08/11 Daily Summary

Not much to say, except that the last AUG trades that remained are showing profits. I have started simplifying the MNX Iron butterfly as we enter the "end game". My plan is to be totally out of all trades by Friday, Monday at the latest.

I'm also adding a new MNX Iron Butterfly for SEP this comming Thursday (35 days to expiration).

Position's Details:
08/11 IBM Calendar
08/11 MNX Iron Butterfly

08/11 IBM Calendar

The trade is in great shape! I hope IBM (and the overall market) stays quiet Tomorrow! That's a long shot, considering the Interest Rate announcement, but then again, we never know.


Position's History:
08/10 IBM Calendar
08/07 IBM Calendar
08/06 IBM Calendar
08/05 IBM Calendar
08/04 IBM Calendar
08/03 IBM Calendar
07/31 IBM Calendar
07/30 IBM Calendar
07/29 IBM Calendar
07/28 IBM Calendar
07/27 IBM Calendar *New*

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08/11 MNX Iron Butterfly

The trade finally showed profits Today! I watched a video with Dan Harvey Yesterday and he explained that his strategy for these final weeks is to start rolling the short contracts out of the money as much as possible. This reduces the Theta, but helps a lot by keeping the Gamma under control.

I started rolling these contracts "out", By using Debit Spreads, I rolled 2x 157.5 Puts to 152.5 and 3x 160 Calls to 165. I also sold the long SEP Calls Today. In summary: This is the "end game", so it is time to keep the trade under control and at the same time to start simplifying the number of contracts. I'm attaching a view that shows what I have as far as contracts.

Position's History
08/10 MNX Iron Butterfly
08/07 MNX Iron Butterfly
08/06 MNX Iron Butterfly
08/05 MNX Iron Butterfly
08/04 MNX Iron Butterfly
08/03 MNX Iron Butterfly
07/31 MNX Iron Butterfly
07/30 MNX Iron Butterfly
07/29 MNX Iron Butterfly
07/28 MNX Iron Butterfly
07/27 MNX Iron Butterfly
07/23 MNX Iron Butterfly
07/22 MNX Iron Butterfly
7/21 MNX Iron Butterfly
07/20 MNX Iron Butterfly
07/17 MNX Iron Butterfly
07/16 MNX Iron Butterfly *New*

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08/10 Daily Summary

It was nice not giving back all the weekend profits for a change! I appreciated that we didn't move too much one direction or another and my two remaining positions are still standing.

Me and my partner (aka Wife) have pretty much decided to focus on the strategy that worked best for us thus far: the Iron Butterfly. I will be trading this strategy only for the next few months in an effort to improve my management and learning from it. I also am going to trade a smaller IBM calendar, as the calendar is another trading strategy I didn't get hit too badly in the past. So, for SEP my plan is to trade 2 iron Butterflies (DIA and MNX) and 1 IBM Calendar.

Speaking of Iron Butterflies, I started backtesting the MNX Iron Butterfly a while back, and now have to do the same for the DIA Iron Butterfly. I find that by backtesting I can short-circuit some of the learning feedback. It takes one full month for a trade to evolve, and we can review an entire month in one or two hours of backtesting.

Position's Details:
08/10 IBM Calendar
08/10 MNX Iron Butterfly

MNX Iron Butterfly Backtesting:
FEB09: 07/21 MNX Iron Butterfly Backtesting
MAR09: 07/20 MNX Iron Butterfly Backtesting
APR09: 07/17 MNX Iron Butterfly Backtesting
MAY and JUN09: 07/15 Backtest Challenge
JUL09: 07/16 MNX Iron Butterfly Backtesting

08/10 IBM Calendar

The position is pumping profits, I like it!



Position's History:
08/07 IBM Calendar
08/06 IBM Calendar
08/05 IBM Calendar
08/04 IBM Calendar
08/03 IBM Calendar
07/31 IBM Calendar
07/30 IBM Calendar
07/29 IBM Calendar
07/28 IBM Calendar
07/27 IBM Calendar *New*

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08/10 MNX Iron Butterfly

The position made a nice recovery over the weekend, we're basically at the B/E level, I've added the next adjustment points in the chart and am looking for a recovery if we stay put or go down a bit more Tomorrow.



Position's History
08/07 MNX Iron Butterfly
08/06 MNX Iron Butterfly
08/05 MNX Iron Butterfly
08/04 MNX Iron Butterfly
08/03 MNX Iron Butterfly
07/31 MNX Iron Butterfly
07/30 MNX Iron Butterfly
07/29 MNX Iron Butterfly
07/28 MNX Iron Butterfly
07/27 MNX Iron Butterfly
07/23 MNX Iron Butterfly
07/22 MNX Iron Butterfly
7/21 MNX Iron Butterfly
07/20 MNX Iron Butterfly
07/17 MNX Iron Butterfly
07/16 MNX Iron Butterfly *New*

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Trade Monitor day-by-day

The spreadsheet you see for every trade I take is nothing fancy, I simply create a volatility cone when I start the trade, and on a daily basis I copy and paste key values I want to track on a daily basis for my trades.

For example, let's say I'm starting another MNX Iron Butterfly. As soon as I enter the trade in my tracking spreadsheet, I calculate and plot a volatility cone, then I start to track the closing value for MNX (close line in the cone), as well as the P&L for the trade, the change in volatility, and how many standard deviations we moved every day.

This information is then copied and pasted on a daily basis into a series of columns I keep for every trade. Once you have the trade's history, it becomes an easy process to plot those values in a chart. Those values is what you see in my trade log.

I hope this helps.
Gustavo