Wednesday, April 6, 2011

4/6 Daily Summary

Hi everyone, it seems not a lot of movement in the past few days, that's only on the surface, in reality we are gapping around and fading up-side movements.. I'd say there is some sort of fear coming back. As one of our readers, Doodelzack, pointed out the NASDAQ is re-balancing by reducing its weight on Apple and adding more MSFT. In addition to this, we have the Federal budget stand-off that might lead to a government shut down (according to IBD, NASDAQ dropped 4 and 3% in the last 2 times the government closed its doors).. This plus some noise around the FED having to hike rates may be causing some volatility in the short term, so let's all stay alert to that..

I have been taking it easy on my trading, creating a portfolio with a bit of Gold, some cash secured Puts and Synthetic Covered calls.. I'm doing a lot of backtesting as well as building the positions slowly on my portfolio. Bottom line is I'm looking for something with a lot less adjusting and a longer term perspective due to my time constraints.. Not to mention keeping it simple is always good.


Doppleganger said...

Hang in there...I've normally trade iron condors but have switched to just half-sized bear call verticals since the huge bull run on SPX last yr. After my initial spread, if the markets don't move I put on the other half of the contracts....but so far, market has gone up atleast 15 handles almost every time I put on the trade before I can put on the other half. So, instead of doubling up on the same or near the same strike, I've been moving my initial spread out another 10-15 handles and doubling the contracts (i didn't really add more risk since I only started with half my normal size...I just don't collect as much credit) for .05-.10 credit that normally covers commish. Doing this plus having single calls for insurance has been good with min stress. As always, higher success rate means lower credits collected.

Gary L said...

As soon as u said not a lot of movement we get some today lol. The reweighting should be good as NDX will be more tradeable for us income traders again. Cheers!

Gustavo's Trades said...

Hey folks, yes we did get some price action, the best thing for me is to stay in a low-stress, low-maintenance mode for a while. It is working fine, I have a few very simple positions, most either on cash-secured Puts or covered calls + long leap calls

Doppleganger, you're correct, less stress = lower ROI, that being said, this doesn't necessarily means lower risk, so one must still manage his/her position, I'm doing it in a daily basis but with a lot less adjustments, so far I've been using price alerts to help if we break down on any given stop. I may move to a Good Till Cancel contingent order as stop loss. One step at a time, right?