3/2 Daily Summary

A few quiet days will be very well received! I finished the cut and roll and add the extra butterfly to my position Today, this puts me in position to recover if the market stays quiet. NDX, let's stand still for a few days, how about till Tuesday? :)

3/1 Daily Summary

Hanging on to those Puts really paid off Today! I was ready for any sort of down-side. I've been watching the last two up-side days and recognizing they were happening at lower volumes I kept my bearish bias and did not jump on the hand grenade by selling the puts too quickly.. Now I'm in a good position to finish cut and rolling, add the extra butterfly and push this trade to recover. If we stay quiet it will bring me my goals, if we keep moving around I can continue to manage it. It is a matter of time now to have theta kick in fast.. I also can't wait too much before adding any extra butterfly, as a matter of fact, am brushing with the limit to add new butterflies, I think it is still ok considering the volatility Spike from Today.

Bottom line, I'm staying alive, keeping it cool, recognizing and managing stress and managing the trade! That's what I expect from myself. :)

2/28 Daily Summary

No adjustment Today, I'm gearing up to defend the position against an up-side movement. Right now the down-side is well covered and hedged. I had a run with TOS margin calculations Today. It is pretty complicated to explain but the bottom line TOS is using a new margin tabulation method that locks down more $$ out of my account than I'd expect. So Today when I was planning to adjust my trade it wouldn't let me do and I had to eliminate all my cash-secured put positions and call TOS to free up my capital so I could at least enter the contingent orders.

Bottom line: While in the past their margin was equal the max amount at risk in the trade, their new method does some weird calculation and pairs up my trades in a strange way, this gets complicated because I had a partial butterfly roll, so it is locking down more money than I could potentially lose if we were to expire beyond my B/E. I have to review my trades and adjustments now for the impacts on margin as well as the impacts on total capital at loss. More complexity to take into account as I want to utilize the most of my capital and use cash-secured puts or covered call on the cash that is sitting in the account.. in order to maximize I need to study this further..

2/25 Daily Summary

Which trader are you? The guy on the right or the one on the left? Always go back to this video when we enter the roller coaster:

http://www.youtube.com/watch?v=hyFl-IyDUhE

Choppy action in the last 4 days to say the least. I did not touch the position Today as it did not go above my contingent order level. For now I'll enjoy the weekend, it certainly looks like slippery slope if we keep going higher, on the positive side I have a good amount of negative vega, which will help if we go higher or stay quiet and the vols deflate. If we keep rising I might sell the further out put and add a long call to reduce my deltas while still keeping some put protection. Today's action was performed in low volume, so this kept me happy without making any drastic adjustment yet.

For now, enjoy the weekend, don't drive too much as oil prices are rising.. :)

Cheers!!

2/24 Daily Summary

Today I did a partial cut and roll on my position, moved 3 of my 5 put spreads, the goal is to watch the market Tomorrow morning and continue to cut and roll if we're showing signs of stabilization. I may leave things along till Monday just to be on the safe side as I rather not initiate spreads right before the weekend. Either way, this is a matter of watching the market and increase the theta slowly because of my current P/L being past my 1:1.5 level, so want to keep that in check.

2/23 Daily Summary

Continued down-side pressure hit my two adjustment levels at the down-side, the second put took a big hit as the market pulled back from there, I'm hesitant to cut and roll first thing in the morning as I would like to see this market settle down, for Tonight my plan is to leave the position untouched through the day Tomorrow and re-evaluate at end of day Tomorrow. I got too upset with the P/L hit and it might just be an over-pricing on my short calls due by the fast activity in the market, so I rather let it rest a day before taking actions in a hurry..

For now the position is relatively well hedged, need to see what Tomorrow looks like. The next step from here is to cut and roll the short put spreads and add a new iron butterfly to increase theta, selling back those puts to balance out the deltas. I may start cut and rolling Tomorrow AM, depends on what the market looks like

2/22 Daily Summary

Lesson learned: While using a debit spread helps you if the market keeps going in the direction of the debit spread (in this case, going higher), it hurts really bad if we reverse quickly. In this trade, the debit spread took a double hit, one by vega and the second one by volatility. A single call would keep more value (about 3%), no major deal, just a lesson learned this month.

The trade took a hit as the market sunk during the day. I am very glad to report I didn't have to touch the position as the contingent orders took care of adjusting and protecting my capital. The Debit spread was sold on my first order and the position is still in play with a small P/L slippage given the huge jump in volatility. Should we continue my game plan is to hedge, cut and roll the vertical put spreads and add another smaller butterfly. Mainly stay in the game, on the positive side, there is time to recover the trade.