10/01 Daily Summary

The market crashed down very hard Today, RUT moved -2.5 standard deviations on my historical volatility charts and MNX moved -3 st. deviations. Both my positions got hit. There is still time and money left in both trades to keep up with the market, as long as we don’t start a major down-trend now, they should be able to get out of it profitable.

I’m not sure I’ll be around Tomorrow during the closing hour, so if we continue moving down early in the day I might have to do the vertical rolls before end of day.

Position's Details:
10/01 RUT Iron Butterfly
10/01 MNX Iron Butterfly

10/01 RUT Iron Butterfly

RUT contingent orders kicked in and protected the trade as the market crashed down. By the end of the day I decided to add a small butterfly to take advantage of the volatility pop, increase the position’s theta and cut some of the deltas. Should it continues to move down Tomorrow my plan is to hedge and do a vertical roll to get rid of some of the delta hogs.

I looked at the VIPES chart and don't quite like what I see, notice that we had 3 days with over 1 st. deviation in the past 2 weeks! That's a sign the market may be getting too hot to handle once again...

10/01 MNX Iron Butterfly

As MNX crashed down, one of my contingent orders didn’t fire up properly, luckily I was there and caught with if right before any major damage was done. I think I had mark +0.02, while it should have been mark +0.03 in order to get a fill.

By the end of the day I started to roll the delta hogs in order to balance my deltas and keep the position’s theta up. Let’s see what Tomorrow brings.

09/30 Daily Summary

Today's whipsaw action hit me on the RUT position, the MNX trade had much better luck, so far so good, the portfolio is profitable, not as much as I wanted because of a bad decision I made on the RUT trade, but nevertheless, it is live and learn. As long as I learn as I go, I should be ok.

Position's Summary
09/30 RUT Iron Butterfly
09/30 MNX Iron Butterfly

09/30 RUT Iron Butterfly

RUT triggered two of my down-side adjustments, I turned the computer early in the session and notice that we were trading around 598, 1 standard deviation down.. Then I decided to place a contingent order to sell the NOV Put at 610, thinking if we bounce back hard, It is a good idea to get rid of it.. In perfect 20x20 hindsight, that decision wasn't very good. We bounced hard, hit the 610 level and came back down again...

When it was all said and done, selling the 510 Put ended up costing me 2% of the trade's P&L. Not to mention that I felt pretty bad for most of the day for making the decision of changing the plan mid-day.

How can I avoid that in the future? Simply trusting the plan I set the day before the market opens, this is the time when my decision making is not affected by market movement and I'm much more likely to make the right choice.. So, another item for my trading checklist: set the contingent orders and forget about the trade untill the final hour, where I can easily make any adjustments if needed.

On the bright side, the position theta is good, and I suspect most of the P&L drop is due to the volatility increase, so eventually that money will return as volatility has to go to zero as we approach OCT expiration.

09/30 MNX Iron Butterfly

I resisted the urge to make any adjustment Today, we were trading really close to my first down-side adjustment and I decided against jumping on it, that was a wise decision, as the market bounced up pretty hard after comming within .10 points of the adjustment.

09/29 Daily Summary

Today's consolidation was a nice gift! I appreciate that! Looking forward to a few more days just like it.. I fixed Yesterday's mistake I had made on the RUT position and Today its P&L started opening up. Both trades are progressing along nicely.

Position's Details:
09/29 RUT Iron Butterfly
09/29 MNX Iron Butterfly