Sunday, March 20, 2011

3/20 Daily Summary

A couple of quiet days, I'm considering getting into the APR position early Monday. Looking at the charts as we speak, it seems like the down-side draft is not quiet over yet. We'll see.


Anonymous said...

Hi Gustavo
Good to hear you took a little time away from the market. We just took our kids on a little canoeing, horse riding, hiking trip to SE Oklahoma where we live. It was a good time, and great to keep the priorities in focus.
I already know I'm not going to trade this month. I need some more time to read, reflect and practice.
Last month I made one very good decision.
1. I noticed that the volatilies were very low early in the month, and I sat on trading at first. This gave me some more room when volatily expanded.
Unfortunately I made two poor decisions which ultimately did not cost me, but this was more to good fortune than good planning.
1. When volatility rose, I tried to sell an SPX iron condor. But I was having trouble getting filled with the bid/ask so wide. So I thought I would try to leg into the condor. This was a disaster as my SPX 1245/1255 credit bull put spread filled, but my call side never filled.
2. I sat on the bull put spread into and through option exp week, thinking the market would not be able to penetrate that low. Ultimately my position was saved, but it could have gone the other way, and this is not my style of trading.
When you are able please describe how you open a new position, and close existing positions. Do you trade your iron butterflies as a unit, or try to leg into the trades. Do you set your initial price at midpoints? How long do you wait before lowering your price.
Thanks as always, and good luck

Gustavo's Trades said...

Hey Dave, I think I'll sit it out APR, as the market has yet to calm down.. last Friday I was looking at an iron butterfly and this Monday it already blew through the top side with Today's move.. good thing I did not get in..

I will take the time to read, reflect and evaluate my time and other commitments, with a new baby and extra responsibilities at work, the iron butterfly is proving to be a challenging strategy for me as it requires a good amount of time setting up contingent orders and evaluating the position's adjustments..

In regards to your question, I usually do NOT leg in an iron butterfly, if you think a Condor was dangerous, doing that on a butterfly is simply crazy! I enter as one single order and be patient about execution. On the NDX I find that I get filled well within 10 to 15 cents from MID.. When I have time I start a few contracts at a time and keep raising my order so that it gets filled at a higher price if the market moves against me as soon as I enter the first contracts..