10/07 Daily Summary

I'd like to thank the market for this consolidation day. As an option trader, any day we don't move, specially at this time in the OCT contracts cycle, is a great day! Today's price action helped me recover $ on the RUT and added some money to MNX, my goal is to control gamma risk from this point forward, even if it means giving up theta.


Position's Details:
10/07 RUT Iron Butterfly
10/07 MNX Iron Butterfly

10/07 RUT Iron Butterfly

Thank you RUT! I was pleased to see we didn't move around Today, this helped me to erase some of the paper loss. I started to move spreads around to cut gamma risk, also rolled the short 590 contract, this time around I don't want to be ITM on any short contracts.

10/07 MNX Iron Butterfly

I've started to "condorize" the trade by moving my short contracts further out of the money. I've managed to move my short PUTs and CALLs, and while this reduces my theta, it also cuts back on the gamma exposure. Given the fact we're moving around quite a bit these past few weeks I think cutting the gamma risk is a good idea.

10/06 Daily Summary

I started exiting the MNX trade with just around 10% profit, I could not keep RUT under control during the morning as I had just landed from California (24 hours traveling, including a 8 hours overnight flight), so I wasn't in the very best, there wasn't no pre-planning, simply reactive action as I started taking action on the RUT and MNX the market had already taken some of the money away from the positions..

My plan is to exit MNX with 10% or better, and stay in the RUT just enough time for me to reduce its size, cut gamma and make a small profit. If we keep on moving Tomorrow, this will be harder to accomplish, but I think it is still doable.

Bottom line on the RUT trade: It seems to me I'm having a harder time at the "end game" as Dan Harvey puts it.. Come this time around in the trade and the gammas seem to make it harder to stay with profits when the market moves..

Position's Details:
10/06 RUT Iron Butterfly
10/06 MNX Iron Butterfly

10/06 RUT Iron Butterfly

Had I been watching the market at the close on Monday, I'd have removed at least one of the two 520 Puts I had, because I was traveling, I had contingent orders to do so, and we closed 1 point before triggering that contingent order :)

So, come Tuesday morning, as I rushed my way out of the airport and into the computer, I watched the market evaporate the value on the 520Puts.. Add the jet lag and fatigue (24hours traveling + 1 overnight flight) to the mix and I honestly was like a deer in the headlight... I took action, but it was late in the game, so the RUT dove back inside the hole.. Now I added contingent orders to stay with it, as there is still profit potential in the position, provided we stay quiet for a few days..

10/06 MNX Iron Butterfly

I have started to peel off spreads fom the trade, I couldn't keep up with the market early AM, so I decided to cut my gamma exposure by removing spreads out of the trade.