Oil futures have weeklies :)

Taking advantage after the drop.

STO the /CL next week 45.5/55 strangle for 0.23. Plan to close or roll by Monday or Tuesday. The theta decays is huge 285 a day on 5 contracts.

Have not had time to post but this is good news, too good not to share.

Working on dispersion trading. Income trading plus directional kicks when opportunity is there.

Will update after the live trading session at the end of the month.

Hope everyone is doing/trading well.

#spycraft The low volume march…

#spycraft

The low volume march to infinity has triggered my adjustment level so I closed the CCS side of the 12/13 318/322 for a 0.83 loss. I am hoping for a pull back on Monday when people return but hoping has never made me any money.

Left the put side open, will close when it is down to 0.05 then loss will only be 0.20.

Following the new rules I opened the PCS side for 12/20 at the 304/301 strikes for 0.24 credit. Will stay one sided until there is a definitive change/reversal.

A rapid flush down I would back ratio.

Happy Thanksgiving Bistro’ers!

#spycraft v 6.1 12/13 291/295…

#spycraft v 6.1 12/13 291/295 and 318/322 IC

Have not added any the last 2 weeks. I am trying a full cycle before adding additional spreads. But what I have so far has proven what almost always happens with these. They are challenged in 1 direction only, in this case the upside. I have a profit but negligible ($49 on a 5 lot vs. 315 at expiration). The short strike is 318 for the 12/13 expiration.

So this is the decision point. Do I close the short calls and leave the puts open? Do I back ratio? Do I butterfly and cap losses to the upside? Or do I just sit on my hands and see if we eventually stay in the range and close for near full profit.

Here is my thought process. We can certainly keep grinding higher but if I back ratio and it stalls or reverses I basically lock in a loss at that point. If I close I lose on the calls but still have the puts making a few extra $. If I butterfly same as the back ratio, basically lock in a loss to one side.

So since I have not breached the short strike I will let it sit and decay and hope for flat or a little pull back. Then might be able to close early for a small profit.

But additional rules to putting these on, I will start them only one sided, then add the other side only at a definitive reversal. In the indexes the credit is generally higher on the put side and father OTM as well. That is something that has been persistent since 1987 black Monday (or was it Friday?). So there is more room and time to adjust to the put side anyway. Plus the market goes down faster than up so at that point a back ratio would make sense and likely give you a nice directional pop to the account.

Also will probably be going shorter time frame, looks like 10-21 DTE may be ideal as opposed to 28-45 DTE. I know the TT research shows 45 DTE ideal and it seems to be for naked options. But with spreads the decay is soooooooo slow it gives the market too much time to move.

Will update if I do anything or if it expires. Then will try the ladder one sided and will post as I open/close.

Anyone else has any ideas feel free to share? I know these can work, the math and probabilities are there, just need to avoid the big losses or convert losing trades to winners or flat.

FOMO, irrational exuberance, when are…

FOMO, irrational exuberance, when are people going to learn buy low sell high or short high and buy low. Everyone piling in when the market is more expensive than it has ever been………

Bloomberg had something on the other day that said the smart money is already positioning for a pull back for what it is worth. But I am not going short until it is established.

Whats the famous quote, the market can be irrational longer than I can be solvent 🙂

/ES/SPX/SPY #hedge Closed out the…

/ES/SPX/SPY #hedge

Closed out the /ES 2690/2700 back ratio for 300 or a $3025 loss. Just means the market did not crash.

So I have been trying to figure out a cheaper way to do these but still get the 10% coverage for a 10% down move. I came up with a modified risk twist/unbalanced butterfly. Cost about half as much as the back ratio.

BTO the Mar 2020 /ES 2790/2780/2770 butterfly. Ratio is one 2790 sold, bought three 2780 and sold one 2770 for $1690. About half the cost of the back ratio. Still good coverage and could always tweak the ratio if the market really starts to move. So this will only cost about $6800 per year instead of 12k but the deductible stays about the same.

Here is the graph and just put his on 10 minutes ago so can probably do the same. For every 100k in the account I would do 1.

2017-12-01-TOS_CHARTS

EXPE earnings disaster

Rolled the 125 #jadelizard converted to a #fuzzy down to 95/95 strikes. Short option 15 DTE. When all cleared my cost basis is now 37.33. Need about 0.33 per week to break even and have until Jan 2022 to do it.

I am done with earnings. Too random and binary. 6 out of 9 of my earnings trades this year imploded even with some limited risk positions.

This one trade reduced my yearly profits by about 20% for the year even being only a 7% position in my portfolio.

Black swans are more common than the options price for.

#spycraft Added the Dec 13…

#spycraft

Added the Dec 13 put side since we are just chopping for now. Now that I put the trade on watch the market move.

STO 296/292 CCS for 0.29. 5 contracts completing the IC with the calls at 318/322. 0.63 credit total.

#spycraft Starter position this morning….

#spycraft

Starter position this morning.
STO the Dec 13 318/322 CCS for 0.34 when the market opened lower.
You could do better now or move up a strike. At the time the short was at delta 15-16.
5 contracts so max risk around $1700 with commissions.

Will wait on adding put spread until a bigger pull back.

Plan is to add new positions each week and manage at 21 DTE or 50% profits, or big movement to the short strike whichever occurs first. If the short delta hits 30-32 would modify.

#spycraft Version 6.1 or so….

#spycraft

Version 6.1 or so.

Trying these again with a small account. Starting value around 6k. They work, the issue is controlling the 1 or 2 out of 10 that go against you and wipe out the gains on the other 8-9.

Here are the mechanics.
Start 28-45 DTE. Sell the 16 delta puts or calls then buy options 3-5 strikes outside that. Manage at 21 DTE or 50% profit, whichever is first.
Set up as ladder so add new positions each Thursday or Friday. As they are managed, roll or close.
Adjustments: back ratio works if you catch it early. The problem is it usually reverses then you lose some on the spread and the back ratio. But if you are going to back ratio I would do it when the delta of the short option doubled to 32.
Other options are convert to butterfly when it hits the short strike. You will still lose but will be much less and if you happen to get a pin then could make some money.
Final option is convert it to a diagonal or calendar. This depends on your outlook for the time the short option is in play.

Will also leg into iron condors depending on overall direction.

Nothing more complex than that.
Plan to start in 2 weeks when my current XBI puts expire in this account. Will post results monthly or so but will post the weekly trades as I open them.

Earnings blow up EXPE

Did not take my own advice, tried another earnings trade and now losing 6 out of 9. EXPE missed earnings by 0.60 and down over night by 17. Opened this morning down 31 or 22%. Had a #jadelizard at 125/144/145. Obviously the 125 are now way ITM.

Converted to a #fuzzy but will take a long time to make the loss back. Bought the 2022 125 put for 27.92 plus will use some more cash to roll my short put down and out.

Will let the call side expire worthless just to now spend any more money on the trade. This had been my biggest winner for the year. 1 night wiped out 11 months of gains on EXPE.

#assignment Letting LABU, TQQQ and…

#assignment

Letting LABU, TQQQ and TNA all be called out tomorrow. All profitable but I am exiting the triple game after seeing the tasty trade research.

Also staying out of earnings as much as I can. My earnings track record is not so good, lost on 8 out of 5 when I decided to stay out a few quarters ago. I will stay in them if I already have #fuzzy on.

Making enough money just doing #pietrades, #fuzzy, #hedges, and Pie trade #optionladder that I can stick with those. May be boring to some, but it is mechanical and it works. 2 accounts hit all time highs the last 2 weeks and both had SVXY in them. 2 down, 1 to go but that was the biggest loss and will take more time but on a portfolio basis I am back above my cost basis so technically all the losses have been covered 🙂

20 months to break even.

Plan not to ever do that again 🙂 🙂

And the hedges will help, see below.

#markettide Is showing a possible…

#markettide

Is showing a possible reversal on the 5 minute for /ES.

IBB STO the other side of the strangle at 103 c for 0.65 for 11/8 exp. Strangle is now the 101.5/103 for 3.45 credit total after some rolls. I am trying this as an experiment based on the TT research. Open initially at 43-45 DTE then manage at 21 DTE no matter what. Rolled the put side last week. They showed that beats all other management tactics for selling options so seeing how it works in real time with real money. 10 contracts so there is some skin in the game. So far so good, showing an $875 profit even with the puts being ITM. If it works will set up ladders on various ETFs. Single tickers would use #jadelizard to avoid upside risk.

#fuzzy
XBI rolled the short 80 put from 10 DTE out to 24 DTE for 0.42 credit. Cb 13.66.
LNG 60/65 rolled out to 45 DTE for 0.52 credit. Cb 7.12.

