10/11 Daily Summary

Working myself towards the 5% goal for this month, I should be reaching this goal Tomorrow, and am very grateful that I was able to stay in the trade and managed to control the position and bring about profits despite the rough start. I’m also very grateful the NDX gave me a break on the up-side. So, for Tomorrow my only protection is against an up-side, if we trade at or above 2050 I will close 2 spreads and roll the last 1, I fully expect the market to pull back or stay around the same levels of Today, so I can close out :)

e-Book #1: Non-directional option trading plan for Iron Butterflies

Ok, here is my proposed outline for the first e-Book I'll be working on this quarter:

Title: Non-directional option trading plan for Iron Butterflies

Chapters:

1. Introduction
1.1 What is non-directional trading
1.2 What are options
1.3 A word on probability & volatility
1.4 Define risk to you
1.5 Greeks basics
1.6 Mix it all up: The Iron Butterfly
1.7 Educational resources

2. Trading Plan
2.1 Purpose
2.2 Objective
2.3 Trading style
2.4 Infrastructure
2.5 Emergency procedures

3. The Iron Butterfly Strategy
3.1 Strategy details
3.2 Entry guidelines
3.3 Adjustment guidelines
3.4 Exit guidelines
3.5 Known exceptions

4. Monitoring the plan
4.1 Trading Journal
4.3 Looking at performance
4.4 When to update the plan

5. Tools of the trade
5.1 Money management 101
5.2 Volatility cone
5.3 Trade dashboard
5.4 Market monitoring tips
5.5 Support system
5.6 Trading platform

10/08 Daily Summary

Continued to close spreads out of my position, Today I got another short call out by doing a debit spread on 2075/2100 calls, by the looks of it, I expect to reach my 5% by Monday next week, go time decay! It has been a long month, a lot of trading and adjusting, yet I like the fact I can control my position and risk exposure in so many ways with the Iron Butterfly that having one or two difficult months in the year is not such a bad deal... Remember, the September trade got me 10% in 6 days, October is making me work for my money, that’s ok :)

10/7 Daily Summary

Exiting my trade Today, not much more left to do but to roll my short calls away from the money. I used debit spreads to move my short 2025 and 2050 calls all the way to 2075, also sold all my long NOV contracts (Puts and Calls) as well as my long OCT call that I bought as a hedge.

10/6 Daily Summary

Back around break-even level after we traded down Today. The market is bouncing around and I am exiting the position at the same time, plan to exit or continue to condorize it tomorrow by doing debit spreads to move my short contracts away from the money, as it turns out the 2025 and 2050 calls are way too close for comfort, they’re being helped by the long call, so it is time to clean up the inventory, free up some theta and control the gamma exposure.

10/5 Daily Summary

We’re acting like a bull in the china shop, -1.25 st deviation Yesterday, over 3 standard deviation Today on the opposite direction, ouch! I’m glad I started moving my short calls away Yesterday, now, I certainly can’t afford to leave these other short calls too close to the fire, if we keep trading higher Tomorrow I must hedge and get out of the way, last thing I need is a fast moving train flying higher with just a few days before expiration. So, I’m back underwater, not by a lot, yet underwater, this has been a rough month for sure.

10/4 Daily Summary

As the market took a dive Today my position self-adjusted with the contingent orders. By end of day I’ve rolled a few of my short strikes out with vertical rolls. At this point I’m back in the green and looking forward to start exiting the trade or condorizing. If I have more time Tomorrow at closing I might just peel off most of the position. Looking good and I’m super grateful for the awesome recovery. I had my contingent order to the down-side triggered this morning, if it wasn’t for that I’d be out of the trade right now with +5% (my revised goal), now here comes the lesson-learned: Did I feel bad about it? Of course not! The adjustment was based on my plan, and instead of focusing on “could haves”, I’m focused on the fact the contingent order did its job (protect my position while I’m working my job) and now I’m looking forward to the next move I must make.. What is past is past, need to focus on the present and near future.