades through this service so far and today I decided to up the ante by using all option trades at 10 contracts unless they are really expensive options...anything up to an average of $3.60. That allows for perhaps a larger trade and a smaller trade to have the same potential profit target as $1 on options seems to be the norm. This way a loser cannot lose more than a winner due to just having more losing contracts than winning ones.
Going back over my trades thus far I altered the contract counts to reflect this to see what the numbers could have been had I traded full size right away. I could have done this as we have not had a lot of concurrent trades running... even though I allowed for 6.
Total days traded: 11
Total trades closed: 24
Average daily net profit: $ 398.43
Average per trade net profit: $ 182.61
Total net return for the 11 days: 43.83%
Seeing as I would not have traded full size until play testing this is just a hindsight speculation...but interesting none the less.
I updated my stats including today's piddly trade.
Jeff.
The trouble with trading with a group is the classic "lowest common denominator". I suppose that it isn't so much the issue as people not following instructions. The main one is to not ask about anything that we are not actively trading or at least actively watching. Being in on time to get the pre-market setups is important but not critical. Although if someone is late don't expect a rehash of the whole setup as the rest are trading and the moderator is trying to help us get in and out of profitable trades. Then there is an assumption that the room is supposed to be a nice warm cuddly space, well, it's about trading. Most are there by choice to make money, not be coddled.
The long and short is there are many who are a distraction for all that are there for some serious reasons and that blew today's trade up. We had a nice $500 trade set and it ended up being a $50 trade as we had to exit early in order to return order to the room.
Ultimately the trade hit the $500 mark and then some...made it to about $700, but nobody was in it then.
Enough whining on my part, tomorrow is another trading day.
Looking at my stats now I have lowered the numbers due to the small trade today.
I have been using play sizing with my trades through this service so far and today I decided to up the ante by using all option trades at 10 contracts unless they are really expensive options...anything up to an average of $3.60. That allows for perhaps a larger trade and a smaller trade to have the same potential profit target as $1 on options seems to be the norm. This way a loser cannot lose more than a winner due to just having more losing contracts than winning ones.
Going back over my trades thus far I altered the contract counts to reflect this to see what the numbers could have been had I traded full size right away. I could have done this as we have not had a lot of concurrent trades running... even though I allowed for 6.
Total days traded: 11
Total trades closed: 24
Average daily net profit: $ 398.43
Average per trade net profit: $ 182.61
Total net return for the 11 days: 43.83%
Seeing as I would not have traded full size until play testing this is just a hindsight speculation...but interesting none the less.
I updated my stats including today's piddly trade.
Jeff.
Friday, March 19, 2010
Rollin', Rollin', Rollin'...
Today was a better day for the day trading. There were five separate positions open from previous days and one of them was technically two trades. Now I only have two open trades as they did not move to target prices early today, perhaps they will later.
My total gross profit for the day was $1800. Commissions have to come out of that yet.
The quick take on my updated stats puts me at $319 per day and $111 per trade with a $2552 net profit or 25.52% for the last two trading weeks. If I can at least meet that every two weeks my pretax profits are in the $66K range.
Hmmmm... I have been using the day count as days that had trades opened on... but today none were opened and three were closed. While I count the trades back on the day the trade was opened I am going to count all the days as not doing so will skew my results and artificially inflate them. So, instead of 8 trading days in the last two weeks I will count all days, even Friday last that no trading occurred.
Daily average becomes $255 per day at 2.55% per day.
Updating my forecast according to those numbers puts me at the $50,000 mark every 40 weeks or 10 months... one of my original targets too. That is just working with the capital that I have in place right now.
My last post mentioned a daily target of $250, I figured at 1% per day I could achieve that in short order (months) so today's stats already has me beating that goal. $255 per trading day is 2.55% ROI. Doing some forecasting with compounding at 2.55% per day and using only 5 days per week instead of five will beat my $50K in 10 months by a little bit....
Say, by $400,000.
Oh Shit!
I double checked my math, it is correct...so I dropped to 2% per day and I see $135K in the 10 month window. That is a more realistic number...even if the first is possible I wonder if I will keep trading big enough to produce that kind of return.
The worst... or best... part is that this is based off of a $10,000 investment. Now, this is taxable income. The next step, as I mentioned, was to transfer to the TFSA to make it non-taxable.
The other best part is that the goal of the trading room is to see every member making at least $500 per day of trading... so I am low and I know some are already far higher than that due to their using the $25,000 minimum US regulated day trading capital minimum. Basically multiply my results by 2.5 or more and that is where I could be given more cash.
Even though these results are not completely mine to lay claim to it has taken two years to learn enough to know to look in the right places for these kinds of opportunities.
I have yet to close some of the other trade services trades and see some of those profits start streaming in.
