AUG/09 Trades

I hit a rough spot in August. Looking on the positive side of things, I preffer to think that I spent some money to discover that there are only a few strategies that are making money for me in this environment. Does it mean the other strategies don't work? Of course not! All it means is that perhaps they don't work for me! The best thing about trading is that we all do it a little bit differently, and therefore, there is room for everyone.

Position's Details:
08/04 RUT 30-Day Iron Condor
08/03 SPY Double Diagonal
08/18 IBM Calendar
08/19 MNX Iron Butterfly

08/15 MNX Price & Volatility Study

I forgot to even run this study a couple days ago when I entered the MNX Iron Butterfly for September. It is one of those things: When you're following the index for a while, you kind of have a feeling for what is going on.

One way or another, what do I see on the picture bellow? I see that MNX has settled down for a few weeks. I hit a rough patch on the AUG trades, but there are less strong price moves than earlier on. Does it mean everything will be just fine? Of course not! It is just an acessment of how rough the waters are before we jump in.

I didn't run the VIPES study for the AUG/09 MNX Iron Butterfly, if I had, I would have seen I was sailing much more rough waters, take a look at the current study in contrast to last month's. Things I note:

1) This month we are moving from stronger price action in the 60 days chart, to a more quiet environment in the 30 days chart. It was the opposite situation last month.

2) This month we have just survived a bigger 5-Day Volatility wave, notice how this wave was just getting started last month.

What I want to be able to do in the future is to use this study to gauge how I should allocate capital. By collecting this data I can pretty much make inteligent decisions about my business. I can decide when to enter more or less capital in the market depending on how the environment is using a very objective perspective.

08/15 Key Postings

This post collects some of previous entries where I explained some of the tools I use on my options trading. I'm also using this to gather key information regarding the strategies I'm currently trading.

As you might already know, I have decided to focus on trading just two strategies between now (SEP) and the end of the year: Iron Butterflies and IBM Calendar. My goal is to simplify the business so I can focus on the strategies that are working best in the current environment. I'm also dedicating a portion of my capital to Day Trading FOREX, and keep a separate blog for those trades as they are very different from the options strategies I use.

Key postings to read:
12/30 Decision-Making Process: Should I stay or should I go? - Posting in details on how I used the decision tree tool for evaluating adjustment alternatives vs. closing vs. doing nothing on a trade that was under water.

XLE Decision Making - Another example of using a decision tree to evaluate adjustment alternatives.

09/04 TOS Contingent orders - How do I set up my contingent orders in TOS

09/03 Tools in the toolshed - A collection of sites I use as resource for my trading.

When do I cut Deltas on Iron Butterflies? - My answer to a frequent blog question

I Can See Clearly Now - Explains what I see as the current environment, and how it differs from past higher volatile periods

Trade Monitor day-by-day - Explains how I compose the daily charts that I use to track my positions

Understanding the Volatility Cone - Explains how I create the volatility cone

My VIPES spreadsheet Explained - Explains this Price action and volatility study

08/14 Daily Summary

This is a short posting, as I had a long day. Current positions got the benefit of Today's price action in the markets. I specially appreciated that in the MNX Iron Butterfly for AUG.

I'll be cleaning up the blog and looking over some of my past trades this weekend.

Detailed Positions:
08/14 MNX Iron Butterfly - SEP
08/14 IBM Calendar
08/14 MNX Iron Butterfly

08/14 MNX Iron Butterfly - SEP

This is the second day on the trade, not much to do here. My plan is to leave the position alone for at least 1 week. Will only touch it if we start approaching the expiration break-even levels in a fast pace. Then I'll start cutting deltas a bit sooner than 1 week.

I'm creating a new Dashboard view, this one will include any adjustments made to the original position, as well as some of the greeks.

Position's History:
08/15 MNX Price & Volatility Study
08/13 MNX Iron Butterfly - SEP *New*

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08/14 IBM Calendar

I took out 1x 120 CALL calendar, and now have only 1/2 of the position going through the weekend. I figure it is a good idea to book some profits, specially after such a smooth sailing on the trade. So, I expect the goal to be reached early next week.

Position's History:
08/13 IBM Calendar
08/12 IBM Calendar
08/11 IBM Calendar
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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08/14 MNX Iron Butterfly

I appreciated this down-move Today. Now it is a matter of collecting the weekend of theta and by end of day Monday looking for the exit. Today I rolled all my short contracts further out of the money, that helped me with my Gamma risk going into the expiration week.

Position's History
08/13 MNX Iron Butterfly
08/12 MNX Iron Butterfly
08/11 MNX Iron Butterfly
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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