Here’s the link to the…

Here’s the link to the 21 DTE management research I mentioned earlier.

There is a second part and some other videos related to it. Like I said around pages 7-12 on market measure reruns.

https://www.tastytrade.com/tt/shows/market-measures/episodes/ways-of-managing-trades-05-09-2019

The new commissions at TOS…

The new commissions at TOS kicked in and are nice. Less money out 🙂

I have been trying to…

I have been trying to move out of the leveraged ETFs but am stuck in a few for a while. Tastytrade did some research that shows trading options on the leveraged has much lower returns than just trading the regular ETF. Even accounting for contango/drift/ backwardization. My personal results show that as well. I know a lot of people here trade them but it may be more effective to not option trade them. As a hedge, sure they work but for options not so much. With the volatility over the last month or so, I have had trouble staying ahead of the fluctuations. The premiums are huge but the options are not priced for the movement for selling them.

https://www.tastytrade.com/tt/shows/market-measures/episodes/trading-options-on-leveraged-etfs-11-26-2018
https://www.tastytrade.com/tt/shows/market-measures/episodes/leveraged-etfs-not-consistent-performance-03-31-2016

#pietrades
With that said rolled
LABU 35 cc out 29 DTE for 1 and cost basis down to 33.80. My plan is to let call out if ITM and use it on something else.
TQQQ 60 CC rolled out to next week fr 0.98. Cb 57.52. Same as above.
LABU 35.5 cc rolled out 22 DTE and down to 35 for 0.90. Cb 33.49. Same
EXPE STO the 29 DTE 123 put for 2.05. Timing could not have been worse, market reversed 2 minute after that.

#fuzzy
XBI #fuzzy rolled 80/80 out to 22 DTE for 0.65 credit. Cb now 0.85. Still have until 2021 to keep making $ on this one.
XBI #fuzzy 80/83 rolled down to 80/80 and 29 DTE for 0.88 credit. Cb 3.99.
LNG 65/62.5/61/60 rolled this weeks 61 and 62.5 to 61 and 62 for 22 and 29 DTE for 0.56 and 0.88 credits. Cb now 5.34

Also don’t know if any of you saw the Tastytrade episodes, market measures in the summer, search back to around page 7-12 on strangles showing that managing strangles/trades at 21 DTE beat all other management strategies, period. Even better than 50% profits. There are about 3-4 sessions on that. I have an IBB experiment going on starting 43-45 DTE and managing at 21-22 DTE. Hard to tell how it is working with the volatility but I rolled IBB yesterday (just the put side). Will re-establish the strangle depending on where we end up this week or next. I also have an ITM #jadelizard experiment going on at opening at 21 DTE. Will let you know results once I have a few cycles.

Not trying to brag but my core account just hit an all time high so I must be doing something right. That wipes out the SVXY losses on 1 account. 2 others still have a way to go but this is my largest trading account so nice to know I covered those losses in 21 months. I originally thought it would take much longer. I suspect the other 2 accounts will take another 12 months on 1 and 24 on the other. Chipping away and will hope to never make that mistake again!!!!

Trade smart, stay nimble 🙂

IBB strangle 102/107 for 10/25.

Closed the call side for 0.10. Rolled the 102 put down to 101.5 for 11/8 for 0.09 credit. If keep dropping with convert to #fuzzy now that the 2022 LEAPs are out.

EOG #fuzzy 85/75/75 rolled the 75 puts for this week out to next week for 0.41 credit. Cost basis 23.11 now.

My /ES 2690/2700 hedges only have about 2k profit, trying to sit on my hands for now but if looks like flat rest of day will roll down to take out some cash/profits.

XBI 80/80 #fuzzy rolled next week short puts out to 10/25 for 0.43 credit. Cb now 13.54. May roll the longs out to 2022 soon because they only cost $3-4 more for another year of weekly selling.

Bottom fishing?

Not saying I am going long here but in last 10 minutes /ES had 60k+ longs vs. on 3000 shorts on 5 minute chart.

My hedges have worked nicely so I may roll down to take out some cash.

With the recent volatility over the last few weeks I converted almost everything to spreads to weather the whipsaws better. Seems to be working. Have an IBB strangle I may need to invert tomorrow. Some weird divergences today. XBI up when the market is down. Biotech is usually a risk on trade.

I have once again proven…

I have once again proven my inability to time the market. Yesterday converted a bunch of ATM and ITM XBI puts on a ladder to #fuzzy to avoid the increasing margin. Of course it was up 2+ points yesterday and another 1.5 today. Will manage as #fuzzy. I had already rolled several times and converted to #jadelizard but was still facing increasing margin requirement.

Cost basis 13.80 on 20 lots and already rolled next week 78 up to Oct 11 80 for 1.07 credit so 10 lots at 12.73 but have until Dec 2021 to manage. These are on the put side. LEAPS at 80 strike, shorts at 78, 79.5, and 80 now.

LABU

Assigned on various lots over the weekend on #pietrades. STO the 35, 35.5 and 36 cc for 2.8, 2.75 and still waiting on the 36 fill. Regardless brings CB to 34.80, 34.70 and under 35 for the final.36 filled for 2.70. CB 34.85.

Rolls and adjusting

Last 2 weeks just adjusted several puts that went ITM from all the tweets.

Anyway, showing some profits this week so rolling and resetting.

/ES hedges closed for a $230 loss. Considering they cost $2398 they did their job. Kept me in trades and generated some cash on the first twitter drop. Reset to 106 DTE at the 2690/2700 back ratio, short 2:4 long for $3225. Hope I don’t need them but if so the lottery ticket will pay for future hedges. It was cheaper today with the VIX drop.

#pietrades XBI ladder at the 78/80/82 strikes. Rolled the 80 down to 79 and out 22 DTE for 1.19. Total credit 1.45 so cost 77.60 if assigned (include commisions). The other are 81.77 and 77.60.
JPM 106 puts closed for 0.15 or 1.19 profit per contract.
IBB STO 99 22 DTE put for 1.00.
LABU 3 lots at the 38 strikes will take assignment and convert to CC true #pietrade style. Spreads were too wide to roll since really close to ATM.

#fuzzy
EOG 85/74.5 and 75/75 puts rolled and cost basis now 24.19. Not the best candidate for LEAPs as the long options were expensive but saved some bacon.
GILD 65/65 will roll next week. CB 1.97. 2 more rolls should be 100% returns and free trade after that. Good until 2021. This was also a recovery from when it was closer to 80 so not a bad recovery.
GILD 65/65 rolled for credit, now free trade. Have 0.39 credit per contract. The other 2 batches in this account are 2.28 and 6.08 debits.
LNG 60/60 put spread CB 9.30. Will roll in 1-2 weeks.
XBI 80/80 calls at 2.13
XBI 80/85 at 0.77 credit per contract (free trade :)). Still have to 2021 to keep selling against it or just sit on the long calls if it starts going up again.
80/83 at 6.00. Cost basis was 11.63 and started 6/21 so 51.5% return since June 21 this year. I think #fuzzy LEAP spreads are the clear winners for smaller accounts. But certain names trade better than others. You want to buy as cheap a LEAP as you can find then sell expensive weekly options against it.
LNG 65/65/61.5/59.5 down to 8.66. Converted about 3 weeks ago when a bunch of puts went deep ITM. Excellent return here as well, initial cost was 11.12 so 33% in 3 weeks.

Trade smart!

Rolling just about everything. As…

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 5 puts closed…

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…

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.

LNG

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.

HI

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.

  1. 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.
  2. 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.
  3. 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.
  4. I finance the hedges by selling options so they only cost me house money.
  5. 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.
  6. 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.
  7. 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.
  8. Jade lizard trades allow skewing, flexibility with adjusting, and huge income up front.
  9. 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.
  10. 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.
  11. 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 🙂
  12. 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!

Cheers, Chris

Took me a while to figure out how to post a screen shot, but here are the returns for the year so far.

Continue reading

Short squeeze

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…

#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.

#hedge
/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.

#pietrades
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

#fuzzy
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.

#lizardpies
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.

2017-12-01-TOS_CHARTS

7 points of downside protection. No risk to upside. Income over 3 weeks, can probably close early for 50% or more profit.

Random stuff that may be useful.

So my 5 week full time trading experiment has been over for about 4 weeks now. Not trying to brag, but had my second best trading month ever even in a very choppy market. Over 9% returns for the month on my total portfolio and now up 38% for the total portfolio for the year as of this last weekend. Several losing trades in there as well.

So ran a few experiments and noticed a few things about the market in live time.