Although, my Optioneer account took a large hit today due to the strange market opening activity... much larger than I or my broker or his colleagues anticipated. I suspect that I may have to exercise their performance guarantee after all as I see no way that my account can recoup this loss in the time frame allotted for the guarantee. Today I am considering yanking those funds and using them in my regular accounts. As much as this is a larger than expected hit I still have faith in the methodology of the Optioneer trading scheme, I just need to tweak the way that I am applying it... which means reduced return potential to play it far more conservatively.
We'll see what happens in the coming months.
Jeff.
My total gross profit for the day was $1800. Commissions have to come out of that yet.
The quick take on my updated stats puts me at $319 per day and $111 per trade with a $2552 net profit or 25.52% for the last two trading weeks. If I can at least meet that every two weeks my pretax profits are in the $66K range.
Hmmmm... I have been using the day count as days that had trades opened on... but today none were opened and three were closed. While I count the trades back on the day the trade was opened I am going to count all the days as not doing so will skew my results and artificially inflate them. So, instead of 8 trading days in the last two weeks I will count all days, even Friday last that no trading occurred.
Daily average becomes $255 per day at 2.55% per day.
Updating my forecast according to those numbers puts me at the $50,000 mark every 40 weeks or 10 months... one of my original targets too. That is just working with the capital that I have in place right now.
My last post mentioned a daily target of $250, I figured at 1% per day I could achieve that in short order (months) so today's stats already has me beating that goal. $255 per trading day is 2.55% ROI. Doing some forecasting with compounding at 2.55% per day and using only 5 days per week instead of five will beat my $50K in 10 months by a little bit....
Say, by $400,000.
Oh Shit!
I double checked my math, it is correct...so I dropped to 2% per day and I see $135K in the 10 month window. That is a more realistic number...even if the first is possible I wonder if I will keep trading big enough to produce that kind of return.
The worst... or best... part is that this is based off of a $10,000 investment. Now, this is taxable income. The next step, as I mentioned, was to transfer to the TFSA to make it non-taxable.
The other best part is that the goal of the trading room is to see every member making at least $500 per day of trading... so I am low and I know some are already far higher than that due to their using the $25,000 minimum US regulated day trading capital minimum. Basically multiply my results by 2.5 or more and that is where I could be given more cash.
Even though these results are not completely mine to lay claim to it has taken two years to learn enough to know to look in the right places for these kinds of opportunities.
I have yet to close some of the other trade services trades and see some of those profits start streaming in.
Although, my Optioneer account took a large hit today due to the strange market opening activity... much larger than I or my broker or his colleagues anticipated. I suspect that I may have to exercise their performance guarantee after all as I see no way that my account can recoup this loss in the time frame allotted for the guarantee. Today I am considering yanking those funds and using them in my regular accounts. As much as this is a larger than expected hit I still have faith in the methodology of the Optioneer trading scheme, I just need to tweak the way that I am applying it... which means reduced return potential to play it far more conservatively.
We'll see what happens in the coming months.
Jeff.
Tuesday, March 16, 2010
Updated Day Trading Stats
I updated my performance stats today. I closed some previous trades and opened a new one today. Nothing fancy, one 13 cent stock trade loss (300 shares) and a 20 cents option gain (9 contracts or the equivalent of 900 shares). Both trades fell short of targets but it resulted in counting the day they were opened as a positive day. My profit per trade went up and my profit per day went down.
I also entered five trades with the new service, all were filled as the prices pulled back in the stocks and I used limit orders based on the option prices at the close yesterday. I ended up with about $1600 invested in this service so I will track it accordingly.
My other stock service still has the majority of the trades open. My account is up in paper profits by about 4% overall right now as most are in the money and a couple are showing small losing positions...but that is normal when entering a new option trade.
Jeff.
I also entered five trades with the new service, all were filled as the prices pulled back in the stocks and I used limit orders based on the option prices at the close yesterday. I ended up with about $1600 invested in this service so I will track it accordingly.
My other stock service still has the majority of the trades open. My account is up in paper profits by about 4% overall right now as most are in the money and a couple are showing small losing positions...but that is normal when entering a new option trade.
Jeff.
Wednesday, January 27, 2010
More details on "All In"
I was lamenting the fact that I had no additional cash to plunk down on the new condor trades with the new lower S&P500 levels when I recalled that I have last months profits to play with, not just the base cash. Now I happen to be switching accounting companies for my US trading so it has been split between the new and old while trades settle so I don't have it all as one lump sum.
Seeing as I have access to the typical futures contracts and a condor needs up to $5,000 spare cash ($250 per point with 20 point spreads) I am limited to trades in that neighbourhood normally. I also have access to the E-mini contracts as well which have $50 points. The same 20 point spread will tie up only $1,000. As long as my 6% trade rule holds there is no reason why I cannot use these to "top off" my trading while I am in between $5k increments.
