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Trade for a Living
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Trade for a Living

 
TampaFL
 
Trading Experience: Master
Platform: TWS
Favorite Futures: ES
 
Posts: 94 since Oct 2017
Thanks: 29 given, 154 received

June 27 Recap

On the options side, a modest up move in ES and a slight decrease in implied volatility gave me a decent day. Up about 410. I sold a EW4N9 2725/3050 strangle for 12.90. I also rolled a EW4 3100 Call down to the same 3050 strike for a Net premium of 2.70.

On the day trade side it was a good bad day, or a bad good day, depending on how you look at it. The trade started off very well, and was up about 800 in fairly short order. Then it started giving back, like a tire with a slow leak. It wasn't plunging, but it wasn't doing much for me either. After watching for several hours, I got tired of it and decided it would be a good time to cut the lawn. Plus it was only 94 degrees outside, about as cool as it gets here this time of year. Now I've been told that the market can actually carry on without me watching it, but I didn't want to test that theory, so I closed out the trade. Just went market and took a little slippage. Finished up 475 for the day. I also did the exact same trade in my new ninja account and due to slightly different fills ended up 496 for the day there. Not bad, right? Well, two hours later I'm done with the lawn, come in to see what I missed and find that my trade took off and would have finished positive 1909 before fees and commissions, about 1850 after.

I probably should have hired somebody to do the lawn.

Exact numbers tomorrow morning.

The following 5 users say Thank You to jba1962 for this post:
 
 
TampaFL
 
Trading Experience: Master
Platform: TWS
Favorite Futures: ES
 
Posts: 94 since Oct 2017
Thanks: 29 given, 154 received

Final Numbers 6/27

Options P/L: +406.82 Month: -1238.43
DayTrade P/L: +474.72 Month: +7164
Premium Sold: 840
Premium Paid: 60
Open Premium: 4782.50

The following 2 users say Thank You to jba1962 for this post:
 
 
TampaFL
 
Trading Experience: Master
Platform: TWS
Favorite Futures: ES
 
Posts: 94 since Oct 2017
Thanks: 29 given, 154 received

June 28


Option Side: Was relatively calm for most of the day. I am now delta negative, so I was down early in the day, but as the day wore on, the theta worked for me at a much greater clip, and by 3:30 I was up about 300. Then BAM! ES spiked from 2935 to 2955 almost in a flash, and the move was more than I could overcome. Looks like I'll finish the day down about 190 there. I sold a EWN 2700 Put for 7.50 in the morning, but will need to sell more Puts and/or roll Calls Monday if there is follow through to the upside. That was all I sold, and I did not buy anything back. If I sell new Puts Monday, I will buy back some of the existing Puts in the account.

Day trade side: Another good day. 11 winning days in a row, which is pretty close to the all-time record (I think it's 13). The trade gradually worked in my favor all day, and eventually got up to around positive 1000. At that point, I closed half the position, and the trade meandered sideways for a while. When the big spike came, I started taking on water. I was short MNQ and it caught fire. I bailed as quickly as I could and finished positive 783. And had I stayed, I would have given up a large chunk of that as MNQ continued to run, outpacing my longs.

All in all, a good day, a good week, a good month. Exact numbers in the morning.

The following 3 users say Thank You to jba1962 for this post:
 
 
Market Wizard
OC, California, USA
 
Trading Experience: Advanced
Platform: IB/TWS, NinjaTrader, thinkorswim
Favorite Futures: stocks, options, futures, VIX
 
shodson's Avatar
 
Posts: 1,916 since Jun 2009
Thanks: 506 given, 3,508 received

A few questions...

On the option side, are you always selling strangles/straddles? Or do you ever sell just one side if you have a directional bent?

And why did you sell on the EW (ES end of month)? Because it's close to expiration (end of June)? Do you normally trade close to expiration?

I ask because I like to sell strangles on SPX on expiration day (every Mon, Wed, Fri) near the open, and just stay in the side that's decaying away quickest, usually the side that's on the opposite the market direction. However, the market can whip around and gamma is high on opex day so things can go bad quickly, as you probably know. Sometimes I think I should trade long gamma but on sideways days they will decay to $0 so I like trying to capture the last-day theta decay on whichever side will pay me.

Also, in the futures spread side, so your spread is long one market, short another market? And not different contracts of the same market, like Sep ES vs Dec ES, right? If the spread is narrowing at what point do you decide you are wrong and should get out? Just watching P&L?

I bet the sizing is a bit tricky, right? So if you are going to buy MES and sell MNQ against it, what is the ratio of contracts you use there? I imagine there's some important algebra to do there (point value, tick size, etc).

I don't like looking at charts either, or at least I like to avoid them as much as possible...