1. While tastytrade has found that the best time to sell options is 45 DTE, it takes a long time for the decay to occur, especially if the ticker moves. I found that there is a huge theta crush from 21 DTE to 14 or 7 DTE for OTM options. You will be closer to the money than 45 DTE, but the theta decay is huge. I may have posted this already and if so sorry for the repeat, but I was in EXPE and several other trades. Had opened both 45 DTE and 21 DTE. It took 3-5 weeks for the 45 DTE options to crush 50% but only 10 days for the 21 DTE to do the same. Recycle capital faster, make more $.

2. #spycraft version 5.1 or so idea. The weekly income is awesome, but then the 5 STD moves crush all your profits and then some. I have been setting up hedges using /ES and SPX and keeping them on almost all the time now. On the big moves down, you can roll for cash and reset the hedge to new levels. You can set up a longer term hedge 90 DTE or so to cover you max loss basically scratching the trade. It will cost more but will prevent the losses. I have not figured out the ideal ratios yet but stay tuned. Plan is to sell 21 day IC or credit spreads, use the cash to buy a few hedges, then roll weekly and keep cash coming in to reduce the hedge cost basis to zero. Other option is convert the spreads to ratios or butterflies. The butterfly seems to limit the losses faster and then if whipsaw no additional losses.

3. Keeping hedges on allows you to be a much more aggressive trader. If the SPX goes to zero, you hedges will be worth much more than your portfolio was. Because of the volatility expansion you can also buy cheaper options than you thought. I have been planning for a 10% drop as my starting point. Then figure out which option would be worth 10k at a 10% drop. Then you can figure out how many contracts to cover your portfolio. Best to do when the VIX is 12. The black swam events seem to be occurring on average 2 times a year since 2015 but are only supposed to happen once every 5 years. I will always have a hedge and will pay for it by selling options or rolling profits from the hedges.

4. #jadelizard and #lizardpies are hugely adaptable. You can often move 3-5 strikes and still take in a credit. You can also skew it to up or downside and really increase returns. If runs through the upper strikes just let it all expire, take the cash, and reset the next week. If it moves down, reset the straddle ATM.

5. #pietrades are still the cash machine but can convert to jade lizards or LEAPs if it really implodes on you.

6. Staying out of earnings trades has been helpful to my equity curve.

7. Staring at 1 and 5 minute charts is mind numbing. Congratulations to those of you that can do it and trade directionally. I can’t and have a lot more fun things to do. I will stay mostly non directional with a slight directional bias and enjoy life and my free time. Most of my trading is on my free time so the less I have to spend trading is more time to do other things. I personally will not take any trade on anything shorter than a 15 or 30 minute chart but my real triggers are now hourly or 4 hour for the weekly trades.

8. Spreads can save your bacon in really volatile markets.

9. Keep enough cash on the sidelines for adjustments and opportunities.

10. There is always another trade or opportunity. If you feel pressured to make a trade, it is probably a bad idea. The less emotional you can be also the better the adjustments/recovery you can make. Think before hitting the confirm and send button and have a plan and stick to the plan if the trade goes against you. Be mechanical in your trading and adjusting. It may seem boring to some but the reason I trade is to make money. I want adrenaline I will go kiteboard or ski and hopefully not break my face again.

11. Having a group to trade with is like extra eyes on the market. Everyone sees different opportunities. Thanks for sharing 🙂

12. Being a specialist pays off. I am a family practitioner but specialists make more in the medical field. Also true in the market. Have a handful of tickers you know, watch and trade. They all have their own personalities and once you know them it is easier to trade them. I think once you have above 10-12 names you are probably trying to do too much. Trading the same tickers over and over has improved my consistency and results. Sure, play the occasional lottery ticket but to pay the bills stick with what you know. And also make sure your tickers are diversified.

Cheers, Chris 🙂

#spx1dte, #spzx1dte

Damage control

/ES hedges are working well, just wish I had more of them. May add some more but looks like have found a bottom at least for today. Not being political but the tweeter in chief really needs to shut up and realize tariffs are bad for business.

Sorry I have been quiet the last few weeks. After recovering and getting back to work I have barely had time to eat. We had to move 400 patients while I was out and it really messed up the schedule. Hope to be caught up in the next few weeks. Also have not found a good way to separate the service trades from my other trades as they are often similar.

Anyway, I have been adjusting jade lizards and have found them to be easier to roll than just a put or a call. I was able to roll IBB down on Thurs. from 107.5 to 103.5 for a 0.01 debit. 4 points of extra downside for 1 penny, I will take it. Because I am selling the straddle the credit can often offset the drop.

So anyway here are my current positions. All will need adjusting this week. If we keep falling will convert some to LEAPs/ #fuzzy.

90% of these expire this week.
/es back ratio hedge, 79 DTE 2610 short 1 and long 2 2605 for 21.50 or $1075 for every 3 contracts. Up nicely 🙂 and I may roll down to take out some cash.
GILD 65/65 at cost basis of 6.79, 4.68, and 7.35. Keep working to zero cost basis.
IBB 103.5/103.5/104 jade lizard rolled down Thurs from 107.5 for 1 cent debit. CB 103.51. Will roll or convert
iWM 155.5 converted to 155.5/155/5/156 jade lizard for 0.30 credit. CB 154.18 will need roll
LNG 67.5 put was converted to #fuzzy for cost basis of 10.33
SQ 73.5/73.5/74 cb 1.27. Needs rolling.
XBI 84/84/84.5 jade lizard for 1.49 credit. Cb 82.51
LABU 50 cc for cb 46
QQQ 185/188 for 3.26
XBI 80/85 for 7.57 and 13.81
LNG 65.5/65.5/66 for 1.44 credit this morning
TNA 64 cc for 61.97
TQQQ 66 cc for 63.94
AMAT 43 puts for 1.03 cb 41.97

Obviously most of these will need rolling or adjusting toward the end of the week. We keep falling I will convert most to LEAPs on the put side.

Cheer 🙂

#hedge put on shortly after the futures open.

Appears tweets on tariffs are again driving volatility so to potentially take advantage of that set up /ES hedge.
STO the 89 DTE (July end of month/EOM) 2610 put and BTO 2605 puts in a 2:1 back ratio so long 2 2605 for every 2610 short. Each one will give about a 4-5k profit if we drop 10% and only cost $21.50 or $1075 total.

Hope I don’t need the lottery ticket and expect to lose on this but if we tank at least something will go up.

Speculative trades

Small accounts, small size, IRAs. Don’t bet the farm on these types of trades.

#pietrades
LABU 5/3 49 put STO for 1.05
LABU 5/3 50 cc for cost basis of 48.30.
TQQQ 5/3 66 cc for cost of 65.03.

Will let call out, assign, or expire.

Hopefully the bottom does not fall out in 3-4 days, if so will roll as long as needed. All of these are 78.4% + annualized or better.

Back at work so have…

Back at work so have not had time to update. Managed to get a few trades in. This is update of current positions.

#pietrades
Tues. STO IBB 107.5 5/3 put for 1 right before the medicare for all gave all the biotechs and insurers a haircut. Will be adjusting this for a few weeks.
IWM STO the 5/10 152 put for 1.21 today. May convert to #lizardpies depending on market moves
LNG 67.5 put was rolled down last week for cost basis of 66.8. Need to adjust and exp. 5/3.
AMAT 43.5 CC expires next week. cb 42.55
ERX 23 cc expires today/assigned and cb 21.81
LNG batch 2 same as above but cb 67.15. Had a better fill.
TNA expiring today 65 put rolled to next week 64 for 0.48 credit. Cb 63.52 if assigned but will manage
TQQQ 53.5 cc expires next week. 56.75 cb. I tried to roll it but the MM are being greedy bloodsuckers so will take the minor loss and use the money on something else.
AMAT 41.5 put expiring today rolled to 42.5 next week for 0.42 credit. Cb 42.08.

#lizardpies
EXPE 113/130/131 for 5/10 credit now 3.84. Hope to close next week.
SQ 74/78/78.5 adjusted Tues for additional credit. 72.81 cost basis

#fuzzy
GILD 65/65 cb down to 7.34
GILD batch 2 65/65 cb at 5.23
XBI 80/80/85 rolled today. Cb 8.96

I am trying a 21 DTE OTM experiment as I noticed while I was off OTM options usually crushed by over half from 21 DTE down to 14 DTE if they stayed OTM. Percentage wise much better than 45 DTE and really not to much closer to the money on strikes. Maybe 1-3. Will keep posted but I am hoping there will be a lot less adjusting. Adjustments just decrease profits. Will keep you posted.