Today I placed an Emini for February EOM to top off my trades.
This little gem of a move will generally increase the profit potential of my entire account as I can now make all of my money and more of my profits work for me sooner.
Figuring that I can place $1000, $2000, $3000 or $4000 trades will serve to top off my profits in the neighbourhood of an additional $1800 assuming an on average trade size of $2500. This is a trade volume of $30,000 over the year at my 6% target for each month.
Nice bonus.
On the outstanding trade front, I am considering closing the put sides of my trades and letting the call side run. The broker deems the call risk so minimal that I can leave those call spreads active to get full profit from that side of the trade. This allows me to use my full capital buying power to open new trades at the new levels. I would like to see them closed today or tomorrow to cut risk and be able to put new trades on to still expire in February. This cuts losses now as well as creates a small compensation with the existing call spreads and lets me see full capital applied to other trades in February. I think that I can aim for either a break even or a small profit. I need to run some numbers to see how lose I am though.
Jeff.
Seeing as I have access to the typical futures contracts and a condor needs up to $5,000 spare cash ($250 per point with 20 point spreads) I am limited to trades in that neighbourhood normally. I also have access to the E-mini contracts as well which have $50 points. The same 20 point spread will tie up only $1,000. As long as my 6% trade rule holds there is no reason why I cannot use these to "top off" my trading while I am in between $5k increments.
Today I placed an Emini for February EOM to top off my trades.
This little gem of a move will generally increase the profit potential of my entire account as I can now make all of my money and more of my profits work for me sooner.
Figuring that I can place $1000, $2000, $3000 or $4000 trades will serve to top off my profits in the neighbourhood of an additional $1800 assuming an on average trade size of $2500. This is a trade volume of $30,000 over the year at my 6% target for each month.
Nice bonus.
On the outstanding trade front, I am considering closing the put sides of my trades and letting the call side run. The broker deems the call risk so minimal that I can leave those call spreads active to get full profit from that side of the trade. This allows me to use my full capital buying power to open new trades at the new levels. I would like to see them closed today or tomorrow to cut risk and be able to put new trades on to still expire in February. This cuts losses now as well as creates a small compensation with the existing call spreads and lets me see full capital applied to other trades in February. I think that I can aim for either a break even or a small profit. I need to run some numbers to see how lose I am though.
Jeff.
Saturday, January 23, 2010
So much for sitting back.
Well, the market fell off pretty steep in the last two days. My idea of playing a daytrade off the gap would not have worked as, even though there was a gap, it was small. The pre-market basically started where Thursday's post market ended and headed down from there so the gap was only due tot he regular market hours start. The drop and rally were only indicators that it was going to head south, which it did.
But I am not daytrading right now.
My latest condors are giving me some high risk indications as the worst thing that can happen in an iron condor is for the underlying to have a large move right off the bat. Up is not so bad as it is usually coupled with a lowering of the VIX so the put premiums follow a depreciation pattern that makes up for call premiums increase, sort of. in the case of a large drop the VIX jumps, the puts get overly inflated and the calls cannot hope to make up for that loss in premium credit so a larger off the gun drop in profits is in order.
And I had two solid days of large drops putting my positions deep out of the money over all. While this could be a setback it is not catastrophic, just poor timing with me putting so much into the trades. I still hope to have my next cash deposit in in time to place two more February EOM trades, at this point to help make up for a potential loss if I have to close out the current trades. Those trades, due to the higher volatility, will have a wider margin and allow for a greater potential market move. I was attempting to set trades that were favouring a larger profit on the call side but was finding that execution was not going in my favour due to being a the odd trade out...so I stopped. I should have pursued that course longer as it would have been the better option.
I may consider placing call only trades next as well...at least it is worth investigating.
About closing the trades... I would only close the put side of the trade as that is the losing side. Even at that I would only close out the short put first as that is the primary source of the loss. If I feel that the market is still going to head down then I can leave the long put in place and hope to regain some profits as a result while it appreciates. The downside of that plan is that closing the short put only to have the market rally would force me to close the long put as it then starts to become a losing position as well... thus compounding my losses.
I went back and checked to see when we have had a similar patter, two large drops following longish consolidation. In the last 11 months anything remotely similar has bounced back and continued up afterwards. In the 6 months prior to that there were a number of cases that were during the downtrend market move and prior to that there were a large number that were much larger single day moves.
All in all looking back is inconclusive to provide any light on a next move as the market can, and has, done all sorts of variations that are both positive and negative under the current circumstances.
So, sitting back and not watching is not working out like I thought. It is all in the timing. Had I done larger trades prior to this I would be sitting pretty and working soley off of profits rather than having to consider that my closing losing trades might actuall eat into my original capital base.
