10 weeks - 100 trades
- Thread starter optisum
- Start date
Hi optism
I have done fairly well trading out of the money weekly options. As you know you have to be pretty good at finding stocks that are going to rise or fall fast with in the few days due to the fact if the stock stays flat you can lose your entire investment. That is if you don't sell the option for a much lower price. I was doing some research and realized if I bought in the money options my gains may be less but the stocks that stay flat in the money obviously hold there value. I have come to the conclusion that protecting your 100% is more important then the extra gains that you may receive with the out of the money options. In doing so the extra gains may be compromised by the money you save with the options that keep there value being in the money with the stocks that are staying flat. Also this allows for less volatility and allows a smoother compounding process if you choose to compound.
Just wanted to here your thoughts on the subject. Also I like the way that you basket trade. I thought about diversifying a little more. For instance instead of making four trades a week I will make 8 with reducing my risk per trade in half to allow less volatility.
Trades for this week:
AAPL 2x: Sell 2x 405.0 Call / Buy 3x 410.0 Call
BAC 20x: Buy 2x 11.5 Put / Sell 1x 12.0 Put
BBRY 10x: Sell 3x 14.5 Call / Buy 3x 15.0 Call / Buy 2x 14.0 Put / Sell 2x 14.5 Put
BIDU 10x: Sell 1x 92.5 Call / Buy 2x 95.0 Call
C 10x: Buy 2x 45.0 Put / Sell 3x 45.5 Put / Buy 1x 46.0 Put
F 20x: Sell 1x 15.0 Call / Buy 3x 15.5 Call
GOOG 1x: Buy 1x 875.0 Call / Sell 3x 870.0 Put / Buy 2x 875.0 Put / Buy 1x 880.0 Put
IBM 5x: Buy 2x 200.0 Call / Sell 1x 195.0 Put / Buy 1x 200.0 Put
NDX 1x: Sell 2x 2850.0 Call / Buy 3x 2900.0 Call / Sell 2x 2850.0 Put / Buy 2x 2900.0 Put
SPY 5x: Sell 3x 157.5 Call / Buy 3x 158.5 Call / Sell 3x 158.0 Put / Buy 3x 158.5 Put
AAPL 2x: Sell 2x 405.0 Call / Buy 3x 410.0 Call
BAC 20x: Buy 2x 11.5 Put / Sell 1x 12.0 Put
BBRY 10x: Sell 3x 14.5 Call / Buy 3x 15.0 Call / Buy 2x 14.0 Put / Sell 2x 14.5 Put
BIDU 10x: Sell 1x 92.5 Call / Buy 2x 95.0 Call
C 10x: Buy 2x 45.0 Put / Sell 3x 45.5 Put / Buy 1x 46.0 Put
F 20x: Sell 1x 15.0 Call / Buy 3x 15.5 Call
GOOG 1x: Buy 1x 875.0 Call / Sell 3x 870.0 Put / Buy 2x 875.0 Put / Buy 1x 880.0 Put
IBM 5x: Buy 2x 200.0 Call / Sell 1x 195.0 Put / Buy 1x 200.0 Put
NDX 1x: Sell 2x 2850.0 Call / Buy 3x 2900.0 Call / Sell 2x 2850.0 Put / Buy 2x 2900.0 Put
SPY 5x: Sell 3x 157.5 Call / Buy 3x 158.5 Call / Sell 3x 158.0 Put / Buy 3x 158.5 Put
Sorry for answering so late, I didn't see that post.
At the moment I concentrate on high probability trades. So far (10 years) I've been trading directionally, so I'm looking to diversify / new challenge. I also believe in diversification - if I have a method that works on all (most) markets, there is higher chance that it will be working in the future. I'm not disregarding edges specific to a particular market, but simply I would never put my money on it. Also, smooth equity curve is what I'm after. Newbies are often taught to forget % win. And it's true when it comes to just being profitable, but high probability trades make it so easy to compound.
All the best.
What's up CBC. At the moment I have just been trading individual stocks. I am though looking into the SPX and several ETF's. For instance today I was short puts on TSLA and TSLA rallied today. I think it was one of the few stocks that actually was up. I would imagine any ETF puts would have worked out better. Like I previously posted I would sacrifice monster gains with more stability to the downside. In this game you can make several hundred percentage points moving forward but only 100% percentage point going backwards. So sacrificing a little upside to minimize your downside is a huge advantage. Especially if you are compounding.
Thanks for your reply! I probably will go check out the SPX now. Ha Ha!
Yea, tell me about it. I've been trading index opt, lost my last 6 or so trades. Although 1 or them was my fault caus I accidentally brought a put instead of a call .
Well, that's why's I only use 1k contracts when trying something new.
I went back and checked and stock options seemed to av favoured my strategy a lot better. Last index option I ever trade
for the time been.Thanks for shedding some light on your itm trading. I always saw lots of trades going through itm and I thought it was just paranoid opt traders
I know why u trade the weeklies.... Iv landed some nice trades in expiry week and I shall join u on the weeklies one day.
Well,
This experiment ended with an utter failure, good job it's only demo. Nevertheless, I realized that it has to work - current implied volatility doesn't tell me where market will be at expiration and that's the only thing that matters for my spreads.
I've downloaded vix data and will use it guesstimate historical spx options prices. I will plug in these prices to my calculator to see if my spreads are statistically profitable.
This experiment ended with an utter failure, good job it's only demo. Nevertheless, I realized that it has to work - current implied volatility doesn't tell me where market will be at expiration and that's the only thing that matters for my spreads.
I've downloaded vix data and will use it guesstimate historical spx options prices. I will plug in these prices to my calculator to see if my spreads are statistically profitable.
Why? I thought it was a great thread and would like to see more like it.
Trades were posted prior to being taken.
All trades were reported.
Because it was in a demo account, what difference does it make?
Oh yeah and if you had looked at any of the images he posted early in the journal you have noticed they were headed "Paper Trading"