Hoppy Easter everyone 🙂

#optionsexpiration #pietrades EOG will call…

#optionsexpiration

#pietrades
EOG will call out today at 97 with cost basis of 96.14
LNG 67 put rolled up to 68 and next week for 0.66 credit. Total credit now 1.22.
TQQQ batch 1 54.5 cc being assigned with cost basis of 56.39 for 1.89 loss. Was a lot worse in Jan.
LNG batch 2 67.5 rolled up to 68 and out to next week for 0.55 credit.
TNA 62.5 put rolled to next week and 65.5 for 0.85 credit

#lizardpies
EXAS is expiring for 0.62 credit per contract. I was trying to close it but the MM are being greedy. The spread on the put is 0-3.90 and they are not moving. I tried to roll/close for 0.2 but no dice. Ok, I will let it expire for full credit and not pay commission.
EXPE 113/130/131 decaying well. 1 more week should be able to close roll at 50%.

Looks like the largest theta decay on some of these OTM strangles/jade lizards occurs from 28 to 14 days. For instance the 113 put on EXPE is going for 1.25, 21 DTE 1 and 14 DTE 0.20. I may start looking at these from 21 or 28 days down to 14 days to recycle capital faster.

#pietrades AMAT STO the 9…

#pietrades

AMAT STO the 9 DTE 41.5 put at 0.70. Will let assign if ITM or roll depending on where it is next week.

Tradestation issues

Obviously they do not understand options. Received an immediate margin call notice on my QQQ spread I opened yesterday. Telling me I need $2000 per spread even though I was long the 175 QQQ 2020 and short next Friday 184.5 calls. No risk since my long is a lower strike than the short and I still have a positive cash balance.

Anyway, apparently this changed 2 years ago from what the margin dept. told me. Stick with TOS or the other platforms that understand how to calculate option risk. Had not done spreads in this account in a while so FYI!!

With that said, closed the QQQ #fuzzy for basically the cost of commissions, out $24. Now I can’t trade until tomorrow because they reset cash values at midnight.

The more I try other platforms the more I realize how good TOS is :).

Old school trade

#fuzzy
QQQ Jan 2020 175/184.5 4/18 for 16.72 debit. Plan is to roll/adjust/close depending on where it is next week.

#pietrades
LNG STO the 4/12 67.5 put for 0.80. Cost basis 66.7 if assigned.

#optionsexpiration #pietrades EOG batch 2…

#optionsexpiration

#pietrades
EOG batch 2 assigned at 89 at a cost basis of 92.63. This is a small account and I plan to take it to spreads to juice returns so just wanted to take the loss so I can redeploy capital on Monday.
EOG batch 1 I rolled up to the 97 cc for next week at 6.75 and after selling the 97 for 1.35 cost basis 96.14. I never figured out why it spiked so much yesterday?
FAS 57 cc assigned at cb of 54.20.
ERX 23 cc rolled 2 weeks for 0.5 credit. Cb 21.81
LNG 4/12 67 put sold for 0.54 yesterday.

#lizardpies
EXPE rolled on 4/3 to 37 DTE 113/130/131 for additional credit. Total credit now 3.84 per contract
EXAS STO the 89 put for 4/12 for 1.01, then converted to #jadelizard yesterday 89/89/90 for another 0.6 credit.
SMH closed 4/3 for 0.45 credit per contract
JPM closed 4/4 for 1.08 credit per contract
SQ rolled out to 4/12 for 1.26 credit at 76/76/76.5 strikes. cb 74.74 if assigned.
TNA 60 rolled to 4/12 62.5/62.5/63 for 1.1 credit.

#fuzzy
GILD 65/65 cb at 6.39
GILD 65/65 rolled out 37 DTE yesterday for 1.07 credit. Cb now 7.34

1 more week of surgical recovery then back to work but trading full time the last few weeks has been more than I would make at work so good to know for retirement. However, I am really looking forward to some solid food!

Expiration but mostly rolls, closing and managing.

#pietrades
EOG 90.5 cc for 4/12 cost basis 90.74. Depending on where it is trading will let assign at slight loss or roll.
EOG 89 cc 4/5 cost basis 92.63. Will roll this one.
ERX 23 cc for 4/5 cost basis 22.31. Will let assign or roll
TQQQ 54.5 cc for 3 weeks cost basis 56.39. Will roll
TQQQ 55 cc for today at 53.79 cost basis. Will assign today.
TQQQ 53.5 cc for 3 weeks cb 56.75. Will roll
FAS 57 cc for 4/5 cost basis 54.20. Will let assign.

#lizardpies
XBI 4/5 86/86/86.5 closed today for 0.52 profit per contract. Could only make .69 above 86 so decent profit for 2 day trade. I had skewed this one to the downside but it moved up today.
EXPE 4/26 115/131/132 for 2.31 credit. Looking good now, hope to close for 50% or better profit in 2 weeks. Right now at 25%.
SMH 4/26 100.5/110/111 for 1.38 credit. Same as above.
SQ 4/5 75.5/75.5/74.03 for 1.75 credit. Same but will most likely roll it in pieces.
JPM STO today the 4/5 101/101/102 for 1.81 credit. Looks like it found a bottom.
TNA 4/5 60/61/61.5 rolled this morning from last week. Credit now 3.06.

#fuzzy
GILD 65/65 for 2 weeks at 8.41 cost basis.
GILD 65/65 for 3 weeks 6.39 cb
XBI 80/80/91.5 cb 11.74. 2 more weeks on the short calls.

Percentage return wise, the #jadelizard trades seem to work the best and also easier to roll because of the initial higher credit. Live study ongoing and will keep you posted. I am also skewing them depending on which way I think it is moving and that seems to help the winning percentage. Using the #markettide to time entries.

Have a good weekend!

2 more weeks in the jaw wires then back to work for me 🙂 although I am enjoying the extra trading.

#lizardpies SQ rolled the put…

#lizardpies
SQ rolled the put down yesterday, today closed the 76/76.5 ccs for 0.05. The sold the 4/5 75.5/76 ccs fro 0.16 credit. After the roll of the puts earlier in the week, break even now 74.03 on down side and no risk to upside. In fact anything over 75.5 makes 4.10 a contract from the accumulated credits now.

The pull back helped a…

The pull back helped a few positions so rolling.

#lizardpies
SQ this week 76/76/76.5 rolled the puts to next week 4/5 to the 75.5 put for 0.08 credit. I will let the call side expire worthless then re-establish the #jadelizard on Monday. Cb now 74.14 on put side, no risk to upside.

STO the 4/5 XBI 86/86/86.5 jade lizard for 1.19 credit. Cost basis 84.81 on downside and no risk to upside. Skewed it slightly to downside in case market keeps going down. Anywhere above 86.5 make 0.69 per contract. Below will roll the puts.

#pietrades
EOG batch 1 rolled the 90.5 cc out 2 weeks to 4/11 for 1.05 credit. Cost basis down to 90.74. 1 more roll should be profitable.

Not having a lot of success with directional trades, but by having time to watch the market (not all day) I have been able to time my rolls better and make more income. Not sure I will ever be a full on directional trader. Even watching the 1 minute /ES chart, just missed the pivot.

TRIP closed at a 1.47…

TRIP closed at a 1.47 loss per contract. I probably could have recovered but I have some other positions that are doing extremely well but using up a lot of margin so I closed this so i could hold onto the winning positions.

#lizardpies will be 2 versions. 1 version will be 43-45 DTE strangles and the other will be weekly ATM straddles with the next strike call purchase. These will be more weeklies. The longer ones will be closed or rolled at 50% profit. Trying this as an ongoing live experiment. Has done well so far so extending it to more income trades. Don’t think we need another hashtag, will just be in format short put strike/short call strike/long call strike.

For example SQ currently this Friday 76/76/76.5.

#optionsexpiration and position updates. I…

#optionsexpiration and position updates.

I was hoping for a reversal today, but alas I was never able to get short. But the run has brought 2 accounts very close to all time highs and 1 of them had some SVXY crap in them so that is a good thing.

#pietrades
EOG 90.5 cc at cost basis of 91.79. Assigned off 96 put 2 weeks ago. Closes next week, nit sure if I will roll or let call out. I could use the money elsewhere.
EOG second batch 89 call at 92.63. Same idea.
TRIP 52.5 cc rolled down to 8 DTE 52 for 51.78. I will let assign if ITM
ERX 8 DTE 23 cc at 22.31. Will assign if ITM
TQQQ 54.5 CC at 56.39 cost basis. A pullback would be helpful
FAS 57 cc at 54.20. Will let assign next week.
TQQQ 53.5 cc at 56.75
TQQQ 55 cc at 53.79

#lizardpies
EXPE 36 DTE 115/131/132 at 2.31 credit
SMH 36 DTE 100.5/110/111 for 1.38 credit

#fuzzy
GILD 65/65 at 8.41
XBI 80/80/91.5 at 11.74
GILD 67.5/67.5 rolled down 22 DTE for 0.28 debit so now cost basis is 6.39.

