GLD Calendar

This one is working fine, once added a double-diagonal GLD stopped trecking outside the vol-cone, so we’re making a bit of profit.

Contingent orders to close the trade at levels highlighted bellow

OIH Condor

Moved back up Today. Because I closed 1x CALL spread it is buying me time as OIH cruises above the 1 st. Deviation on the VOL cone.

As of Today, if we go to 90.68 Tomorrow it will be down -15%, however, I am not automatically closing 1x CALL spread. The reason is the CALL insurance is still providing support to the trade, and at 90.68 Tomorrow my delta will still be pretty much flat. So if I go in and close the CALL spread, I get into a very directional position.. See two profiles for comparisson.

I can and will use the insurance to my advantage and buy some time for the market to either calm down or to continue cruising up.

Contingent Orders:
1) Close PUT spread if at or bellow 64.7

XLE Double Diagonal

Got to the second adjustment point Today. The adjustment was pre-programmed and executed automatically, which is a nice feature on TOS. Now I don’t think there is much more adjustments I’ll do to this trade, looking at the VOL cone, we’re moving over 1.5x st deviation to the up-side, and I have already executed 2 adjustments.

I have set the stop at the up-side b/e level and will shut down the trade if we get there.

03/23 RUT Condor - Trade Closed Analysis

The RUT HP was shut down for -17% loss. I gave the trade some extra room and stuck with 422.50 as my stop loss, it got hit Today.

Before I begin, the main reason to get stopped out Today was the fact I didn’t follow my original plan on this trade. I got emotional about it during the down-run and got knocked out when the market snapped back up. So, bellow is the trade and its adjustments one by one.

1) First let’s look at the original volatility cone on the trade, as you can see, we went down to the 1.5x st. Deviation right in the beginning. At that point I closed the CALL side for .13c, my plan was to stay with the PUT spread until they hit a delta of -25, the insurance was holding the trade under the max loss and 25 delta would have kept me out of trouble evenif we spent some time bellow 1.5x st. deviation on the original volatility cone.

On 03/05 I got emotional about hanging on to the down-side two months in a row and decided it would not happen again. So I went to work cutting PUTs and re-opened 1/2 of the CALL spreads. This in hindsight was the biggest mistake: I didn’t evaluate a new volatility cone when I added and adjusted the trade, look at the new volatility cone after my adjustment, you’ll see the market snapped back up 1.5x st. deviation, this time to the up-side.

3) So, when the market snapped back up, I had the CALL spreads and they knocked me out. Now that I learned this lesson, my decision is to no longer make adjustments on the High-Probs, I’ll discuss it with Dan next week. My plan from now on is to set them and take the spreads at .10c or close the trade if it gets down by 1.5x the cashflow. I tested this and looked at the Volatility Cones for the past 5 years, this should work about 75% of the time.

What did I learn?
1) Trust the probabilities
2) Don't chase the price
3) If and when I adjust any trade, look at the new Volatility CONE before doing so
4) Do not let previous month's loss to take me out of my plan. My original plan for this trade would be working right now

What will I do next?
1) Cut back in size untill I can re-gain my self-confidence
2) Stop trying to adjust HP condors, work with 1.5x the cashflow as the stop and that's it
3) Go over the trade with Dan for his feedback.

03/22 GLD Calendar

GLD is around 94, so far nothing needs to be done.

95% Probability of staying in the trade Tomorrow

Stops:
Close if GLD at or above 97.50 or at or bellow 86

Note: I use contingent orders for stop, only difference is that I set them to trigger at the end of the day 12:30 PST

Bellow is the profile

03/22 OIH Condor - Daily Update

I'm considering re-opening the CALL spread on OIH. The trade as stands has no up-side risk, yet the profit potential is very small. I'll evaluate the possibilities Tomorrow morning with fresh market data to look at.

Probabilities of success:
1) 99.99% of being adjustment free Tomorrow
2) 74% probability of expiring profitable
3) 925 historical probability of staying between b/e strikes by Friday before expiration

Contingent Orders:
Close 1x PUT spread if OIH at or bellow 63.29

03/22 XLE Double Diagonal - Daily Update

Not much to report, price right at the center of risk profile. Just looking out at adjustment levels

Probabilities of Success:
1) 97% of being adjustment free Tomorrow
2) 47% probability of expiring profitable
3) 69% historical prob. of staying between B/E by Friday before expiration

Contingent Orders
1) Buy 2x 41/38 PUT vertical if XLE at or bellow 40.30
2) Buy 2x 44/48 CALL vertical if XLE at or above 46.70