Here's to a possible rally or further consolidation over the coming weeks.
Jeff.
But I am not daytrading right now.
My latest condors are giving me some high risk indications as the worst thing that can happen in an iron condor is for the underlying to have a large move right off the bat. Up is not so bad as it is usually coupled with a lowering of the VIX so the put premiums follow a depreciation pattern that makes up for call premiums increase, sort of. in the case of a large drop the VIX jumps, the puts get overly inflated and the calls cannot hope to make up for that loss in premium credit so a larger off the gun drop in profits is in order.
And I had two solid days of large drops putting my positions deep out of the money over all. While this could be a setback it is not catastrophic, just poor timing with me putting so much into the trades. I still hope to have my next cash deposit in in time to place two more February EOM trades, at this point to help make up for a potential loss if I have to close out the current trades. Those trades, due to the higher volatility, will have a wider margin and allow for a greater potential market move. I was attempting to set trades that were favouring a larger profit on the call side but was finding that execution was not going in my favour due to being a the odd trade out...so I stopped. I should have pursued that course longer as it would have been the better option.
I may consider placing call only trades next as well...at least it is worth investigating.
About closing the trades... I would only close the put side of the trade as that is the losing side. Even at that I would only close out the short put first as that is the primary source of the loss. If I feel that the market is still going to head down then I can leave the long put in place and hope to regain some profits as a result while it appreciates. The downside of that plan is that closing the short put only to have the market rally would force me to close the long put as it then starts to become a losing position as well... thus compounding my losses.
I went back and checked to see when we have had a similar patter, two large drops following longish consolidation. In the last 11 months anything remotely similar has bounced back and continued up afterwards. In the 6 months prior to that there were a number of cases that were during the downtrend market move and prior to that there were a large number that were much larger single day moves.
All in all looking back is inconclusive to provide any light on a next move as the market can, and has, done all sorts of variations that are both positive and negative under the current circumstances.
So, sitting back and not watching is not working out like I thought. It is all in the timing. Had I done larger trades prior to this I would be sitting pretty and working soley off of profits rather than having to consider that my closing losing trades might actuall eat into my original capital base.
Here's to a possible rally or further consolidation over the coming weeks.
Jeff.
Friday, January 22, 2010
This is what it is all about....
Yep. Today I sit back and don't have to even think about the markets as I have as much capital in play as I can at this point...all in. My targets for the active trades are all over 6% ROR.
Now I will keep an eye on the S&P500 levels but only out of curiosity. Today I expect a sideways day after yesterday's steep drop or even a small rally to re-coupe some of the losses. There was lots of volume to give the down move some credence and even though it could keep going down I expect that it is unlikely. Even if it does I have the bottom side of my trades fairly far down...under 1100 anyway. Worst case I may close out the puts and leave the calls to run...I would add more calls to the mix should I end up doing that though.
So, it probably will open with a small gap down, watch for the gap to close and the rest is up in the air. If I were daytrading SPY I would go long if the gap is an appreciable size.
Having said all that I have had a bearish outlook for the last while and this sort of justifies it. Even so I really don't have a real bias one way or the other as the price will tell all and that can only happen in hindsight anyway. Wide spreads, both sides... best possible setup.
Jeff.
Now I will keep an eye on the S&P500 levels but only out of curiosity. Today I expect a sideways day after yesterday's steep drop or even a small rally to re-coupe some of the losses. There was lots of volume to give the down move some credence and even though it could keep going down I expect that it is unlikely. Even if it does I have the bottom side of my trades fairly far down...under 1100 anyway. Worst case I may close out the puts and leave the calls to run...I would add more calls to the mix should I end up doing that though.
So, it probably will open with a small gap down, watch for the gap to close and the rest is up in the air. If I were daytrading SPY I would go long if the gap is an appreciable size.
Having said all that I have had a bearish outlook for the last while and this sort of justifies it. Even so I really don't have a real bias one way or the other as the price will tell all and that can only happen in hindsight anyway. Wide spreads, both sides... best possible setup.
Jeff.
Thursday, January 21, 2010
All Out to All In
Well, back to all in now. I split my capital into two setups. The first was yesterday's third Friday expiry. I entered today into the EOM and put another small amount onto another trade for the third Friday.
That makes next month's target 6.82% ROR or slightly less ROI as this is all but a small bit of my current balance. I would like to see more trades for the EOM but I don't think that my next cheque will make it there in time to clear for more trades... I'll hold them for March expiry's I guess.
It is relieving to not have to be concerned about getting trades filled now...although the large drop in the market may give thought to other issues as I also have put side trades on all of these trades. We'll see how it shakes down in the coming days. I suspect support around the 1100 level.
At least it does not have to bounce for me to make money, just slow down enough to keep the S&P level from hitting my short put strike level.