Ok, just about finished with taxes which is my yearly review of every trade I did the previous year.
SVXY was a complete debacle.
#fuzzy held up the best during the correction but I am still most consistent with #pietrades. However, looks like the #lizardpies may actually be better, especially when selling the ATM straddle. That is the most amount of income you can collect. Then the long call option prevents losses to the upside. I will be doing more of these on a weekly basis.

In fact, I have a lot of time at the moment and found some Tasty trade research (recent) that confirms it. Less volatile returns than even strangles.

https://www.tastytrade.com/tt/shows/options-workshop/episodes/research-on-the-big-lizard-strategy-01-15-2019

https://www.tastytrade.com/tt/shows/options-workshop/episodes/using-big-lizard-trades-in-a-portfolio-01-22-2019

If you are in a hurry the slides will sum it up. Almost stayed flat during the 2008-2009 market, certainly beat every other tactic.

Moved some money so hopefully some directional opportunities tomorrow.

🙂

Tastyworks vs. TOS

Have enough cash sitting around to open another account. I know some of you are using tastyworks. I applied but have not funded yet.

Questions
1. Execution and platform similar to TOS? TOS saves me money not on commissions but they usually wiggle in between the bid/ask (that saves me more than commissions)
2. Any additional tools on tastyworks that make it worthwhile?
3. Any problems with it?
4. Any idea what the portfolio margin limit is?
5. Do you have to get the market feed (currently $100 a year), or is there enough data on the platform to make it work without it?

Thanks in advance.

Of course I can also move the money to an existing TOS account, that’s why I am curious about the works.

EOG this week 88.5 cc…

EOG this week 88.5 cc rolled out to 4/5 and up to 89 for 0.20 credit. Cost basis 92.63. Should be a few more rolls to break even.

EOG has excellent premiums but hard to #pietrade. It will move $6 in a week. This one better to swing trade/time I think.

SMH STO the 4/26 100.5…

SMH STO the 4/26 100.5 put for 1.02. Ironically the 101 was selling for about the same so an extra 50c of downside for a few pennies. Plan to close in 3-4 weeks at 50%.

ERX 21.50 cc assigned early…

ERX 21.50 cc assigned early last night. Reopened for 4/5 23 cc at 22.31.

Don’t know about the rest of you, but I have been assigned early on about 40% of my positions lately, even when there is still time value left.

#markettide V3 is out. Does…

#markettide

V3 is out. Does not appear to be a huge resource hog as Bryan initially told me. However, appears less sensitive so you may have to change the ATR settings if you want it to pick up all the pivots.

Default is 0.50 upper but I am trying 0.25 for a while. More sensitive but will be trading full time for a few weeks.

Hello bistro, my fun ski…

Hello bistro, my fun ski day March 7 turned into a trip to UMD shock trauma so have been out of work and trading for a few weeks. However, I am home another 4 weeks and plan to trade as actively as I can, kind of a test run for full time trading when I retire someday many years from now.

Won’t bore or gross you out with the details, but a collision with another skier (they are ok from what I have heard) sent me face down into the snow from a jump in the terrain park at the end of the day. It subsequently broke my nose (7th time) and 6 other bones in my face. Fortunately my brain and spinal cord are fine and the helmet did its job. But it took a 4 hour surgery and 4 titanium plates in my palate and sinuses to put me back together.

Anyway, my jaw is wired shut for 4 more weeks so I can’t talk which is required for my job. So I am home recovering and will be trading while I burn through my vacation time, fortunately had enough to cover it.

With that said, I needed a bunch of cash so STO EXPE 43 DTE on last Thurs. 115 put for 2.10 in a larger account. My goal is to close it for 50% profit in 3-4 weeks. Tastytrade style.

One of my goals going forward with trading is to target certain trades for certain requirements. With that said, #pietrades will still be the bread and butter, but I occasionally will sell something farther out and OTM mostly to pull the cash out of the account and use it for certain expenses.

Other trades I have on, sorry some of the dates are hazy. I traded some prior to surgery but my vision was fuzzy and my judgement was slightly impaired. Fortunately does not look like I did anything stupid.
Assigned 300 shares EOG over the weekend at the 96 put but cost basis 93.03. STO 3 march 29 90.5 calls at 1.24 this morning. Will manage aggressively. Cb 91.79.
GILD rolled the 70/70 #fuzzy down to 65/65 for debit but cost basis 8.41.
TRIP 52.5 CC for this week cost basis 52.33.
ERX 21.5 cc should assign this friday at cost basis of 20.28.
TQQQ i rolled both batches to 54.5 CC with cost basis of 56.39 and batch 2 53.5 cc for 56.75 and somehow have a third batch now at the 55 cc for 53.79 cost basis.
XBI #fuzzy 80/80 was assigned early on half. Closed and rolled 1/2 the short side up to 91.5.
FAS 57 cc cost basis is 54.20 and will let assign in 2 weeks.
GILD 67.5/67.5 #fuzzy rolled down for credit. Cost basis 6.11.
EOG batch 2 88.5 cc at 92.83 cost basis.

Hope everyone is doing well 🙂

Learned a few life lessons from this but not sure if it will help trading, will see.

Updates

#pietrades
EOG batch 1 96.5 put rolled out next week to 96 for 0.16 credit. Cb 93.63 if assigned.
EOG batch 2 96.5 rolled out a week for 0.43 credit. CB 93.91 if assigned.
LNG 65.5 rolled out next week to 65 for 0.12 credit . Cb 63.59 if assigned.
TRIP 54 CC. Was assigned early Tues night so sold the 54 cc for next week for 0.96. Cb 53.03 and will let assign if ITM.
XBI 83/86/87 #lizardpies closed for 0.97. Total credit 3.22 over 3-4 weeks
AXLN 125/131/13 #lizardpies closed for 1. Total profit 1.37 over 3 weeks. It took off to the upside.
QQQ 171.5 sold for 0.75.
SQ 75.5 put STO for 0.83 credit for 3/8.
EXAS 3/15 87.5 put sold for 1.15
ERX 22 cc rolled next week for 0.3 credit. Cb 21.23
TQQQ 54 cc at 56.79, need to stay ahead of the rolls.
FAS 57 cc rolled for 0.40 cb now 54.77.
TQQQ 52 cc at 57 cost basis. Will be rolling.

#fuzzy
GILD 70/70 rolled for 0.24 cb now 7.48.
GILD 67.5/69 cb 6.51
LNG 50/60 rolled for 0.44 credit. Cb 12.49
XBI 80/80 rolled for 0.27. Cb 12.29.

Busy few weeks. Sun is out, headed outside.

Updates

#markettide Spoke with Bryan this morning. They are rolling out version 3 either this week or next. He told me it maxes out TOS so if you have a slower computer like my laptop you may be better off staying with version 2. However version 3 is supposed to have scanning and my desk top has the power to handle it. He also said thanks to everyone at the Bistro that picked it up. The scanning should give live time signals!

#pietrades
ALXN Rolled 2/22 #lizardpies to 125/129/130 for 1.42 credit. cb 123.88 if assigned
EOG 98.5 put rolled down to 96.5 for 3/1 for 0.50 credit, batch 1. Second batch went through at 0.15 (tradestation issues). Cb 94.28 if assigned. Earnings next week.
LNG 65.5 put rolled earlier in week. Cb 64.21 if assigned
TRIP 57 put rolled out to 3/1 for 0.35 credit. 53.99 if assigned. If still ITM this week will roll it out 43 DTE and down.
XBI #lizardpies rolled out to 3/1 and adjusted to 83/86/87 for 0.30 credit. Cb 82.40 if assigned.
ERX 22 cc 3/1 for 21.53 debit and cost basis.
TQQQ 54 cc in 3 weeks at 56.79. Trying to stay ahead of the rolls until break even then will let it assign and start over.
TQQQ 52 CC at 57.00. Same
FAS 56.6 cc rolled up to 57 3/1 for 0.40 credit. Cb 54.77.
EOG batch 2 rolled out to 3/1 for 0.15 cb 94.34 if assigned.

#fuzzy
GILD 70/70 rolled out 43 DTE for 0.24 credit. cb 7.48.
XBI 80/80 cb 12.56
LNG 50/60 cb 12.93
GILD batch 2 67.5/69 rolled out 43 DTE for 0.45 credit. Cb 6.51.

