3/11 Daily Summary

Today I didn't see any recovery in the morning and decided to just exit the position. I was sick to my stomach to take this big loss -33%, it is a double-hit for 2 reasons:

1) It was way over my average win, and beyond my plan to control the losses and keep then to 1.5x the average win, this trade took 2 big hits with overnight gaps, the first time around I survived, the second time around no, I took the hit.

2) I had just started increasing in my position size. This is a double hit, as this is one of my biggest positions since I started tracking on the blog, it will certainly set me back by quite a bit.

All and all, I have to regroup, it is disheartening to be set back that much. I will have to do some hard thinking and figure out what to do from here. For now will take a break over the weekend, and do some hard thinking..

Cheers!
Gustavo

3/10 Daily Summary

My plan a couple days ago was to condorize the position this Thursday morning. Well, this was one day too late.. Unfortunately NDX did not agree with my plan and decided to roll down and gap down in the morning. The contingent orders did their job, now I have to wait for the dust to settle and condorize the position, or whatever is left of it.

On the bright side, I expect the spreads to be wider than normal so get a break if we are not moving too fast again Tomorrow.. When this happens I try to make adjustments that touch the trade as little as possible, because the more you trade on wide spreads, the worse off you are (you buy into the over priced contracts).. So, I'll have to wait and see where we are Tomorrow morning and make my exit move.. Will put the trade in a position that I can stand a large move on Monday.

3/9 Daily Summary

No major change Today, except I had to update my trading plan as if we trade lower Tomorrow I will need to add a stronger put to compensate for the delta and Theta, this makes me tweak the adjustment on the second level down (do a strangle instead of selling the long Call) because of margin in one of my accounts. Other than that, one more day moving along well. Today's volatility went higher after the close, this kept Today's profits at bay, let's see what Tomorrow brings.

Cheers!

3/8 Daily Summary

This is the quiet after the storm.. Let's hope so, this way I can land this trade with profits. So far it looks really good, a very positive recovery Today. I'll start peeling spreads out of the position either Tomorrow or Thursday morning, my goal is to keep the gamma exposure under control during these last few days of the trade.

All and all, it has sure been a great ride! No time to fool around, that's for sure!

3/7 Daily Summary

We are still navigating this storm. For the past 10 days, 6 were higher than 1 standard deviation and this causes the position to halt its recovery from day to day.. On the bright side I'm still in the game and as long as I can still make a profit I shall stay in the game. Come on NDX, let's settle down, will ya!?!

Another positive note is that the weekend time decay actually paid off, notice how very little P/L was given up even though we had quite a bit of market activity from Friday to Monday.. This is a good sign.. My job as a sailor is to navigate the storm and be ready for when it settles down. Managing risk has been a key activity on this trade for MAR.

3/4 Daily Summary

First of all, a HUGE THANK YOU for all of those who posted your comments and emails on Yesterday's posting. Your support is a major part of my trading business, it keeps me going. Knowing I have the blog and the commitment to post whatever is going on with my position is truly a major benefit for my own trading.. You give me as much as I give you, if not more!

So, back to trading. I did stick around with the position, here is why: After the market opened, with little price variation the P/L was looking a lot better and in alignment with my estimate (down 20% instead of 30+), this and the weak market start allowed me to avoid pulling the plug and essentially decided to hang around with the position over the weekend. If we do get in trouble, my plan is to peel the trade slowly, first eliminating the spreads hurting me, then hedging as much as I can as to stick with some theta but very little gamma/delta exposure..

In any event, Today is a LOT better than Yesterday. Enjoy the weekend! Cheers!!

Gustavo

3/3 Daily Summary

Today my dear reader, is my worst day in the trading business thus far! Don't get me wrong, the contingent orders did what they were supposed to do, I did my job with the plan last night, yet the modeling I had Yesterday failed to reflect the true life impact of a gap up + continuation of Today. The blow to the trade P/L was much higher than forecast, and all I have left to do is execute an orderly retreat. My job now is to take my risk off the table. Perhaps the spreads are just wide? Who knows, I'll see what Tomorrow looks like in the morning, but at this point the thing to do is start peeling off spreads.

It is a feeling of inadequacy that bothers me the most.. I'm not kidding around here, feel I left my family down with this one.. On the bright side, it will take me about 3 good months to fully recover, so it is not like it is a fatal blow and I'm out of business... Just a matter of time, and since this is for the long run, I shall pick up the pieces, come back Tomorrow and continue moving forward.

I have lessons to learn here, so will have to do some soul searching this weekend for sure.