Monday, February 13, 2012

2/17 NDX Iron Butterfly (MAR)

2/17 Update: Opened the adjustment butterfly, by re-positioning I cut the deltas by a little bit and give myself more room to the up-side and down-side.

2/16 Update: NDX went back up and hit the adjustment spot. Contingent orders kicked in and closed the butterfly. Will re-open Tomorrow.

2/15 Update: NDX took a retreat from Today's High, if you ask me the candle chart patterns seems quite bearish. I'm glad my contingent orders are only triggered at end of day, otherwise it would have hit it intra-day Today.

2/14 Update: NDX was down most of the day, by the final hour all indexes bounced back up and higher.. As of now very close to the adjustment level.

2/13 Update: NDX moved back higher Today, volatility seems to have dissolved from last Friday, it is again close to the adjustment point. Contingent orders are on stand-by to trigger if needed.


Anonymous said...

Hi Gustavo
Congratulations on what appears to be a great three weeks of IBM calendar trading. I can’t tell if the recent move to 197 may have cut your gains on the MAR/JUL spread, but still very nice work.

I’ve pretty much stayed out of any positions for the past three weeks. Volatility is lower than I’m used to, the market seems more optimistic than I am, and I am afraid to open any position that might get squished by the rally if it continues. Since I’ve only been looking at income spreads for a couple years this is kind of a new environment for me.
For now I’ll keep watching and learning.
Best of luck.

Gustavo's Trades said...

Hey Dave, thanks for the congrats. I was very glad the trade worked out well given the fact I had two adjustments and one assignment, phew!! Quite an experience!!

I tend to share your "not so optimistic" views on the macro economic environment. That being said, the market will always want to do whatever it feels like, so my determination for the year is to stay consistent and manage the trades. I let the butterfly slip on the stop las month and my goal is to control those slips so I don't have a mis-alignment risk:reward profile.

I'm interested on the IBM calendar strategy because of the volatility profile. It provides for a good hedge in case we decide to go way back down and jack up these volatilities once again..

My goal for next year will be to adjust the strategy I enter based on the volatility profile for the period. (i.e. Calendars during summer months and Butterfly on end of year months), so far volatility follows a very consisten trend of going up in the summer and going down during the holidays. We'll see..