Tradestation 10 has some huge memory requirements, that was my issue with it not working. I spent 2 hours with Tech sorting out the issues. Bottom line, you need a 10gb memory chip to run version 10. If you don’t have that stay with version 9.5 and they will continue to support it. Option station pro requires less power on that version as well. However, you have to uninstall all previous version and re-install it for the 9.5 version to work correctly. Ghost files from the other version interferes.

I am trying to figure out a way to separate my accounts from the service accounts. May take me a little while to figure out an easy template. In the meantime will probably only have time to post on the weekends. Once I can easily separate them should be able to update on a more regular basis.

Also will be doing more buy writes for #pietrades depending on directional signals. Better returns than just selling puts if I have a upward bias. The other option is more ATM or ITM puts if I think it is headed higher.

Hope everyone is doing well and staying dry or at least having fun with some snow:)
Just wet here.

#pietrades LNG 3 DTE 65…

#pietrades

LNG 3 DTE 65 put rolled out to 10 DTE and up to 65.5 for 0.73 credit. Cb 64.21 if assigned.

Just a thought for anyone…

Just a thought for anyone thinking about shorting the market now, I heard somewhere yesterday that there is a record amount of cash on the sidelines. As they pile on market highs that will squeeze out any shorts lefts.

Just an FYI.

#optionsexpiration a day early. Some…

#optionsexpiration a day early.

Some of these trades are from yesterday, have been to0 busy at work to post.

#pietrades #lizardpies
ALXN 120/129/130 for 2/22 for 1.25 credit yesterday off an 0.85 roll the previous week.
EOG 98.5 put for 96.75 cost basis off a roll
LNG 65 puts for 2/22 STO yesterday for 0.56 credit
TRIP 57 puts for 2/22 for 0.66
XBI 84/85/86 total credit now 4.19. Have been rolling 3 weeks.
TQQQ 51 CC rolled out 43 DTE to 54 CC for 0.25. Cb now 56.79
TQQQ 51 cc rolled out 43 DTE to 52 for 0.10 for cost basis of 57.00
FAS 1 DTE 56.5 cc rolled out 8 DTE for 0.47 credit. Cost basis 54.17
EOG batch 2 98.5 8 DTE cost basis 97.1

#fuzzy
GILD 70/70 cost to 7.72
XBI 80/80 rolled for 0.56 credit. Cb 12.56
LNG 50/60 rolled for 0.33. CB 12.93
GILD 67.5/69 rolled for 0.26 cb 6.93.

Finally some consistent results last 4 weeks. Of course the market screaming higher does not hurt. But mostly I was able to unwind a bunch of accumulated rolls and finally pull some cash out of the market again.

Since Jan 1 have been officially working with the advisory service. Obviously I cannot post those trades but will keep posting other trades I find and really like how many of us here are willing to experiment with different tactics to see what really works the best with real money in real time! This is a great trading group and I will stay involved, thanks to many of you I survived the 20% correction which now seems to be over and even came out ahead. This down turn was WAY better than the SVXY debacle last Feb. 6 2018, not that anyone here needed reminding 🙂

One thing is certain, I will be keeping a general market hedge on now all the time. May only need it once or twice a year but then it is a lottery ticket. To keep it from costing too much will probably use a back ratio or risk twist trade. Will set it up to cover a 10% correction. Anything beyond that it becomes a mega lottery ticket.

Cheers, Chris

#fuzzy GILD 70/70 10 DTE…

#fuzzy
GILD 70/70 10 DTE rolled out to 31 DTE for 0.28 credit. Cost basis down to 7.72. Hoping to have it to zero by the summer.

#pietrades STO the ALXN 2/15…

#pietrades

STO the ALXN 2/15 118 put for 0.85 credit. Could probably get more now. 117.15 cost basis if assigned but more likely will roll.

#fuzzy EXPE, after the huge…

#fuzzy

EXPE, after the huge gap up after hours, 9 points yesterday it was up only 3 around lunch time today. My short 126 puts that were 4.75 and short 120 puts were at 1.75 both crushed to pennies. My leaps maintained their values. After several months of adjusting out for 16.23 and 13.97 credits. Cost basis was 9.43.

Some days lucky is better than good and I will take it. This was a huge winner after being flat since Oct.

Now I have a bunch of cash and will look for trades over the weekend for Monday.

Expirations, rolls, etc.

#fuzzy
EXPE have the 120/120 and 125/126 expiring tomorrow. Cost basis 9.43. It is really holding onto the time value, I have over 5k of theta decay on this position alone. Should crush with earnings tonight and either way it swings this trade is up huge and will close all of it tomorrow then reset. One of my biggest winning trades so far, especially from a recovery standpoint. Down a lot earlier this year, up 17k+ now 🙂
GILD 70/70 adjusted earlier this week. Cb 8.00, I miscalculated below.
XBI 80/80 rolled out to next week for 0.42 credit. Cb 13.13
LNG 50/60 cb 13.26, adjusts next week
GILD 67.5/69 rolled another week for 0.41 credit. cb 7.19
Some of these trades should be scratched in another 2-3 months, I hope, then have pure income.

#pietrades and #lizardpies
SQ 68 put rolled up to next week 70 for 1.11 credit. Cb 68.89 if assigned but will be out before earnings.
EOG 98.5 rolled out 15 DTE for 0.67 and 0.3 credits. Cb 96.78 and 97.1 Tradestation having issues with option station pro. However, if you call them they will not charge you for the broker assisted trade.
TQQQ 51 cc cb 57.04. Will roll aggressively
TQQQ 51 cc cb 57.10 same
FAS 56 cc rolled out 1 week and up to 56.5 for 0.13 credit. cb 54.64

Hope everyone has a good expiration, volatility back today I assume because of the idiots in DC comments on the trade wars.

#fuzzy MU STC the 35/35…

#fuzzy
MU STC the 35/35 for 7.38 credit. Total loss of 6.92 but I am now out of my biggest losers. It could have been much worse, it was down 25+ points at one point.

Everything left is solidly in the green EXPE, GILD, XBI.

Also today is the anniversary of the SVXY implosion and my biggest trading losses ever. While I still have a long way to go to break even on cost basis and even further to hit all time highs, the tactics we have been developing since then have been account savers for fixing bad trades. Thanks everyone for the input and by all of us trying new techniques I think we are all able to handle volatility better and even profit more from it. Keep up the good work!

At least 2 accounts are about to hit all time highs, 4 to go.

I have a bunch of cash now and will be adding some trades tomorrow.

#fuzzy GILD 70/70 expires this…

#fuzzy

GILD 70/70 expires this week rolled out 2 weeks for 0.48 credit. Cb now 8.95.

#pietrades STO EOG Feb 8…

#pietrades

STO EOG Feb 8 98.5 put for 1.10. Cb 97.4 if assigned.
Another batch of 3 in another account for 1.05 or 97.45 if assigned.

#fuzzy
WDC so far ITM now that can’t roll. Closed the 40/40 for 6.45 credit resulting in 11.26 loss per contract. However, this is much better than if I had held the stock, would have been a 74 point loss as I originially had sold the 100 and 98 puts before Oct.

I will take the cash and use it for a better trade 🙂

#lizardpies XBI decayed enough I…

#lizardpies

XBI decayed enough I rolled it to an 83/83/83.5 jade lizard for 1.59 credit. cb 81.41 if assigned.

#optionsexpiration, adjutements, rolls, new trades…

#optionsexpiration, adjustments, rolls, new trades

#lizardpies
XBI 78/82/8.25 should expire tomorrow for 1.26 profit per contract
AMAT BTC the 39 puts for 0.29 that expire tomorrow. Sold for 0.71 last week. Tradestation so can’t trade until tomorrow. I think I will replace it with a #pietrades 108 CC on IBB currently for around 106.89. Obviously that will be different tomorrow.
FAS STO 56 cc for 54.77 expires in 8 DTE
TQQQ batch 1 50 cc rolled out 22 DTE to 51 CC for 0.26 credit. Cb now 57.04 and will have to stay ahead of the rolls.
TQQQ batch 2 50 cc rolled out 36 dTE 51 cc for 0.55 credit. Cb 57.10 and same as above.

#fuzzy
LNG 50/60 8 DTE rolled out to 22 DTE for 0.3 credit. Cb now 13.26
All the others were updated and expire next 1-2 weeks.

Back to even from the start of the October volatility. Now keep working on getting back to even from SVXY losses. Expect at least another 12-24 months unless everything goes perfectly, hahahaha, yeah that would happen 🙂

Something I noticed about #fuzzy over the last 3-4 months. As long as you keep rolling and generating cash they seem to withstand market volatility better than many other trades. In a few small accounts, I generated almost 50% of the value of the account in cash over that time even though the paper value was steadily declining. Have to agree with @fuzzballl, they are flexible. However, going forward I think I will take profit and then reset as we discussed earlier. I think it would make management easier and also lock in profits and also allow you to move the strikes more effectively as the market moves.