Jeff.
That makes next month's target 6.82% ROR or slightly less ROI as this is all but a small bit of my current balance. I would like to see more trades for the EOM but I don't think that my next cheque will make it there in time to clear for more trades... I'll hold them for March expiry's I guess.
It is relieving to not have to be concerned about getting trades filled now...although the large drop in the market may give thought to other issues as I also have put side trades on all of these trades. We'll see how it shakes down in the coming days. I suspect support around the 1100 level.
At least it does not have to bounce for me to make money, just slow down enough to keep the S&P level from hitting my short put strike level.
Jeff.
Friday, January 15, 2010
Day of reckoning.
Today my spreads are close to my short strikes on SPY and BYY but I feel confident that they will hold until EOD and remain 100% profitable... the market will decide. Both are about $1.20 from strikes... not too bad for BYY as it is under $40 but not so good for SPY as it is around $115.
Those trades aside, the reckoning comes down to my thinking about the spread trade cash requirements between Questrade and Strikepoint/Optioneer.
The method and underlying index create a similar, if not quite comparable playing environment. The only issue is the handling of the iron condor as a single trade for the purposes of total exposure as opposed to separate call and put spreads with aggregate exposure. The ease of Strikepoint trading as single orders using software for order entry and spreads that are already mixed compared to doing all my own math at Questrade and position management that is far more hands on might be a consideration. but I LIKE doing all the math, so it doesn't count.
At this point I will be transferring the majority of my cash over to Strikepoint to maximize the trading power in that account and leaving a minimum amount of cash in my Questrade account to use with one of my other plans. I have not decided how much yet, nor have I decided if it will be a straight option trade setup but it will definitely not be spread trading for a while. I expect that I will pickup the Bullish Percent Index charting and go with the BPI triggered sector ETF rotation idea and see how that works in real life as I never got the time to do much more tha play test it in hindsight. Perhaps I will add an S&P500 moderating factor or a currency hedge or maybe tie in the Dow Jones and Russell with some consideration for small, medium and large cap performance...lots to consider.
BYY is heading slowly down but neither made a move off the bell...although SPY opened down and is heading down a bit which is in my favour at least. I should close BYY so it does not go near loss territory but I will ride it until noon and see where it may go.
My other two spreads have gotten very little or no screen time here so I should mention them...that's what happens when they do pretty much what I expect when it comes to spread trades...no news is good news.
XLE (Energy Sector ETF) has remained high and as this is a put spread, remained profitable for me.
APOL, some stock or other, that's bad when I doen't even recall the real name, has done the same. Strangely it is priced simialrly to XLE and has followed very simialr patterns so it must be a large energy related stock... in hindsight I would have been better off putting both positions together into XLE and saved some commissions and the possible risk of having a stock option take a hike due to some company issue that may be unrelated tot he energy market in general.
I'll update my performance page after today closes to be sure I don'e jump the gun by entering my numbers ahead of the close... not that I am terribly superstitious but the market does some weird things often enough.
Jeff.
Those trades aside, the reckoning comes down to my thinking about the spread trade cash requirements between Questrade and Strikepoint/Optioneer.
The method and underlying index create a similar, if not quite comparable playing environment. The only issue is the handling of the iron condor as a single trade for the purposes of total exposure as opposed to separate call and put spreads with aggregate exposure. The ease of Strikepoint trading as single orders using software for order entry and spreads that are already mixed compared to doing all my own math at Questrade and position management that is far more hands on might be a consideration. but I LIKE doing all the math, so it doesn't count.
At this point I will be transferring the majority of my cash over to Strikepoint to maximize the trading power in that account and leaving a minimum amount of cash in my Questrade account to use with one of my other plans. I have not decided how much yet, nor have I decided if it will be a straight option trade setup but it will definitely not be spread trading for a while. I expect that I will pickup the Bullish Percent Index charting and go with the BPI triggered sector ETF rotation idea and see how that works in real life as I never got the time to do much more tha play test it in hindsight. Perhaps I will add an S&P500 moderating factor or a currency hedge or maybe tie in the Dow Jones and Russell with some consideration for small, medium and large cap performance...lots to consider.
BYY is heading slowly down but neither made a move off the bell...although SPY opened down and is heading down a bit which is in my favour at least. I should close BYY so it does not go near loss territory but I will ride it until noon and see where it may go.
My other two spreads have gotten very little or no screen time here so I should mention them...that's what happens when they do pretty much what I expect when it comes to spread trades...no news is good news.
XLE (Energy Sector ETF) has remained high and as this is a put spread, remained profitable for me.
APOL, some stock or other, that's bad when I doen't even recall the real name, has done the same. Strangely it is priced simialrly to XLE and has followed very simialr patterns so it must be a large energy related stock... in hindsight I would have been better off putting both positions together into XLE and saved some commissions and the possible risk of having a stock option take a hike due to some company issue that may be unrelated tot he energy market in general.
