01/22 Daily Summary *SHARKS*

Sharks in the water! Let's watch out! Notice two things on the price action charts, in the past 10 trading sessions, we had about 7 or 8 days with over 1 standard deviation. The 5-Day volatility chart is no longer sideways, it started a descending wave.

The only positions I have left on my portfolio are the WOLVERINES of non-directional strategies: Iron Butterflies! :) These little trades seem very fragile, but do not let that short coverage area fool you, they take a punch or two, or four and stand to fight and make money. See the MNX profile, I entered the same day as the RUT Iron Condor, I'm out of the condor with -13% and I'm still in the Iron Butterfly and down only -5%.... You do the math :)

Position's details and price chart:
01/22 MNX Iron Butterfly
01/22 NDX Iron Butterfly
01/22 RUT Iron Condor

01/22 MNX Iron Butterfly

the extra puts I have bought did a good job keeping the trade under control. Then again, we had over 2 st. deviations drop on the MNX and NDX, so this caused the position to lose some more money than it would under normal conditions (read, volatility POP). By end of day I rolled half of my short puts as they’re delta hogs and plan on keep on rolling the other rest if we keep on going down next week. So far the position is hedged, but it needs more theta.

01/22 NDX Iron Butterfly

Closing the trade slightly bearish Yesterday paid up this morning. As NDX crashed down it didn’t hurt my P/L, in fact, it brought it back up by a few percentage points. I used that money to Cut and Roll the put side, also added an extra butterfly to help pay for the cut and roll costs.

Now, take a look at this profile after the cut an roll. Notice that we moved way out of bounds and I'm still in the game, making Theta! I really like this 2.0 version of Dan Harvey's strategy. Yes, I'm down about 10%, but then again, I had a whipsaw effect Yesterday that knocked down about 5% of my trade, if it wasn't for that issue the trade would be down just about 5 to 6%.

01/22 RUT Iron Condor

I closed the position Today, because I was under a “market watch” this afternoon after we hit -0.5 on the 5-day volatility chart Yesterday. Today I shut down the position before it hit max loss. Saved a few percentage points as the market kept on going down.. Bottom line, not a good month again for the RUT Iron Condor.