20/03 All Trades - Quick Daily Update

For those who, like me, made through one more week of trading under wild market conditions, congrats! We`re one week older and wiser.

As far as I can tell, all my trades survived this week, they're still in the table. On the not-so bright side, they were all adjusted one way or the other. Now we`ll need som time to allow theta to take care of the cost of adjusting.

One of the realizations I had this week is the fact that adjusting condors may not be the best answer after all.. What if you simply allowed the trade to work (or not), and placed your stops at 1.5x times your original cashflow? I`ll be looking into that over the weekend. Kudos to TrackingCR for noticing that too and making a comment on the risk profile for the RUT HP.

Here is a collection of risk profiles. I`ll post again later on the weekend with a detail plan of action for Monday for each Trade.

RUT Condor
XLE Double-Diagonal

OIH Condor

GLD Calendar

19/03 RUT LP - Santucci way

I've added a paper trade to follow Mark Santucci's method. Will start blogging it next week, am just too tired Today... Alergy season

19/03 GLD Calendar

Not much to update on, got a bit of Theta Today.

Probabilities of Success:
91.4% probability of being adjustment free Tomorrow

Contingent orders
Close if GLD at or above 97.5
Close if GLD at or bellow 86

19/03 OIH Condor

I had contingent orders in place for being down by 10%. Today OIH surged up and volatility didn't go down, the result was a discrepancy between actual prices and my contingent ordes. I was watching the market and noticed that the trade was down 10% and still $1 away from my order, so I because I already knew what to do (cut 1 CALL spread), I went ahead and did it.

For the future, estimating P&L is very tricky, you never know what the implied volatility will do, you can only guess.. Tomorrow I'll be looking at changing my condors to adjust based on the delta of the short strikes, at least I know the delta will self-adjust based on the volatility.

Probabilities of success:
99% probability of being adjustment free Tomorrow
68.46% implied probability of expiring profitable
85% historical probability of being in the money by Friday before expiration week

Contingent orders:
1) No CALL-side contingent
2) Close 1x PUT spread if at or bellow 62.5

19/03 XLE Double Diagonal

Hit adjustment point on XLE Today. Gapped up at the opening, my contingent orders are always scheduled to trigger at 7:00 and so it did. It automatically cut the deltas down and I added the PUT diagonal later on the day (around 11:00 PST).

Probabilities of Success:
70% probability of adjustment free Tomorrow
43.8% implied probability of expiring profitable
65% historical probability of being profitable Friday before expiration

Contingent orders:
XLE at or above 46.25:
1) Buy 2x 44/48 CALL verticals
XLE at or bellow 40.35:
1) Buy 2x 41/38 PUT verticals

19/03 RUT Condor

Lived to trade another day. RUT did not hit the stop loss, as I said Yesterday, 33% chance is better than 0%. Still in the trade, still managing it.

Probability of Success:
61% probability of adjustment free Tomorrow
69% implied probability of expiring profitable
72% historical probability of expiring profitable

Contingent orders
:- Buy CALL spreads for .10c (GTC order)
- Buy PUT spreads for .10c (GTC order)
- Stop Loss @ or bellow 295, or @ or above 422.5 (Day Order)**
** Increase Imp.Vol by +5% to estimate down-side, Decrease Imp.vol by -5% to estimate up-side

U.S. Senator Dianne Feinstein response to my email regarding stupid traders tax bill

Write your representatives regarding this stupid bill:
http://www.rallycongress.com/no2tradertax/1536/tell-congres-to-block-trader-tax/


Here is the response I got:

From:
"senator@feinstein.senate.gov"
To:
gustavo_couto@yahoo.com

Dear Mr. Couto:

Thank you for contacting me to express your concerns about the "Let Wall Street Pay for Wall Street's Bailout Act of 2009" (H.R. 1068). I appreciate the time you took to write and welcome the opportunity to respond.

As you know, on February 13, 2009, Representative Peter A. DeFazio (D-OR) introduced the "Let Wall Street Pay for Wall Street's Bailout Act of 2009," which would impose a tax of at least 0.25 percent on certain securities transactions. Representative DeFazio's bill has been referred to the House Committee on Ways and Means and similar legislation has not been introduced in the Senate.

I certainly understand your concern about the potential effects that this legislation could have on small businesses and investors. Like you, I am frustrated by many of the irresponsible practices that have contributed to the recession and instability in financial markets. While a tax on securities transactions may not be the most appropriate response, I support additional transparency and oversight of financial institutions that accept Federal assistance.

To that end, I introduced legislation with Senator Olympia J. Snowe (R-ME) known as the "Troubled Asset Relief Program Transparency Reporting Act" (S. 133). This bill would prohibit firms receiving financial lifelines from the federal government from using such funds for lobbying expenditures or political contributions. Additionally, it would require that firms publicly disclose how they use the funds and abide by a set of responsible corporate governance standards. On February 4, 2009, Treasury Secretary Tim Geithner announced a set of guidelines, similar to those contained in my legislation, requiring firms that accept lifelines to abide by policies that limit luxury expenditures and executive compensation. I am pleased that Secretary Geithner has taken this important step and will continue to work with the Treasury Department and my Senate colleagues to ensure adequate oversight and transparency of Federal funds.

Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.
Sincerely yours,
Dianne Feinstein United States Senator