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.

3/2 Daily Summary

A few quiet days will be very well received! I finished the cut and roll and add the extra butterfly to my position Today, this puts me in position to recover if the market stays quiet. NDX, let's stand still for a few days, how about till Tuesday? :)

3/1 Daily Summary

Hanging on to those Puts really paid off Today! I was ready for any sort of down-side. I've been watching the last two up-side days and recognizing they were happening at lower volumes I kept my bearish bias and did not jump on the hand grenade by selling the puts too quickly.. Now I'm in a good position to finish cut and rolling, add the extra butterfly and push this trade to recover. If we stay quiet it will bring me my goals, if we keep moving around I can continue to manage it. It is a matter of time now to have theta kick in fast.. I also can't wait too much before adding any extra butterfly, as a matter of fact, am brushing with the limit to add new butterflies, I think it is still ok considering the volatility Spike from Today.

Bottom line, I'm staying alive, keeping it cool, recognizing and managing stress and managing the trade! That's what I expect from myself. :)

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..

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:

http://www.youtube.com/watch?v=hyFl-IyDUhE

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.. :)

Cheers!!