Monday, February 28, 2011

2/28 Daily Summary

No adjustment Today, I'm gearing up to defend the position against an up-side movement. Right now the down-side is well covered and hedged. I had a run with TOS margin calculations Today. It is pretty complicated to explain but the bottom line TOS is using a new margin tabulation method that locks down more $$ out of my account than I'd expect. So Today when I was planning to adjust my trade it wouldn't let me do and I had to eliminate all my cash-secured put positions and call TOS to free up my capital so I could at least enter the contingent orders.

Bottom line: While in the past their margin was equal the max amount at risk in the trade, their new method does some weird calculation and pairs up my trades in a strange way, this gets complicated because I had a partial butterfly roll, so it is locking down more money than I could potentially lose if we were to expire beyond my B/E. I have to review my trades and adjustments now for the impacts on margin as well as the impacts on total capital at loss. More complexity to take into account as I want to utilize the most of my capital and use cash-secured puts or covered call on the cash that is sitting in the account.. in order to maximize I need to study this further..

Friday, February 25, 2011

2/25 Daily Summary

Which trader are you? The guy on the right or the one on the left? Always go back to this video when we enter the roller coaster:

Choppy action in the last 4 days to say the least. I did not touch the position Today as it did not go above my contingent order level. For now I'll enjoy the weekend, it certainly looks like slippery slope if we keep going higher, on the positive side I have a good amount of negative vega, which will help if we go higher or stay quiet and the vols deflate. If we keep rising I might sell the further out put and add a long call to reduce my deltas while still keeping some put protection. Today's action was performed in low volume, so this kept me happy without making any drastic adjustment yet.

For now, enjoy the weekend, don't drive too much as oil prices are rising.. :)


Thursday, February 24, 2011

2/24 Daily Summary

Today I did a partial cut and roll on my position, moved 3 of my 5 put spreads, the goal is to watch the market Tomorrow morning and continue to cut and roll if we're showing signs of stabilization. I may leave things along till Monday just to be on the safe side as I rather not initiate spreads right before the weekend. Either way, this is a matter of watching the market and increase the theta slowly because of my current P/L being past my 1:1.5 level, so want to keep that in check.

Wednesday, February 23, 2011

2/23 Daily Summary

Continued down-side pressure hit my two adjustment levels at the down-side, the second put took a big hit as the market pulled back from there, I'm hesitant to cut and roll first thing in the morning as I would like to see this market settle down, for Tonight my plan is to leave the position untouched through the day Tomorrow and re-evaluate at end of day Tomorrow. I got too upset with the P/L hit and it might just be an over-pricing on my short calls due by the fast activity in the market, so I rather let it rest a day before taking actions in a hurry..

For now the position is relatively well hedged, need to see what Tomorrow looks like. The next step from here is to cut and roll the short put spreads and add a new iron butterfly to increase theta, selling back those puts to balance out the deltas. I may start cut and rolling Tomorrow AM, depends on what the market looks like

Tuesday, February 22, 2011

2/22 Daily Summary

Lesson learned: While using a debit spread helps you if the market keeps going in the direction of the debit spread (in this case, going higher), it hurts really bad if we reverse quickly. In this trade, the debit spread took a double hit, one by vega and the second one by volatility. A single call would keep more value (about 3%), no major deal, just a lesson learned this month.

The trade took a hit as the market sunk during the day. I am very glad to report I didn't have to touch the position as the contingent orders took care of adjusting and protecting my capital. The Debit spread was sold on my first order and the position is still in play with a small P/L slippage given the huge jump in volatility. Should we continue my game plan is to hedge, cut and roll the vertical put spreads and add another smaller butterfly. Mainly stay in the game, on the positive side, there is time to recover the trade.

Friday, February 18, 2011

2/18 Daily Summary

The position is looking good once again, we've backed off from the upside just a little bit. Looking forward to the weekend of relaxation. Looking forward even more for a quiet Tuesday. Cheers!

Thursday, February 17, 2011

2/17 Daily Summary

No major change Today, I am keeping the same game plan from Yesterday, as long as we continue to trade in this tight range we'll be just fine. So far the conditions are not of a storm, just regular market activity.

Wednesday, February 16, 2011

2/16 Daily Summary

As we traded higher Today I used a vertical debit spread (in lieu of the long Call) to re-align my deltas. I've been back testing the debit spreads in lieu of long calls or puts and the results were good enough I started to incorporate it on my trade. The contingent order kicked in without an issue and filled at mark + 0.25 cents soon after it was triggered, so far so good.

Tuesday, February 15, 2011

Question to readers: How to get a job as a trader?

As I couldn't sleep last night, listening to our newest addition to the family, Tiago, I kept wondering: How nice would it be to actually trade as a job. I have been trading on my own in a part-time mode for quite a while (started w/Forex late 2005) and simply put it, I love this business. I was wondering about doing a career change and actually make this my job/career.

How would one get a job or start a career as a trader?

Would any of you like to share your thoughts, suggestions, comments, etc? I would appreciate your feedback.

02/15 Daily Summary

Ok, second day in the trade, so far so good, not much has changed except that we were trading lower intra-day Today and pulled back up to the same levels as Yesterday. Today I have updated my trading log and have posted the full plan as well as the monitoring dashboard, I've been doing these for so long that trading without the dashboard and the evening game-plan routine seems weird even if for just a day. Same is true for the blog.

One of the things I'd like to call attention to is the fact we have had a few "quiet" days, as you can see on the daily spikes and the intra-day activity monitoring chart.. I am looking forward to riding at least another 10 days like that so I can get out of MAR. :)

Monday, February 14, 2011

2/14 Daily Summary

Today I started my MAR/11 position, don't have much to report, just that the contingent orders are in place. I'm looking to use Debit Spreads in addition to long calls or puts as part of my adjustments, the biggest benefit is the reduced theta hit the debit spreads provide, the drawback is their execution (remain to see how they trigger via contingent orders) and they're more expensive than the long calls or puts.

I have also started a deep practice process by back testing my trades during the down-time to review and make sure I'm watching the right factors when making the adjustments. Also to give me enough background into the best way to handle the positions when they get under fire.