I'll update my performance page after today closes to be sure I don'e jump the gun by entering my numbers ahead of the close... not that I am terribly superstitious but the market does some weird things often enough.
Jeff.
Tuesday, January 12, 2010
Close or hold the trades?
Friday is expiration day for this month and I have two spread trades that are getting close tot he strike prices. SPY, which is now back to $2 down... I feel pretty good about that one now compared to where I was with it on the weekend.
The other is BBY. This one was placed as a put spread under the suggested support levels around $39... I am at $38 with my short puts and the price has been fairly deep into the $38 level today.
The question is do I close one or both of these trades now while I can break even or make a bit of money for my trouble or just let them ride and close only if they get closer?
Here is where the Theta comes into play. Today Theta is at 0.051, 5.1 cents per day loss. Every day that I wait and the price does not move too much against me puts the profits up by 5.1 cents.
SPY short 116 calls would cost me 15 cents to buy back and they made 25 cents initially. Long calls are worth 2 cents from my 8 cents purchase...not even worth looking at now except I have 19 contracts ($38 worth). Total profit to close now of about $50 net. Holding through expiry at SPY under $116 is close to $260.
BBY is in a similar state but with a much smaller position of 3 contracts. Either way if I close the trades the commissions will cost me profits whereas letting them expire costs me no extra...as long as they are OTM.
Then there is the issue of Friday and expiry day volatility. I have seen large runups and drawdowns at the day's end as everyone scrambles to take advantage of the EOD mayhem...specifically the black box trading driving the volume up.
My gut tells me to sit on these trades while my mind tells me to close them for breakeven.
I'm going with the gut and just keeping my broker's numbers handy in case I need to close quickly.
Jeff.
The other is BBY. This one was placed as a put spread under the suggested support levels around $39... I am at $38 with my short puts and the price has been fairly deep into the $38 level today.
The question is do I close one or both of these trades now while I can break even or make a bit of money for my trouble or just let them ride and close only if they get closer?
Here is where the Theta comes into play. Today Theta is at 0.051, 5.1 cents per day loss. Every day that I wait and the price does not move too much against me puts the profits up by 5.1 cents.
SPY short 116 calls would cost me 15 cents to buy back and they made 25 cents initially. Long calls are worth 2 cents from my 8 cents purchase...not even worth looking at now except I have 19 contracts ($38 worth). Total profit to close now of about $50 net. Holding through expiry at SPY under $116 is close to $260.
BBY is in a similar state but with a much smaller position of 3 contracts. Either way if I close the trades the commissions will cost me profits whereas letting them expire costs me no extra...as long as they are OTM.
Then there is the issue of Friday and expiry day volatility. I have seen large runups and drawdowns at the day's end as everyone scrambles to take advantage of the EOD mayhem...specifically the black box trading driving the volume up.
My gut tells me to sit on these trades while my mind tells me to close them for breakeven.
I'm going with the gut and just keeping my broker's numbers handy in case I need to close quickly.
Jeff.
Monday, January 11, 2010
Rambling on SPY spreads
Theta on my short SPY leg is up to $0.084 now, nice. I am not really concerned about that as long as the SPY closes under $116 on Friday it makes no difference. Seeing as it is hovering about $115 right now I am running it VERY close as the 10 day ATR is just over $1. In theory, I should be OK. The ATR is narrowing over successive timeframes, the five day (last week basically) is just under $1.
I don't think there are any stock affecting reports to come out today either, unless some get a headstart on earnings and they are good for Q4 last year. A gap up today should also fill at least...that will give me a little headspace.
I am not liking being this close so I will adjust my trade entry plan accordingly. Part of the issue is that the volatility is so darned low the premiums reflect this by not leaving enough value in the farther OTM strikes right now. Rather than trade tight I would be better to hold cash and wait for the cherry pinking setups.
I consider looking at stocks again but I don't like the uncertain variability in the pricing and larger possibility for gaps based on news that can really affect the stock more than an overall index. This, of course, is why they sometimes have better premiums though. Perhaps some smaller $1 spreads might be appropriate AFTER I get the SPY spreads working.
Back to the futures. There at least I can get a higher (and lower for puts) strike to work with even down to the 30 day trades. I will give this plan until the end of the February expiry to see how I feel about these first.... or at least see if the VIX picks up how much room I get in my trades.
I don't think there are any stock affecting reports to come out today either, unless some get a headstart on earnings and they are good for Q4 last year. A gap up today should also fill at least...that will give me a little headspace.
