This was one of my best trades ever. Not because it easily gave me profits, because it as a great challenge to get a trade that was down and work its way back into profits.
I closed at a small loss due to an oscilation in P&L that I couldn't understand (see bellow). However, the lessons I learned that day and moving forward were awesome.
Start: 05/22/09
Finish: 06/10/09
Duration: a bit less than 1 month
Results: -2.68% (Priceless)
05/22/09
05/26/09
05/27/09 - Hit first adjustment level (this early in the game)
05/28/09
05/29/09 "I realized my hedge was too far out of the money, it lost almost all its value with RUT being close to 502.5 again I may need to come in and buy a new hedge, this time closer and stronger."
06/01/09 - Second hedge enabled
06/02/09 "The anxiety is out of this trade, however, I must start looking for a way out of this hedge, it makes no financial sense to leave the money sitting there earning no time decay"
06/03/09 "I'm still holding the trade expecting RUT to give up this up-swing."
06/04/09 "RUT is not giving up, Today the position was hurt by a drop in volatility. Need to remember, when you hedge the position, the vega risk is still there. Specially risky on the up-side."
06/05/09 "With the trade being down 15%, and going through the weekend at the 430 level, due to negative Theta I would be at max loss on Monday. I wanted to do something other than taking the loss, so I came up with a recovery plan and went for it! No guts no glory."
06/05/09 - Recovery Plan
06/08/09
06/09/09 - "Nice! My goal is to exit this trade Tomorrow. By the look of things, I will be able to take the 15% ROI from the original trade"
06/10/09 - MISTERY HAPPENED, where did the profits go? Read the post and find out
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