Rolling just about everything. As I mentioned will not list all my ongoing trades, just list new ones going forward or ones that were listed before I had to drop out.
Tried a directional trade on /ES at the open, lost $700 when my stop was hit.
XBI 82.5 put rolled down to 80 for 9/6 for 0.26 credit. Cb 79.74 if assigned
EOG 85/83.5 #fuzzy rolled out to 9/13 for 0.45 credit. Cb 17.89
LABU 41 puts rolled down to 38 and 9/13 for 0.5, 0.45, 0.55 credits. cb ranges from 37.45-37.55
GILD 65/65 #fuzzy (some of these were on before March injury) rolled for 0.51 credit. Cost basis now 0.53, 3.20, 6.72, and 2.52. A few will be 100% returns and free trades in just a few more rolls.
TQQQ 62.5 rolled down to 60 for 9/13 for 0.67 credit. Cb 59.33
Hope everyone is doing well. I suspect there will be some more rolls before my trades break even or make money.
SQ 8/23 65 puts closed for 3.95 or 2.72 loss per contract. I was going to convert to a #jadelizard but do not have time and also took the loss to avoid margin issues so I can stay in my other trades.
First losing trade on SQ this year.
Lots of other trades/puts are ITM but they still have good theta decay so will adjust those tomorrow.
Had a few extra minutes for lunch so:
LNG 67.5/67.5 #fuzzy rolled down to 60 for 1.55 debit and cb of 9.30.
EOG 87.5/87.5 #fuzzy expiring this week rolled down to 75/75 for next week for 3.16 debit. Cb now 18.34
That dead cat bounce did not stay in the air long. I will be adjusting trades to neutral to bearish stance or at least to trades that won’t get killed with whipsaws.
Have a lot of trades ITM that expire this week and next week.
Converted short puts that are way ITM to #fuzzy to the 65/65/61 put strikes. Cost basis 9.39 and 8.96 and will sell weeklies until 2021.
Only had 2 contracts but this allowed me to increase to 7 contracts so a lot more weekly selling power/income.
We ran an experiment with XBI from June 21 on strictly weekly sales at the 80/85 strikes. 60% ROI since then or 520% annualized returns which is a lot more than we expected. Will keep it running and see how it works out longer term. I would expect less going forward but interesting that certain tickers trade LEAPs better than others.
Sorry about the radio silence for a few months. After my injury and recovery I have been too busy at work to post. Does not mean I have not been trading, just did not have time to post. I am finally caught up to the point I can contribute again.
So anyway, hope everyone is doing well. I sorted out how to separate my personal trades from the service and will start posting again. Most trades will be posted end of day but they are usually good for a few days. I also have too many on for update so will just start fresh and post as we go. I mostly trade on Thursdays so that is when updates should occur.
As some of you know I traded full time for 5 weeks as I was recovering. I am also part of the Traders Reserve family and have been working with them professionally. While I was off I binged watched tastytrade, looked at all of the research we have been doing, and experimented with several new tactics that have all been very successful. I will try to keep this short but some of the things I have learned have changed my trading techniques.
So here we go as a summary. Took the case study account from 50k to $75,983 from Jan 1 to June 30. It was more than that but this weeks pull back dropped it a few thousand. Regardless, a 50% increase in 6 months is not too shabby. This included some losing trades, I am not cherry picking here and will attach a screen shot to show this is legit and you can see I am up another 10k from June 30.
So here is what I have and have become very mechanical in my trading. Some people may think it is boring but I trade to make money, not for excitement. If I want excitement will go ski, kiteboard, bike race, or mt bike and hopefully not break any bones again.
- Selling options works. The only thing is have to be able to control those big losses that can occur from selling naked options. If you control that you win in the long run.
- I am not a directional trader. Congratulations to those that can do it, but even full time trading I could not make it work. However, adding a directional component to option selling has increased my win/loss ratio which improves returns.
- Keeping a portfolio hedge on at all times allows you to be much more aggressive selling options. That way if SPY goes to zero the hedges will be worth way more than the accounts. I target hedging each account for a 10% correction meaning that much of a drop will result in no losses. Any more than that and I have a winning lottery ticket. I will explain next time I roll my hedges but have been using /ES. SPX or SPY also work. I also hedge using a risk twist or ratio write so it does not cost as much or a debit spread if I am hedging a fixed amount.
- I finance the hedges by selling options so they only cost me house money.
- I usually start a position by selling puts. If it moves against me will roll. If that does not work will convert to a #jadelizard. After a few rolls of the jade lizard if that does not work will convert to a LEAP spread and manage it from there.