Keep up the good work!

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TampaFL
 
Trading Experience: Master
Platform: TWS
Favorite Futures: ES
 
Posts: 94 since Oct 2017
Thanks: 29 given, 154 received

Final 6/28 Numbers

Options P/L: -108.92 Month: -1347.35
DayTrade P/L: +783.12 Month: +7947.12
Premium Sold: 375
Premium Paid: 0
Open Premium: 5265

The following user says Thank You to jba1962 for this post:
 
 
TampaFL
 
Trading Experience: Master
Platform: TWS
Favorite Futures: ES
 
Posts: 94 since Oct 2017
Thanks: 29 given, 154 received


shodson View Post
A few questions...

On the option side, are you always selling strangles/straddles? Or do you ever sell just one side if you have a directional bent?


In general, and in theory, yes. I try to stay mostly balanced with a slightly positive bias. In reality, it doesn't always work out that way. Earlier this month, when ES shot up like a rocket, it was impossible for me to stay ahead of it. I had negative delta even though I kept selling Puts and rolling Calls. And at some point, you just have to take the loss and re-balance - otherwise you risk being so loaded up on Puts that even a small adverse move will do serious damage. Better to take the loss and move on. As for directional bias, I try very hard to never ever have an opinion about the market. I know that, long-term, there is an upward bias, and I do skew my positions to be slightly positive delta if possible, but I try to trade with the mindset that I have no idea what's going to happen. And truthfully, I usually don't.


And why did you sell on the EW (ES end of month)? Because it's close to expiration (end of June)? Do you normally trade close to expiration?


The Put I sold yesterday was EWN (July). I generally sell 4-6 weeks out. For me that's where I can best manage the volatility and delta without, as you say, incurring Gamma risk. I will occasionally sell shorter term options if I need to for re-balancing purposes, but other than that, I initiate positions with 4-6 weeks of time until expiration.


I ask because I like to sell strangles on SPX on expiration day (every Mon, Wed, Fri) near the open, and just stay in the side that's decaying away quickest, usually the side that's on the opposite the market direction. However, the market can whip around and gamma is high on opex day so things can go bad quickly, as you probably know. Sometimes I think I should trade long gamma but on sideways days they will decay to $0 so I like trying to capture the last-day theta decay on whichever side will pay me.


I have tried this approach before. The super short term is very appealing to me because of how much it limits risk. But I lost when I was Net Short. So I switched to Net Long, and I lost there too. It just doesn't work for me. And I think you may have just explained why. You said "just stay in the side that's decaying away quickest". There probably is profit potential in this approach if you have better than average skills at reading direction, and know when to pull the plug on one side. As I said above, I not only do not possess those skills, I actively stamp out any thoughts that might pop into my head that I know what's going to happen in the next (minute, hour, day month).


Also, in the futures spread side, so your spread is long one market, short another market? And not different contracts of the same market, like Sep ES vs Dec ES, right? If the spread is narrowing at what point do you decide you are wrong and should get out? Just watching P&L?


Different markets, not different expiration months. I put on the trade in three parts, so it is self-correcting until the third leg goes on. If I buy something because it's the strongest, and it becomes the weakest, I will close out the entire previous trade before initiating the new one (what I call a "negation"). So I pay very little attention to the trade until that third leg is on. I always have a calculated "drop dead" spot if it goes against me. That is volatility based and is always a weird number (yesterday is was 934.26). I usually round up (probably should round down) and so I was using 1000 as my stop yesterday. If the trade is going against me, I will let it run until my stop is hit. I don't try to manipulate the trade. The tricky part is protecting profits. I don't want to let a $1200 winner turn in to a $1000 loser, so I will exit before that happens. I have some guidelines I use, but for the most part I go by feel. I absolutely could improve in this area and am actively researching better methods. At times I will hedge my bets so to speak and close 1/2 or 1/3 of the position and let the rest run. And when I get totally uncomfortable, like yesterday just after 3:30, I just bail out completely. If I reach a point where I don't want to be in, I exit, and I never second guess myself there.


I bet the sizing is a bit tricky, right? So if you are going to buy MES and sell MNQ against it, what is the ratio of contracts you use there? I imagine there's some important algebra to do there (point value, tick size, etc).

Absolutely! My 'system' (I really don't like that word) is extremely simple and straightforward. Position sizing is the only complicated part, and the math is pretty complex. That's why I jumped on the micros with the added granularity. I actually used to record my results with the position sizing my numbers said I should have. But of course, I couldn't really sell 1.2 ES, or buy .6 NQ or whatever. Now I can.


I don't like looking at charts either, or at least I like to avoid them as much as possible...


