I honestly think the P/L Today was distorted by a mis-print at closing time. I was somewhat observing the market action and P/L, and was quite surprised to see being down 12% by end of day. We didn't have this big of a move and, as far as I can tell, the volatility has dropped. In any event, I'm holding the same contingent orders and game plan from Yesterday if we keep going higher I'll hedge and see what else is left for me to do. Cheers! Gustavo
Today I rolled the remaining 2125 calls and add an extra butterfly to the position. The 2125 call delta was around 65 and it is time I add theta to the position so it can recover. I was traveling to Europe overnight and had to make these adjustments prior to end of day, they would be cheapper if I was awake at the market closing time, but I couldn't do it. It would not have triggered otherwise, and this is the second time I by pass the contingent orders on my trade, I felt good about it when I did, as we were breaking out of the range on all other indexes, NDX traded down at the closing, but I still think the sentiment is more to the bullish side.
I'm on my way on a business trip once again, the position's P/L didn't change much from Yesterday, I will drop the long JAN call if we keep going lower, I need a day of quiet market movement so this trade can recover. We may find some support around these levels, perhaps bounce back up a bit from here, we'll see.
Ok, we're definitely in a wild market. Today we traded about 2 standard deviations, triggered my long PUT order at 2120 and traded almost all the way back up. I'm glad my adjustment was not an order to drop the long Call, as it would have whipsawed me quite a bit. On the up-side, I'm still flying the trade and managing the wild movements, on the down-side, these adjustments are costing me profits. I need a few days of no activity to build up profits. So far the position looks ok, and I feel I'm doing my best to keep the adjustments away from 1 st. deviation zone, yet with these sort of swings the best bet is to go easy on adjusting so the whipsaws don't hurt as much.
Here is my game plan for Tomorrow. My goal is to cut and roll and add another butterfly if we trade higher, if we go down what I'll do is simply cut some of the delta risk and get rid of the long call if we keep going lower.
Today I happened to be watching in the AM when the market was trading at my adjustment level. Instead of hedging with contingent order, I did a butterfly roll and moved 2 of my short calls to the up-side. The short deltas on the 2125 calls is at .65 and it is time to get rolling. I did not roll all contracts just yet as we have been in a wild zig-zag mode so I want to get reassured of the direction we're moving before rolling all contracts.