#rolling, adjustments, and new trades…

#rolling, adjustments, and new trades

#fuzzy
MU rolled the 35/35 out 16 DTE for 0.5 credit. Cb now 14.30
WDC 40/40 rolled out 9 DTE for 0.33 credit. Cb now 17.71

I was going to close these at a loss but figure if I can get at least 0.25 per roll will keep rolling to generate cash and lower cost basis. 10 contracts each so decent income.

#pietrades
SQ STO the 9 DTE Feb 8-9 68 put for 1.53. Decided not to jade lizard until after FOMC and see what the market does. If we gap up I will sell the CCS once it has a top or range.

FOMC must have just released up 10 more on /ES. I may #jadelizard SQ into the close if it slows down to the upside.

After 4-5 months of crap trading, finally making some income/cash and money again but I still have a long way to go to recover the SVXY fiasco.

#fuzzy WDC 40/40 rolled out…

#fuzzy
WDC 40/40 rolled out 7 DTE for 0.45 credit. cb now 18.04.

#pietrades
AMAT 7 DTE 39 puts sold for 0.71 credit. Cb 38.29 if assigned. Smaller account so only 3 contracts.

Hoping the bottom on the chip sector holds but will roll or take assignment if not, true PIE style.

Holding on further #spycraft at the moment until we figure out the best defense, market is moving more than the options are priced for.

Clearing the decks/resetting several accounts

Obviously what I have been doing the last 4 months has not been working. Hit all time low balance again Jan. 4 this year. So I am going back to what works and has been proven through several market cycles and rebuilding the equity curve. At least last month have recovered and higher than the Feb. 6, 2018 SVXY losses and lowest balance from then.

So I am clearing out losing trades, closing a bunch of #fuzzy, some at profit, some at loss, and re-deploying capital. My trading will mostly consist of #pietrades, #lizardpies, #spycraft and the occasional directional play/scalp and a few #fuzzy

Some closings today, but have 2 more weeks to clear out the primary account.

#fuzzy
EOG 110/110 closed for 5.16 loss per contract. It is so far ITM can’t get decent premiums anymore. My intial loss was 17 so this tactic works.
EXPE closed the back ratio credit spreads, left with 120/120 and 125/126. This is sitting on a profit and will close it over the next 2 weeks as the shorts expire. Cb 9.43 and right now can close for min. 11.45. another week of decay that will be better. Lost $600 on the credit spreads after butterflying to control risk (could have been 2000).
MU 35/35 now ITM Cb 14.80 and will roll next week.
WDC 40/40 cb 18.49 and waiting for the short to implode after earnings today.
XBI 80/80 cb 13.97
LNG 50/60 rolled 15 DTE for 0.5 credit for 13.56 cb.
GILD 67.5/69 rolled 15 DTE for 1.3 credit. Cb 7.60

#pietrades and #lizardpies
XBI 78 put 82/82.5c 8 DTE for 1.26 credit
TQQQ 50 CC rolled out 15 DTE for 0.45 credit. CB 57.56 so will manage aggressively
TQQQ 50 cc lot 2 cb 57.30 same
LNG STO the 8 DTE 63 put for 0.92. CB 62.08 if assigned. LNG is my best performer for the year so far 🙂

#spycraft
Batch 1 closed for a $214 loss after the back ratio adjustment did not work. SPY reversed.
Batch 2 closed for a $344 profit, but only because tradestation messed up and sold 20 contracts of the put side instead of 10 so even with the back ratio that did not work I made a few $. Now I am on hold in this account until tomorrow. Tradestation does not give you credit for closed trades until after midnight so I only have $614 buying power in this account until tomorrow morning. Another reason I prefer TOS over TS.

What I have learned most recently.
#fuzzy works well but I think the real value of them is to close them once you have a profit. The EOG trade would have worked if I had just closed it early. If you still like the trade, reset the strike prices. I will use these as shorter term trades out 1 week or a month, take my profit and reset. Commissions are cheap enough to do that most of the time. A 6 % return in one month and then resetting is 96% annualized. Instead of trying to take the cost basis to zero will just take profit and reset. Will probably just use a 90 day option for the long side.

#spycraft
I think the best adjustment when the short strike is challenged is to butterfly it. You can set a defined p/l by broken winging it and skewing it if you have a bias. Just to stop losing can simply butterfly it. Seems to be the cheapest way to do it and least affected if it reverses. Yes you may lock in a loss, but much better than a full loss on the credit spread.

#pietrades and #lizardpies
Upside directional bias set it up as a synthetic long.
No directional bias, set up as a straddle jade lizard.
Downside directional bias set it up as a strangle jade lizard.
But I think setting it up as a jade lizard initially gives more flexibility in managing because of the extra credit. I will be doing A LOT more of these.
Can also leg in and out depending on how the stock moves.

Pouring here so going to work out in my garage gym. First bike race is in 8 weeks so need to lose 10 pounds and make friends with my fast again 🙂

Hope everyone has a good expiration!

For some reason the reply…

For some reason the reply button is not working for me at the moment.
Adding to @jeffcp66 and @kathycon discussion below on SPX/SPY/ES credit spreads below, the idea is to get a directional kick if the short strike is violated. Sometimes it works and you get a good profit spike. From what I did with #spycraft the other day, not looking so good today but I did not have time to adjust. Hoping for a snap back rally tomorrow.

The way I see it there are 3-5 adjustments that may work most of the time, none are going to work all the time.
1. delta neutral buy back half of your short strikes. Works great if it keeps moving, not so much if it reverses like it has for me.
2. delta neutral, buy some options between your strikes. Same as above but probably a little cheaper and the same problems as above.
3. just closing it down at a certain loss level or closing it early. You could also roll out and up/down but may be hard to get credits if it has already moved that much.
4. butterfly, either BW or regular. This is probably the cheapest and can be skewed but then will have loss on one side, but fixed gain or loss on the other. At least you stop the bleeding at that point and lock in your gain/loss.
5. convert the short side to a calendar or diagonal like a #fuzzy and then manage from there but then you may be in a position a lot longer than you want.

Final decision up to you but I am going to keep experimenting with all 5 options to see if there is one that always works the best. Like @kathycon I think the butterfly will be the most efficient. Once on you can leave it alone and let it expire. Everything would cancel out.

#spycraft Closed 5 of the…

#spycraft

Closed 5 of the 10 short 266 calls for the Feb 1 expiration for 3.49. The new Tradestation screens apparently put my orders in last week twice, so I ended up with 20 contracts instead of 10 on the put side. It is doing well so will leave them but I don’t have the margin for the ladder now. So anyway, sitting on my hands on this one until next week.

Once I can close the put side will re-ladder.

However, I don’t really see any reason to sell the call side at the moment so will just open the put side and leg into the call side later. If you are going to iron condor I would skew to the upside a lot. Looks like there is panic buying now.

So now have 20 contracts of the 245/242 puts, 5 of the 266 and 10 of the 269 call side. Keep on rallying. Cost 3.49.

I also adjusted the other account. It is now the 242.5/240.5 put spread 5 of these and 3 of the 268/ and 5 of the 270. Cost 2.38 to close these.

I figure if we can keep rallying will be a winner. If not can resell on the pull back.

Ladder on 1 account STO the Feb 8 255/252 put spread for 0.21. 10 contracts

No point in adding the call side until we have 2 sided action again.

#spycraft Making some adjustments to…

#spycraft

Making some adjustments to the call sides in SPY and EXPE. Too busy to post the actual trades at the moment, just trying to get them through. Will update later.

Looks like we are back in slow grind higher mode everyday.

EOG

Closed out the inverted fly at 97/98/99 that had been converted from a violated credit spread for 0.11 debit. After all said and done made $464 on 10 contracts.

Still have the 110 #fuzzy to manage.

#spycraft Just opened Feb 1…

#spycraft

Just opened Feb 1 expiration IC at the 245/242 puts for 0.25 credit and the 166/269 calls for 0.39 credit. Could probably get about the same now.

#fuzzy

WDC rolled the 4 DTE 70/70 out a week for 0.62 credit. Cb now 18.49.

The #spycraft trades will be managed as per the discussion last week. Hard adjustment points as soon as the short strike is breached or if in expiration week closed for a small loss or rolled. As long as we have 2 or more weeks left to expiration will back ratio.