I am not liking being this close so I will adjust my trade entry plan accordingly. Part of the issue is that the volatility is so darned low the premiums reflect this by not leaving enough value in the farther OTM strikes right now. Rather than trade tight I would be better to hold cash and wait for the cherry pinking setups.
I consider looking at stocks again but I don't like the uncertain variability in the pricing and larger possibility for gaps based on news that can really affect the stock more than an overall index. This, of course, is why they sometimes have better premiums though. Perhaps some smaller $1 spreads might be appropriate AFTER I get the SPY spreads working.
Back to the futures. There at least I can get a higher (and lower for puts) strike to work with even down to the 30 day trades. I will give this plan until the end of the February expiry to see how I feel about these first.... or at least see if the VIX picks up how much room I get in my trades.
Friday, January 8, 2010
The SPY Bear Call Spread
I find it interesting to watch the dance that my spread trade is doing while the market tries to figure out where it is going next.
I am at 116-118 and right now SPY is hovering just over $114. That only leaves me a $2 margin before I start losing profits at $116 and start losing money at $116.16.
Each morning the Theta number gets updated and the quotes are lowered by roughly the previous day's Theta. Right now it is about 0.045 so each day the short 116 call loses 4.5 cents per day, which equates to me making 4.5 cents per day. The market inches up and the option regains that loss...like I said before, the I need the Theta to outstrip the Delta. Even better is to just have SPY close on next Friday anywhere under $116.
The short option was worth an average of 25 cents. It is now trading at 27-28 cents and has been for the last few days even while SPY has climbed. Delta fighting Theta.
This leads me to consider using some sort of formula to calculate the risk factor associated with a particular spread trade using the Delta and Theta variables. More math but perhaps it can be of some help. I figure that most of this is already in when looking at the Average True Range and forecasting the future possibilities based on the time to expiry already...maybe it would be redundant... but maybe not.
Jeff.
I am at 116-118 and right now SPY is hovering just over $114. That only leaves me a $2 margin before I start losing profits at $116 and start losing money at $116.16.
Each morning the Theta number gets updated and the quotes are lowered by roughly the previous day's Theta. Right now it is about 0.045 so each day the short 116 call loses 4.5 cents per day, which equates to me making 4.5 cents per day. The market inches up and the option regains that loss...like I said before, the I need the Theta to outstrip the Delta. Even better is to just have SPY close on next Friday anywhere under $116.
The short option was worth an average of 25 cents. It is now trading at 27-28 cents and has been for the last few days even while SPY has climbed. Delta fighting Theta.
This leads me to consider using some sort of formula to calculate the risk factor associated with a particular spread trade using the Delta and Theta variables. More math but perhaps it can be of some help. I figure that most of this is already in when looking at the Average True Range and forecasting the future possibilities based on the time to expiry already...maybe it would be redundant... but maybe not.
Jeff.
Monday, December 21, 2009
Optioneer / Strikepoint Trade Expiry
I forgot to mention that I had my first Optioneer / Strikepoint trade expire on Friday past. I could have closed it a day or two early and still made the full target but decided to just let it expire.
ROR = 8.62%
Annualized = 98.38%
ROI for the entire account even considering my latest deposit is 18.5% annualized... that is one trade of the five trade capability. 5 trades x 18.5% = 92.5% without factoring in compounding. Every 13 trades I can add one more, roughly.
Just spinning the numbers.
Jeff.
ROR = 8.62%
Annualized = 98.38%
ROI for the entire account even considering my latest deposit is 18.5% annualized... that is one trade of the five trade capability. 5 trades x 18.5% = 92.5% without factoring in compounding. Every 13 trades I can add one more, roughly.
Just spinning the numbers.
Jeff.
Closing more long calls and the going forward TFSA plan
I closed another long call today for somewhere near a 110% gain. I took it out based on an early morning surge in the underlying price that seemed to peak. I had decided to take any 100% gains this week and close others on strength if they were profitable as the week progressed. So this is a little bonus...particularly after Friday's expiration as four positions closed for 100% losses.
Overall, I am 22 winners out of 36 losers which is not a bad win rate, 61%, and I am still profitable. It just is not good enough to continue paying for a service for that kind of rate. Particularly as I will have more 100% losers come January expiration I expect. My overall rate of return is between 12 and 13% and that is for a period of about 3 months.
The trouble with the win rate is that a loser is likely to be a 100% loser which means a winner must always be a 100% gainer, and they are not all that at all.
I will be removing any extra cash from my TFSA this week as it will free up TFSA contribution room for next year. If I wait until January it will not. This allows me to add to my spread trading account which I would rather be working for a far more secure return without relying on any services to provide entry and exit guidance.
