This is just part of a larger spread sheet. I use this to keep track of info.
Open/Close is just noting if I open or closed the option. If Qty (Quantity) is + I have bought the option.
If Qty is - I have sold the option Price is the $ value of the transaction.
To get unrealized gain/loss you just do a sum of the appropriate columns. (Actually I have additional columns with
formulas that do the accounting.) At this time most all of the Gain/Loss is unrealized. Notice that I closed out the 29 P and the 75 C.
This was listed to answer the question of prices paid. (Column 6.) Hope this helps.
I noticed that your win percentage is 97.6% which is pretty close to the expected result of selling at delta of 2% OTM.
If you sell ES pus at 2.00 at about 80 days. The delta is just about 2%. As the calls tends to be nearer the price, do you also intend to sell calls at 2.00 given that the deltas for 2.00 calls for 80 days is 5?
During 2014 for ES
a. did you also sell about the same numbers of calls as puts?
b. What deltas do you you normally sell at?
c. How many days out did you sell the calls at?
Well the price blew right past my stops and I was forced to exit my position this morning and eat a pretty substantial loss. Account isn't blown up but it's a really nasty way to start my first trade. I sold my short calls for a loss but kept the calls I bought. If this rally continues I can sell them and offset the loss a bit more. Time to lick my wounds, understand what I did, and try again.
Wrong expectation to have IMO..2 delta/98% OTM is if you hold til expiry no matter what, and does not consider premium at all. You could theoretically be blown up/negative net liquid value during the trade but end up reversing coming into 1c outside the strike, and it is still considered into the 98% OTM.
So to achieve 97.6% win rate, while using a stop limiting losses, is much more impressive than any delta can indicate.
It is interesting that you have never sold ES calls. I have watched the videos by Karen The Supertrader interviewed by Tom Sosnoff. She makes substantial profits from selling both naked calls and puts on the SPX over a number of years. During certain years when the index was basically moving up she has found it challenging. Nevertheless she has continued to sell both calls and puts. It is certainly been worthwhile for her to do so.
Well, here's the results of my first trade aaannndddd it didn't go well. Total premium collected $960 on CL. Trade was 27% out of the money and t turned on me inside of 30mins on Friday and the first 45mins on Monday morning. Oil shot up a whopping 13% and my mental stop was hit. I executed my trade but the bid/ask was not in my favor and viola...I got creamed. With the ratio spread I contained the damage but in the end I ended up down almost $3k.
The experience left me a little
It really sucks that this is how I have to start the experience but I did learn a lot and I'm taking that information with me to the next trade.
1. The position was too large relative to my account size. My gut told me but I ignored it, not again.
2. I need to sell further out of the money. A .04 delta was just not enough. After reading this thread a few times the number should be closer to .02 or .01. copied and pasted datahogg's post on the same thread to get an idea of just how far out. You still probably haven't noticed the rally . Congratulations man...I need to be more in tune with you and ron99's methods.
3. I need to diversify soon. My original goal was to trade one commodity at a time until I understood the fundamentals well and then add others. Although that sounded good it lends itself to big issues when a single trade goes against me. This is especially true as I'm making much smaller trades.
4. Only aim to make 3%-5% per trade. On this particular trade I tried to go with 10% and that just ended up burning me. See point 1.
5. Get a broker that won't nail me on margins. One of the main reasons I couldn't sell a strangle on my original position, which would have mitigated my losses even more, was because OX was adding so much additional margin to do it. This didn't leave me with the residual 3x cash. I've since opened an account with DeCarley and will see how that goes. I could have simply gone with a smaller trade but didn't...and that again goes back to point 1.
6. Losing hurts..not getting back in the game hurts more. I can see how easy it is to just quit and go back to my career and life but then I would learn anything and I know I can learn and be successful at this.
I'm hoping to get some feedback from the more seasoned people here when I structure my next trade. Thanks all.
Last edited by rsm005; February 3rd, 2015 at 01:32 AM.
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