This is a VERY important article to read for any one doing #VXXGame trades. I first learned the game from @optioniceman in December 2012 and made great profits for two years. However, you do suffer through pain and possible margin calls on big volatility events. After white-knuckling October 2014, I scaled back and participate on a much lower scale now. My profits have been smaller as a result, as the trade has remained stronger than ever since that event.
Although I have long understood the basics of this article, I still learned some new perspective by reading this today. Check it out. Ask questions, start a discussion.
LMT #Fuzzy from just 8 days ago was up over $2,000 net today. Rather than roll, I decided to close it all and look for a new opp to reset.
CELG I rolled yesterday locking in $750 for the week and selling another 1.00 for next week, my “Stage One” net debit is now only $0.63.
JPM I rolled on Wed before FOMC locking in $550 for the week and selling .95 for next week. My “Stage One” net debit is now only $1.04
NUE got hit with some bad news this week on guidance, took the stock down yesterday but just beyond the synthetic level. Premium is slow to come out of the short calls today, in latter half of the day I will place new position for next week and just let this week expire. That will bring in $560 for the week.
IWM: Opened yesterday, no roll today
TWTR: Up nicely, but no roll for this week
SPX: #FuzzyBear Rolled earlier this week. I have realized income of $7100 on this in just 8 days. Stage One has gone from $40 to $30. Much more to go! Like @fuzzballl said earlier this week…just keep chipping away at it.
I’m looking at #Fuzzy debit recovery in two stages, Stage One is the trade debit recovery, then Stage Two is the spread risk recovery.
@vxxkelly did a recent trade on this and it reminded me it’s been on my watch list. There’s a lot of block trades on it today, and some calls being bought. So I did an unprotected #Fuzzy . I did a Mar 70/70 synthetic and sold Dec 22 71.5. I will add protection after an up move, for a better price. In a squeeze right now.
Didn’t capture my trades from yesterday, but a couple highlights:
1. Rolled the JPM Fuzzy hedge into strength to collect more on the next week
2. MAR #JadeLizard closed for 50% target
3. My SPX #FuzzyBear is troublesome. I didn’t set it with correct timing, so now I’m doing battle. I took off one short call on the synthetic turning it into a back ratio like @hcgdavis mentioned yesterday. I’m also using the AS-BB indicator for legging in and out of the hedge puts to get a few extra $$ on it.
#Fuzzies need rolls as Friday approaches: LMT, CELG, NUE. I’ve got substantial net profit on LMT so may close it all rather than roll.
Not sure if anyone has seen our headlines lately. Long story short…technical glitch allowed pilots system wide to drop trips in December that normally wouldn’t be allowed. Now we are looking at tons of open flying that nobody seems interested in even after the company offer of double time to pick them up. I believe the company is downplaying the severity of this to preserve holiday bookings…
I could be totally wrong too. I hope so since I’m on call over Christmas and New Year’s…LOL But…if we get a little news story about how maybe everything isn’t as it may seem, I’m going to take a low risk shot at some downside using the @vxxkelly butterfly hedge. Tiny risk for possibly decent reward. I don’t see an implosion but possibly a small pullback so love the idea of trying to do it for a credit.
Have to double check the numbers when the market is open but right now the 49/47/45 or 48/46/44 looks like pretty good risk/reward.
I’m not much of a regular old butterfly guy (other than iron butterflies for earnings) so maybe I did something wrong. The SVXY put butterfly that @vxxkelly and I were discussing as a #Hedge didn’t do much during the selloff Friday. I monitored it as SVXY dropped all the way down and then all the way back up and the thing was never profitable at all. Was it because it was out in Jan? Do these types of trades only work on much shorter time frames? Did I (quite possibly) screw something up?
Here was the trade:
SVXY JAN 19 2018 110.0/105.0/97.5 Put Butterfly @ .22 credit
Bought 5 110 puts
Sold 10 105 puts
Bought 5 97.5 puts
Similar to @vxxkelly I was away from my desk during the crucial hour when the market was at its lows of the day. Of course that’s the only period of time I missed all day. Still was able to get a few trades off.