The grand plan is to run a sector rotation style trade setup out of the TFSA using ETFs for long and inverse ETFs for short plays against the respective sectors. While I am saving some cash for this I will likely run a live paper trading model to see how it works in "close to real life". I will look at switching back to Canadian ETFs in order to lower my trading costs in the account, even though I know I cannot set stop loss orders... I may find that access to the same information is not readily available for what I am looking for though and the TSX makes poor proxy for NYSE indices and securities.
Jeff.
Overall, I am 22 winners out of 36 losers which is not a bad win rate, 61%, and I am still profitable. It just is not good enough to continue paying for a service for that kind of rate. Particularly as I will have more 100% losers come January expiration I expect. My overall rate of return is between 12 and 13% and that is for a period of about 3 months.
The trouble with the win rate is that a loser is likely to be a 100% loser which means a winner must always be a 100% gainer, and they are not all that at all.
I will be removing any extra cash from my TFSA this week as it will free up TFSA contribution room for next year. If I wait until January it will not. This allows me to add to my spread trading account which I would rather be working for a far more secure return without relying on any services to provide entry and exit guidance.
The grand plan is to run a sector rotation style trade setup out of the TFSA using ETFs for long and inverse ETFs for short plays against the respective sectors. While I am saving some cash for this I will likely run a live paper trading model to see how it works in "close to real life". I will look at switching back to Canadian ETFs in order to lower my trading costs in the account, even though I know I cannot set stop loss orders... I may find that access to the same information is not readily available for what I am looking for though and the TSX makes poor proxy for NYSE indices and securities.
Jeff.
Wednesday, December 16, 2009
Quiet day
Today was a quiet day for trading for me. Having one account entirely committed is good and saves farting about with some of the complications involved in the discount brokerage positions...although I did take some small profits on a long position this afternoon.I decided t start closing out some of these on relative strength, the shorter expiry options anyway. I am disappointed in the overall performance of the option advisory service that I stuck with lately, the one I decided to drop.
I started looking at the older trades that these fellows setup to see if trading spreads would have been a better strategy to use. Being that I cannot sell options in the TFSA or RRSP account I was tied to covered calls only or long option positions... that ties my hands more than I realized while trying to use someone else's plan. When they were creating credit trades by buying long calls and selling naked puts for profit I could only buy the calls... without the credit of the puts I was hobbled off the bat and many trades are expiring or being closed with a 5 cent profit...with the naked put. That puts me in the red more often than not in those cases.
I am now investigating the possibility of having had placed spread trades on the same securities at the same times as their recommendations. Rather than getting fancy I will be using current option chains to see if there is enough yield now and extrapolate that into past performance. It is rough but as long as the stock price remained ahead of the strike for the duration of the trade to inside month expiry and I apply the $10 per day per $5000 (0.2% daily ROR) I can get a sense of the value of perhaps continuing the service going forward.
In cases where a solo naked put was recommended I might just place a bull put credit spread. Other times when the put was sold to cover the cost of the long call I might trade a bull put credit spread in a large enough ratio to pay for the long call up to a maximum risk level. The odd time a spread that I can trade comes up or an iron condor. I think I may find that 1/3 to 1/2 may have been workable as many do not have great chains with depth.
Looking at some of the trades that they took it looks like this may have been a promising venture... only I am starting late. I'll think on this over the weekend and see what I come up with.
I have an Optioneer trade expiring Friday, nice to see the spreads expiring, another on the 30th with them and two SPY spreads as well.
I started looking at the older trades that these fellows setup to see if trading spreads would have been a better strategy to use. Being that I cannot sell options in the TFSA or RRSP account I was tied to covered calls only or long option positions... that ties my hands more than I realized while trying to use someone else's plan. When they were creating credit trades by buying long calls and selling naked puts for profit I could only buy the calls... without the credit of the puts I was hobbled off the bat and many trades are expiring or being closed with a 5 cent profit...with the naked put. That puts me in the red more often than not in those cases.
I am now investigating the possibility of having had placed spread trades on the same securities at the same times as their recommendations. Rather than getting fancy I will be using current option chains to see if there is enough yield now and extrapolate that into past performance. It is rough but as long as the stock price remained ahead of the strike for the duration of the trade to inside month expiry and I apply the $10 per day per $5000 (0.2% daily ROR) I can get a sense of the value of perhaps continuing the service going forward.
In cases where a solo naked put was recommended I might just place a bull put credit spread. Other times when the put was sold to cover the cost of the long call I might trade a bull put credit spread in a large enough ratio to pay for the long call up to a maximum risk level. The odd time a spread that I can trade comes up or an iron condor. I think I may find that 1/3 to 1/2 may have been workable as many do not have great chains with depth.
Looking at some of the trades that they took it looks like this may have been a promising venture... only I am starting late. I'll think on this over the weekend and see what I come up with.
I have an Optioneer trade expiring Friday, nice to see the spreads expiring, another on the 30th with them and two SPY spreads as well.
Jeff.
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