Friday, July 9, 2010

07/09 Daily Summary

As we traded higher Today my contingent order got triggered to sell my AUG put, I’m officially condorized and there is not much left to do on the trade but document the lessons learned: (1) First and foremost, whenever you get a gift of fast profits, take them, I sure did so on my live JUL position, and while on this paper trade I saw 6% ROI that I would again cash out if it was a live trade, since I wanted to keep my practice on I let the trade run. (2) Second big lesson is to adjust in 2 steps: hedge first, then cut and roll the next day (let the market show its hand a little bit). (3) Don’t let your self get caught up with positive vega, make sure you do whatever you can to balance out those long puts because once the vols drop back down you want to be in a position to really recover your P/L, on this paper trade month I let my puts in the trade for way too long, they ate away my profits. (4) Last but not least, I want to make sure I have time during the evenings and early mornings for a fresh and focused review of the position, this being a paper trade I was way too relaxed (paper money is quite different from real money).