07/13 SPX Iron Butterfly

WOW!! In all of Friday's excitement, I forgot to check one KEY issue with my position as of last Friday.. Take a look at its Last Friday's profile, and see if you can tell for yourself what it is..

.. I'll give it some time to further explain it later. Today, I was shocked to see the position losing money when SPX moved up, at first I thought it was the normal P&L oscilation, but then I double-checked my records and realized I had missed this one key item, and it hit me right on the head Today...

See the Vega in last Friday's chart, with Today's up movement being long that many vega just crushed the trade. VIX dropped over 9% Today, and along went my paper profits.. I left the trade on, let's see what Tomorrow brings. Today I was careful to double-check the greeks, they all seem to be in check, let's see..

07/13 SPY Double Diagonal *New*

Started this new position Today, my goal is to get 13% ROI, the stop loss is around -19%. My adjustment strategy is to cut the delta by using a debit spread to move the short contracts up or down, if needed, I can also roll the opposite side as well to increase theta.

I'm entering the position in two stages, one Today and another one Tomorrow, my preferred approach would be to enter the first half last Wednesday, but I was having Internet issues and decided to enter this week.

As you can see from the VIPES spreadsheet bellow, the SPY have been moving around a bit lately, this is a sign to approach with caution, that's why the two-step entry.

07/12 AUG/09 Trading Plan

We're in Mid July and it is time to look ahead and start executing the AUG/09 Trades. I have decided to stop trading the 50-Day Iron Condors, mainly because they take a lot of time to mature and I like to have adjustment options if things get hairy, thus far I have not been able to really protect myself on these Iron Condors, so I'll be keeping them on the bench.

So, I'm left with Double Diagonals, 30-Day Iron Condor, Iron Butterfly and Calendars. This month I want to start trading the IBM double/triple Calendar as explained by Himanshu, one of Dan Sheridan's students. Here is my capital allocation plan and time-line.

07/10 Daily Summary

I finally got the Internet back on-line. The incident left me with a new found respect for the Desktop version of TOS. Their web-based platform is really basic and without the Risk Profile one has very little visibility, what makes it difficult to manage a complex option position. One way or another, it has the greeks and I was able to balance them at the end of day Today, now looking at the profile I see there wasn't a lot of damage, thanks for the market being indecisive for the past 3 days.

There is a chance to make paper profits next Monday, it all depends on the market, we'll see. One way or another, I'm ready to start allocating my AUG/09 capital, and will start with the Double Diagonals, most likely to use SPY and/or DIA for those.

Position's Summary:
07/10 SPX Iron Butterfly
07/10 RUT Iron Butterfly

07/10 SPX Iron Butterfly

Now, back in the driver's seat. I was able to manage the position with TOS' Web-based interface, however, that interface is horrible in terms of managing a complex position, you don't have the risk profile charts and it is really hard to see what you need to do as you plan for your next trading day. One way or another, the market was stable and it helped.

Going into the weekend, there is a good chance for profits, unless we resume the down-movement. As of now, my plan is to exit on Monday and count my learning from these two trades.

Position's history day-by-day:
07/09 Daily Update
07/08 Daily Update
07/07 SPX Iron Butterfly
07/02 SPX Iron Butterfly
07/01 SPX Iron Butterfly
06/30 SPX Iron Butterfly
06/29 SPX Iron Butterfly
06/25 SPX Iron Butterfly
06/24 SPX Iron Butterfly
06/23 SPX Iron Butterfly
06/22 SPX Iron Butterfly

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07/10 RUT Iron Butterfly

I sure am glad to have Internet back on. Even better to see that the two iron butterflies got a gift from the market. We had 3 days around the 480 price level, this gave us the theta we needed to get back to B/E, now with the weekend, the chances of being profitable Monday are good.

We will be fine on Monday unless we drop 1 or more standard deviations. In any event, I'll exit these positions on Monday, as it is time to focus on LIVE AUG/09 trades.


Position's history day-by-day:
07/09 Daily Update
07/08 Daily Update
07/07 RUT Iron Butterfly
07/03 RUT Iron Butterfly
07/02 RUT Iron Butterfly
07/01 RUT Iron Butterfly
06/30 RUT Iron Butterfly
06/29 RUT Iron Butterfly
06/25 RUT Iron Butterfly
06/24 RUT Iron Butterfly
06/23 RUT Iron Butterfly

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07/09 Daily Update

Still unable to connect to Internet all day Today, I was able to obtain connectivity at the end of the day but it was too slow to support the desktop version of Thinkorswim. I used the web-based trading to make a small delta adjustment on RUT. Today was a good day for both positions, but I'm unable to figure out what the P&L is, will try again with TOS desktop.

I have taken snapshots of the greeks for all the open contracts, from there I can figure out current P&L based on what has already been closed. In any event, I'll also use the greeks to think about contingent orders and will place them for Tomorrow. I sure am glad Today was a quiet day and this is a great example of having a decent contingent plan for technical issues such as lack of connectivity.

Greeks for RUT Iron Butterfly:
P&L for Today: +$495
Delta: +52
Gamma: -7
Theta: 159
Vega: 197

Greeks for SPX Iron Butterfly:
P&L for Today: +$212
Delta: +6
Gamma: -4
Theta: +160
Vega: +350

In all fairness, if this were live trades I would find myself in a shopping center or any sort of Internet provider. But being paper trades I didn't stress too much. Nevertheless, I now have a backup Internet connection with a broadband wireless card (3G Network). It doesn't hurt to learn to use the Web-based version of TOS.