#spycraft Opened leg 2 of…

#spycraft

Opened leg 2 of the IC. STO the 21 DTE 268/270 ccs for 0.24. Now have the 242.5/240.5 and 268/270 IC for 0.44 credit.

I will open another batch on Monday after some stocks are finally called out.

Every Thur. or Fri. add another rung to the ladder but with so many SPY expirations you can do M,W, or F.

Finally unraveling some trade adjustments…

Finally unraveling some trade adjustments over the last 14 weeks and bringing in some profits again. Have been flat for 3 months but a very nice week today 🙂

#fuzzy
EOG 110/110 with the back ratio ccs wrapped around it from the other day. With the slight pull back this morning I was able to sell 5 99 calls for 15 DTE for 1.97. What this did was lock in a no loss trade on the credit spread. Original trade was the 97/98 ccs. Back ratioed the other day. With todays trade I locked in a gain of $25 total if it closes at 98.02. Anywhere above 99 or below 97 that expands to $505. Basically inverted a butterfly but because of the gains from the back ratio now have that part of the trade risk free.
After the original post, rolled the 22 DTE 110 put out to 43 DTE for 0.45 credit. Cb now 13.96.
EXPE 120/120 125/126, 117/118 ccs and 118/120 ccs at cost basis of 9.43. Managing same as EOG. Any of the short strikes breached will delta neutral hedge (usually buy back half of the shorts).
GILD 70/70 cb 8.48. Will roll in 2-3 weeks.
MU 35/35 cb 14.80 and will roll 1-2 weeks
WDC 40/40 cb 19.11. Roll next week. This will be the longest to recover. Good thing I have a lot of time.
XBI 80/80 at 13.97 rolls in 2 weeks.
LNG 50/60 1 DTE rolled out 15 DTE for 0.48 credit. Cb 14.06
GILD 67.5/69 cb 8.90 and rolls in 2 weeks

#pietrades
LNG batch 1 61 CC should be assigned tomorrow at 57.70 cb
LNG batch 2 61 cc should be assigned at 58.53 cb.

#lizardpies
SQ should expire for full profit tomorrow. 667.50 profit on 3 contracts in 2 weeks. Finally an easy winner chicken dinner.

#spycraft
22 DTE 242.5/240.5 pcs for 0.20 credit. Small account so only 5 contracts. However, once batch 1 LNG expires this is one of the accounts I will re-dedicate to #spycraft with the mechanical management rules. Trying to double the 2 accounts in a year. Easy to keep track of since the new year.

I will be legging into an out of a lot of trades now. Anytime I can lock in a gain will do it. No guessing about what to do when short strikes are violated, they will be delta neutral hedged or shut down at a minimal loss, no questions asked. After looking at 4 years of #spycraft trades, controlling losses was the number 1 way to make this tactic profitable. The other way appears to be applying some timing by legging in and out of sides.

Being mechanical and following my own rules.

EOG 97/98 16 DTE credit spread was breached on the short side this morning. I delta neutral hedged it by buying back 5 of the 10 contracts at the 97 strike . Actually could have done 3 but was in a hurry. Price was 3.1 after I had sold them for 1.48 last week. The math is complicated because I now have a 5 short: 10 long ratio against a put #fuzzy but looks like anything above 99.04 and I break even or make money. If we drop I can always sell 5 again to take the ratio back to 1:1. Since doing that I am up $1635 on the credit spread part this morning.

I will be doing this with any breached credit spread going forward based on the TT research that showed violated credit spreads rarely return to the original range. As long as there is more than a week left to expiration. If inside that would roll first out to 21 DTE or so and then back ratio.

EXPE STO 10 of the 23 DTE 118/120 CCS for 0.40 against a 20 contract put #fuzzy.

Will start some #spycraft on Monday once my LNG and XBI cc are assigned.

#spycraft version 3.2 Ok guys…

#spycraft version 3.2

Ok guys (and gals). I did a bunch of research over the last 2 weeks. With the market volatility I wanted to restart these trades and also want the consistency back. My trading has been all over the map the last 14 weeks. I used to belong to a service that used this tactic exclusively but I dropped out after I thought I knew everything there was (wrong I still could not contain the max loss trades). Anyway, I was able to find results and trades going back to 11/14/14 to present. I had most from the service up until last year but was able to find a track record up to just a few weeks ago. I will spare you the details but the numbers are still impressive and include some wicked volatility spikes. I looked at every trade and if I had questions about the close used thinkback to see where prices were for opening and closing. Yes it was a lot of work but worth it.

Trades were placed every Friday during that time.

A total of 6 losing trades over that time but only 3 went to full loss. You can probably guess the dates (2 in August and 1 in December of 2015). Surprisingly Feb. 2018 did not result in a loss. The other losses were shut down early and I think that is what saved the service from having major losses. There were a few that were closed early either for a scratch or only a few pennies within the opening price.

Over that time the trades made 563.2% total returns.
78% annualized returns.
93.9% win rate, expected win rate was only 84% confirming what a lot of TT has proven. There is your “edge”.

So anyway I am restarting these in 3 smaller accounts, all under $7500 and one with only $1500 with the goal of doubling the account yearly.This most recent year they had 299% returns. I plan to manage it very mechanically but there are other options for those that want to do it differently.

Here are the rules and some guidelines to be consistent and prevent the big blow outs that can happen with credit spreads/Iron condors.

1. This is designed for SPY but would also work on SPX or /ES for those with larger accounts. However other tickers may even be better. I am sure IWM, QQQ, DIA would all work. I will use SPY.
2. 1 trade opened each week, usually Friday but since I am off Thursdays that will be my trade day.
3. Most of the time open an IC with short strike deltas around 16. However may leg in when the market is whippy.
4. DTE 21-56 but most often will be 3 weeks to 5 weeks. I plan on starting 21 DTE.
5. Run it as a ladder, each week will add a new rung.
6. 2-5 points between strikes. Need to have a little room there for adjustments but will also bring in more credit but keep the risk reasonable. The service mostly used 3-4 wide on the strikes. I will use 3 at first to not use up too much margin.
7. Keep enough cash available to make adjustments or close early. You will probably need enough cash to either buy back half of your shorts or add half as many long options between the strikes.
8. Delta neutral hedge when needed to create a back ratio. I personally will be using 2:1 but a ratio of 3:1 or even 4:1 may work depending on how early you catch it.
9. Expiring options that look like they really will close OTM will be allowed to expire thereby saving commissions. However, a lot of the time they will be closed early if there is enough profit.
10. Options that are close to being ITM will be rolled to new series.
11. There are probably 3 ways to control risk when the short option goes ITM but I am using a hard rule for this now. As soon as the short strike is violated I will do 1 of 3 things. This based on some TT research that showed violated credit spreads return to their range less than 2-20% of the time. If the strike is violated, you are probably in a trending/directional market at that point. These also depend on how much time to expiration. If there are a few weeks will go directional. If in expiration week will just shut it down.

A: buy back half of the short options creating a 2:1 back ratio. Then if we keep moving, you make some money from
the directional kick.

B: If I don’t have enough cash for that then I will just close the violated spread. In TOS you can probably set a
conditional order that would get you out for a 1.5-2 x the credit.

C: Add some long options between the strikes in same ratio as A, 2:1. This may be cheaper than buying back
the short strikes. Since SPY has 0.5 strikes would go 1.5 strikes from the short on a 3 point spread.

That’s it. We know this works, just have to control the losses and I think that is the key to success with this tactic. Let’s see how it works again with the hard rules for adjusting.

Credit spread tweaks

EOG STO the 21 DTE 97/98 ccs for 0.23. Cb now 14.41 against a 120/120 and 125/126 put #fuzzy
EXPE STO the 21 DTE 117/118 ccs for 0.20 credit. Cb now 9.43 against a 110/110 put #fuzzy.

It rained over the weekend and my family was busy so I watched a bunch of tasty trade re-runs. 2 things I forgot about. They did a section on defined risk and looked at the number of times tested credit spread returned back to the level you placed the spread. It was less than 2:10 times, actually I think as they looked across multiple occurrences and it was much lower around 2%. So gave me an idea for credit spreads and #spycraft which I will start up again next week after some CC are called away.

I will be very mechanical in adjusting credit spreads now. As soon as the short strike is breached, I will delta hedge it to neutral and create a back spread. Odds improve that if it is breached will not return to that level so at that point you have a directional trade and might as well take advantage if it.

What this means is that if the short strike is breached, I will buy back half the # of shorts calls/puts as the original credit spread thereby creating a 2:1 back ratio. Then if we keep moving in that direction you get the boost from the directional kick.

Probably best to set these up 21-45 DTE so you have some room. A weekly probably would not work as well once ratioed because of the gamma effects close to expiration.