Agreed. I admire people who can read charts, but to me the only thing they are good for is showing you what has already happened.

Keep up the good work!

Thank you.

The following 2 users say Thank You to jba1962 for this post:
 
 
TampaFL
 
Trading Experience: Master
Platform: TWS
Favorite Futures: ES
 
Posts: 94 since Oct 2017
Thanks: 29 given, 154 received

July 1 wrap

Options: It's quite a day when the market rallies strongly and your calls don't go up. Makes for a good day. My Puts plunged and the Calls didn't, thanks to a nearly 15% drop in the VIX. A lot of stored up volatility finally came out and I finished up about 1490 for the day. I did not initiate anything new, but I did buy back several Puts for a nice gain, and I sold 11 of the cheap Calls that I had purchased, for a nice loss. All in all, a good day, and I will look at all the numbers, make some assessments, and then probably start putting on some more premium tomorrow.

Day Trade: A good day here too. After the 2nd leg, the market went immediately against me and I was quickly down over 500, but just as quickly it turned around and shortly after the 3rd leg, I was up 1000. At that point, I closed out 1/3 of my position. Then it went against me, down to about +600. Then it popped back up to 1000, so I exited 1/3 of the remaining position. And again, it went against me. A whole lot of time could have been saved simply by exiting the entire position the first time it crossed 1000. The high water mark was 1151 and I finished at +831. I'll take it. 12 winning days in a row, one shy of the record. (I'm not actually certain that 13 is the record, but it sounds about right, so I'm sticking to it.)

Have to decide my trading schedule for the week. Do I want to be in Wednesday's short session? Probably not. Probably should do nothing on the day trade side after tomorrow, but unemployment report on Friday still looms. Hmmmm...

Exact numbers in the morning

 
 
TampaFL
 
Trading Experience: Master
Platform: TWS
Favorite Futures: ES
 
Posts: 94 since Oct 2017
Thanks: 29 given, 154 received

Final 7/1 Numbers

Options P/L: +1520.68 Month: +1520.68 *Total: +173.33
DayTrade P/L: +831.29 Month: +831.29 *Total: +8778.41
Premium Sold: 330
Premium Paid: 385
Open Premium: 3670

* Total is since June 1, since I started this journal in June and June 3 is when I switched to using the micros in the daytrade portion.

The following 2 users say Thank You to jba1962 for this post:
 
 
TampaFL
 
Trading Experience: Master
Platform: TWS
Favorite Futures: ES
 
Posts: 94 since Oct 2017
Thanks: 29 given, 154 received

July 2 wrap

Options: Most of the day was very calm, flat with shrinking volatility. The premium was just sucking out. At 3PM, when I was basically done for the day, I was up 1200. But the last 40 minutes of trading saw ES rocket up yet again, and I only ended up about +400 for the day. Of course that 800 isn't lost as the numbers are in a constant state of flux until a position is closed. I look at it as 1200 of my open premium moved into my Net Liquidating Value, and then 800 moved back to where it started the day. Not much on the sell side, as the low volatility, great for my existing options, makes good sell values hard to find. I did sell 1 EW1Q Put for 9.00.

Day Trade: Another good day. 13 winning days in a row. I'm calling that a record tying day. My first leg got negated by my 2nd leg, but the loss was only $121, and I was never down more than 350. Once I got the 3rd leg on (leaving me with two legs), I never added again as the trade was working quite well with just the two legs. When I got to +1000, I closed half of what I had, effectively leaving me with 1 full leg. At 3:00, I wanted to watch the USWNT soccer game (not a big soccer fan actually, only watch the World Cup), so I closed half of what I had left and the trade really didn't do anything, even with the big finishing kick. High water mark was +1151 and I finished +1042 for the day.

Still have not decided what to do about tomorrow. Obviously I will monitor the options, particularly Calls as the day before a holiday is generally an up day, and then Friday with Employment numbers will probably spark another big rally. Seems possible, likely even, that we will end the week well in excess of 3000, which will necessitate some positional adjustments. But who knows? Not me, so I will wait, watch and react.

Exact numbers in the morning.

The following 2 users say Thank You to jba1962 for this post:
 
 
TampaFL
 
Trading Experience: Master
Platform: TWS
Favorite Futures: ES
 
Posts: 94 since Oct 2017
Thanks: 29 given, 154 received

Final 7/2 Numbers


Options P/L: +423.58 Month: +1944.26 *Total: +596.91
DayTrade P/L: +1041.83 Month: +1873.12 *Total: +9820.24
Premium Sold: 462.50
Premium Paid: 0
Open Premium: 3707.50

* Total is since June 1, since I started this journal in June and June 3 is when I switched to using the micros in the daytrade portion.

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