All Available Options

Keep in mind any advice I offer was learned the ha...

2009-12-01T23:00:28.582-05:00

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.

Hey Chris! Man, I seem to be doing everything wron...

2009-11-30T19:35:13.535-05:00

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.

Hey Justin! I'm back from my extended vacatio...

2009-11-29T20:54:40.600-05:00

Hey Justin!

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

-Biffermas

FAZ now at $5.60 as of Friday's close. SRS act...

2009-10-31T12:25:21.523-04:00

FAZ now at $5.60 as of Friday's close. SRS acting funny in the last hour, I may look for another inverse etf on real estate.

Finally!

2009-10-31T07:36:04.178-04:00

Finally!

nice Justin! I'm so glad you got this one!

2009-10-30T16:35:58.418-04:00

nice Justin!
I'm so glad you got this one!

Closed out this morning for a 23% gain.

2009-10-29T19:58:49.466-04:00

Closed out this morning for a 23% gain.

I see you bought your Short Strangles out a few mo...

2009-10-23T20:04:16.331-04:00

I see you bought your Short Strangles out a few months. why do you do that as opposed to selling the front month options with faster time decay?

I sold CAT Nov 65/50 SS. Still holding it. IV really fell on this one. Behaved nicely

I sold two AMZN Nov 105/80 SS.
WOW- I hedged it by buying stock after hours as it shot up. Had 90 shares of stock and felt good, got up late today and it had gone from 107 to 114 alreadt and I was behind the eight ball. So started hedging again. Now with 170 shares long I'm delta neutral and can wait until things settle down. Would like to buy back NOV 105 and sell DEC 125 or 130, but want some kind of indication of some slowing or resting from this and insane upward movement.

Your DEC 115 calls were safer but are in the money already, so what are you going to do? Where do you think AMZN goes from here in the next week?

So it looks like I'll be picking shrapnel out ...

2009-10-23T18:14:25.903-04:00

So it looks like I'll be picking shrapnel out of my face for a few days on this one. I sold a 75/115 SS Monday morning for $2.15, and was actually up almost 20% as of close yesterday, due to the IV dropping a couple days prior to earnings. I considered taking profits and closing yesterday, but NOOOOO, I had to get greedy and stay in. Bought it back this morning for $5.27. OUCH!

So this one kicked my a$% after it took off, got o...

2009-09-16T17:59:22.071-04:00

So this one kicked my a$% after it took off, got out at an ugly loss.

Closed it out at a loss of 34 cents.

2009-08-12T09:52:06.577-04:00

Closed it out at a loss of 34 cents.

Looks like this one fell flat on its face. I'l...

2009-08-11T21:49:54.621-04:00

Looks like this one fell flat on its face. I'll hold one more day to see if I can get any move.

GMCR reported AMC today, stock is down over 5 poin...

2009-07-29T19:45:02.196-04:00

GMCR reported AMC today, stock is down over 5 points after-hours. Still well within my 55/80 condor strikes so the IV crush should do it's thing.

2009-07-28T10:09:40.690-04:00

This comment has been removed by the author.

Got right back out, I'll stick to my short cre...

2009-07-27T18:15:16.413-04:00

Got right back out, I'll stick to my short credits for now.

And the VIX is down to September '08 levels.

2009-07-23T16:12:55.155-04:00

And the VIX is down to September '08 levels.

2009-07-23T14:50:45.275-04:00

This comment has been removed by the author.

Pay attention, you big dummy! They report AMC toda...

2009-07-23T14:36:08.417-04:00

Pay attention, you big dummy! They report AMC today, so I got back out at a loss, it was heading up already.

Down to $1.10 already this morning, that's the...

2009-07-23T10:56:16.516-04:00

Down to $1.10 already this morning, that's the IV crush I'm looking for!

Bought back the 70 call just now for $.95, for a p...

2009-07-22T15:06:33.213-04:00

Bought back the 70 call just now for $.95, for a profit of $.97. We'll see what the put does over the next couple days.

Tough break on CSX.....that model will behave that...

2009-07-21T20:47:49.931-04:00

Tough break on CSX.....that model will behave that way at times. Develop a delta rule and stick to it....just my humble advice.

I love the blog!

Tim

I will do my best to post my new trades here as I ...

2009-07-21T20:39:11.723-04:00

I will do my best to post my new trades here as I make them. Here is a brief synopsis of my closed-out trades since April, and the profit/loss on each:
(L/S)
(S)XLE May 40P, +.87
(S)OIH May 70P, +.66
(S)OXY Jun 45P, +.85
(S)JEC Jun 30P, +.54
(L)SQNM May 5C, -.75
(S)PNRA May 50P, +.30
(S)BBBB Jun 25P, +.55
(S)BBBB Jul 25P, +.58
(S)OIH Jun 80P, +.55
(S)AZO Jun 145P, +1.8
(S)PLCE Jun 30P, -.40
(S)AMSC Jul 20P, +.35
(S)VRSN Jul 17.5P, +.48
(S)XME Jul 32P, +.05
(S)AZO Jul 145P, +1.3
(S)GS Aug 130P, +1.34
(S)FDO Aug 25/30 strangle, -.44
(S)CSX Aug 27/35 strangle, -3.63(yes, it's true)

Trades I'm currently in, and the credit received:
(S)WAG Aug 27P, $.60
(IC)WMT Aug (S)47.5/50, (L)42.5/55, $1.66
(S)JEC Jul 35P, $.25
(S)DIN Aug 25/40 strangle, $1.3
(S)WHR Dec 35/70 strangle, $3.05
(S)AZO Aug 140P, $.85

As you can see from the first list, I had a bunch of modest credits that got nearly wiped out by a big loss in one of my first short strangles. CSX gapped up the day after earnings so I legged out of the put for a .50 gain, then I figured I'd hold out for a couple days until it filled the gap. Well, the meteoric rally last week cleaned my clock, and I stayed in way too long, expecting a pullback that has yet to materialize. I got out of the call this morning at a $4.13 loss.

Sorry, I haven't been on here in quite some ti...

2009-07-21T19:43:24.731-04:00

Sorry, I haven't been on here in quite some time, I need to make a point to post my trades here for myself as well as others who are interested.
I've been going naked and short pretty much 100% for the last several months, I'm really getting into being theta positive. We all know the market makers are out to pick our pockets as often as possible, so why not put as many factors in our favor as possible? Time is the first factor we can get on our side. Time decay alone is our single greatest ally when selling options, since it can't move against us and can't be controlled by the market makers. The next factor the market makers can't control is implied volatility, which is really a measure of market sentiment or bias. Historically, volatility ramps up as earnings season approaches and falls after earnings are reported. We can easily use this common behavior to our advantage, since the higher the volatility, the bigger the option premium.
I have been putting on naked puts and short strangles exclusively, and slowly building my account back up after some bad decisions early on. It's such a temptation to go "all in" long calls and puts and hope for that huge move that will triple our account, but I've learned the hard way that I'd be better off in a casino, since I would at least be getting some "free" drinks while I lose my shirt.

How did it go on these trades?

2009-05-26T14:19:41.580-04:00

How did it go on these trades?

So the bounce wasn't as great as I anticipated, st...

2009-03-16T06:04:00.000-04:00

So the bounce wasn't as great as I anticipated, still holding all but GERN, got out of that one break-even.