- A position may last a week or several months to years. Depends on what I am trying to accomplish but the end goal is steady income.
- TT found 45 DTE opening to managing at 50% returns or 21 DTE closing is ideal for theta decay. We have found 21 DTE may be even better (not in all situations). Our research has found that most OTM options will crush 90% in 10 days after opening at 21-22 DTE. Allows recycling capital quicker, faster decay, but less trades have to be adjusted. Has been the sweet spot this year. As market conditions change that may change as well.
- Jade lizard trades allow skewing, flexibility with adjusting, and huge income up front.
- Trading through market volatility increases returns once the market rebounds because you are always recycling your cash and adding to positions and basically hyper compounding.
- Keep margin balance to no more than 25-50% of total available that way you don’t get margin calls when the market is melting down.
- Don’t be emotional when trading (hard to do when your account is down) but must be done. Most people sell at the absolute bottom or buy at the top because of emotions. If they just stayed in the market they would be better off. It is only money, not your life, or face 🙂
- Be willing to adapt to what the market is doing. Too many people trade the same way no matter what the market is doing. Different tactics work in different markets but you have to trade the market you are in.
This community helped me realize a lot of this. Most of you are willing to take a chance, experiment with new tactics, and stay in the market even when the proverbial sh#$ hits the fan. Thanks for the help and happy to be back!
Took me a while to figure out how to post a screen shot, but here are the returns for the year so far.
Had not looked at the market until after lunch, that’s what a true short squeeze looks like 🙂
About time we had a green day
#optionsexpiration and actually these are for next week, I rolled everything today.
Sorry I have not had time to post for anyone that was following trades. I will do a better job of at least a weekly update. That is how I trade. 95% of my trades are on Thurs. so a weekly update should keep things up to date.
Lots of trading last few weeks but equity curve flat. Need the trade tariff BS to end. Not good for business 😦
Most of my trades have been converted to #fuzzy or #lizardpies for recovery.
/ES 62 DTE 2610/2605 back ratio has made a few $. It’s real purpose is to guard against a 2/6/18 or 8/24/15 event. Hope I don’t need it but would get a lot of cash then. However like an insurance policy I expect to lose on this.
LABU 45 cc at 44.25 cb and 40 cc at 37.13 and another batch of 40 cc at 38.42
TNA 60 cc at 59.69
TQQQ 63 cc at 62.15
AMAT 22 DTE 42 CC at 41.04. Assigned off a 43 put but had some credits as a cushion
EOG 92.5/90 rolled down to 87.5/87.5 for a little debit. Cost basis 15.44 but because I had made some on the longs it put some cash back in the account.
GILD 65/65 rolled next week for 0.29 credit. Cost basis 5.91. Should not be too much longer for a free trade.
LNG 67.5/67.5 rolled for 0.34 credit. Cost basis 9.99 down from 15.57 at onset only 4 weeks ago.
XBI 80/80/85 rolled for 0.70 and cb 5.57
XBI 80/85 cb 12.50. This is a new batch we are doing live as an experiment. Avg. about 4% cost reduction per week. With monthlies it is larger about 6-8% but the theta decay is slower. 6% per month is 96% per year.
GILD 65/65 rolled for 0.28 for cb of 3.78. Freebie soon I hope 🙂 but this is also an experiment that will be taken all the way to expiration in 2021.
GILD 65/65 rolled for 0.28 at 6.45. Same as above but this is tracking the compounded addition of contracts as the rolls spit off cash.
IBB 103.5 rolled down to 102/102/102.5 for total credit of 0.84. This has been recovered all the way from 107/109 strikes. Shows the flexibility of the #jadelizard as a tactic for adjustments.
IWM rolled down from 150 to 149/149/149.5. Reduced debit from 2.11 to 1.63 as I have recovered this from 155/157 strikes. I gave back a little credit to reduce margin.
SQ 63.5/63.5/64 rolled for total credit of 2.19. Looks like it found a bottom.
XBI 81.5 rolled down to 81/81/81.5 for total credit of 2.35.
LNG 64/64/64.5 rolled down from 66 for 1.68 total credit.
Once I can close a few of these, hopefully next week, will start some 21 DTE #lizardpies and create ladders. Some of them will be skewed to downside to just have steady income with every expiration and let them expire each week. Add new ones every Monday or Thurs.
Stay nimble, I suspect there is more volatility ahead but take advantage of the increased premiums 🙂
Here is an example of a 22 DTE #lizardpies I am looking at.
7 points of downside protection. No risk to upside. Income over 3 weeks, can probably close early for 50% or more profit.