$SVXY Mar 16 45 put @ 1.15
$SVXY Jan 19 65 put @ 1.19
$UVXY Jun 15 60 call @ 2.10 (highest strike)
$UVXY Mar 16 70 calls @ 1.00
So I’ll either be able to sell some more if the market fades again, or the market keeps moving up we’ll be seeing Iceman’s billboard. 🙂
$SPX STO 11/17 2585/2560 BECS @ 12.70 and then BTC during the day @ 10.00. I keep closing profitable trades early and let losing trades lose more. Not sure there is a connection. Mmmmm Thank you for the idea @jeffcp66
$SPX BTC 11/24 2585/2560 BECS @ 13.40. STO 11/10 @ 18.50 Thank you @jeffcp66
$WMT STO 11/17 95/90 BECS @ 1.25
Rolled UVXY JAN 19 2018 20.0 Puts to JAN 18 2019 10.0 Puts @ 1.47 debit.
Weekly puts had brought in 2.87 so leaving 1.40 in credit on these which caps my gains to the downside at 8.60.
So…synthetic short at 30.00 with max gain capped at 21.40 points with UVXY below 8.60 on the downside.
21.40 max gain minus the cost of the trade of 16.30 leaving a gain of 5.10 per spread. Ok but not great. It was done in a big enough size to definitely make it worthwhile. I think @vxxkelly has the right idea on this one…set it and look at it again in a year without messing with any front month positions.
Hey…what can I say?…LOL It was an experiment that hopefully everyone that tried it makes a little with almost zero stress in the trade!
$SPX 2285/2310 BUPS
$SPX 2265/2290 BUPS
$SVXY 140 put
A little late posting. Friday a great golf day. Everyone have a pleasant summertime weekend even though it is spring.
I am not a good teacher, so bear with me..The chart has the lines tool I spoke of earlier..and my pivots displayed..
The method used is to measure the opening YM candle, and draw the green/red lines for open range…
that allows the 2 gold lines, for expected open move and 9:30 reversal support to be drawn…as well as the the 3 extended target lines above , or below..
opening candle opens 15-20 points..end to end
Lines are drawn
YM then moves 30-50 points (20040-20070 today )
exit the trade at a target line or pivot bounce
The futures indexes will almost always reverse at 9:30am..
if the reversal stops at the Gold Line, YM has a good chance to continue back up to a higher target
if, like today, it breaks down below the gold line for 30 mins or so, and then tries to move up..it will usually top out at the previous target, and then sell off the target line , back into the open range area..like this mornings -57 point move..
The 9:30 reversal/continue/sell off will usually go until 11:00, when dead time for lunch takes over…take your lunch break
11:00am – 12:30/1pm Dead time..
12:30/1pm after lunch, traders come back and make a small push up/down, usally good for 20 -40 points most days..after which it slides sideways into the 2pm pro hour..I dont play the 2pm – 3pm pro hour..I am a beginner, learning to trust my system..I make my 40-60 points between the open and lunch zone..
The above is what I was taught in the Futures class I took..its one of many trade methods..I like it because it works consistantly, and its easy to learn..I am good at trading fib lines and PP levels..this method does the same..for a futures trade..
Most of us here trade for income..be it selling options, or futures..Futures is by no means easy..I am getting better at it..I set easy to reach goals by which I can live by the below..
1. set your exits and entries…ahead of time
2. do not hesitate to enter or exit..never 2nd guess your discipline or stops
3. wait for the moves and lines and validate with the indicators..when in doubt, get out..
My Plan goals for the YM;
40 points daily..
5 contracts per trade
20 point stops
risk = 500.00 ( 25/point x 20 points )
40 points daily = 1000.00 weekly/4000 monthly
Today I made 70..it doesnt seem to be a terrificly difficult goal..the more I learn, hopefully the better I’ll get…
Bought to close $STZ Feb 17 135 puts @ .25. Sold for 1.30 on 1/5 (thanks again @vxxkelly).
Taking my 80% of available profit off the table.
$KMI 2/19/16 13.50 PUTS @ .38
$UVXY 3/11/16 90.0 CALLS @3.45 Thanks @vxxkelly
$VXX 3/4/16 37.0 CALLS @.75
For the first time since August 4th, $UVXY just notched a new all-time low by breaking below 24.34. Four months is quite a stretch for this dog to have another day.
$VXX is still over 15% above its August 5th all-time low of 15.48.
$SVXY has once again been the laggard, as recently discussed by @vxxkelly; at 61.00 it is 37% below its June 24th all-time high of 98.13.