Friday, November 27, 2009

Today's Trades

AZO
Dec 140/160 short strangle for $2.50 credit. Taking advantage of the spike in the VIX to get a juicy premium.
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3 comments:

  1. ChrisNovember 29, 2009 at 8:54 PM

    Hey Justin!

    I'm back from my extended vacation and watching your trading again! How have your trades been going?

    -Biffermas

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  2. JustinNovember 30, 2009 at 7:35 PM

    Hey Chris! Man, I seem to be doing everything wrong! I'm slowly watching my account balance dwindle as I get into these trades and get scared right back out as soon as it goes against me, even slightly. I think I was doing better when I didn't have the time to check the market during the day.

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  3. ChrisDecember 1, 2009 at 11:00 PM

    Keep in mind any advice I offer was learned the hard way specifically fighting my own demons. You might not have these same demons, so take it in stride.

    Since you trade options... the fear you exhibit seems to mimic my own experience using excessive option leverage. Any small, normal range movement would potentially mean pretty large losses, and I couldn't think clearly or rationally about my position. Rational stops under this scenario mean huge losses that are hard to recover from without "doubling down".

    I also didn't perform well watching every tick, but I couldn't stay away from this trap when the stress of losses hit a high point. If you're waking up earlier than normal it's likely because of painful leverage.

    It's tempting to try to make the maximum amount possible, but I've only met one person with the iron stomach to trade highly leveraged option positions. I think he'll crater at some point.

    I'm assuming much, and I apologize if I missed the mark. Options were not made for me, unless I'm selling short-term covered calls.

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