Seems like other people have more of an issue with his equity swings than he does!
2014: The Battle for Survival
- Thread starter neke
- Start date
Seems like other people have more of an issue with his equity swings than he does!
Every draw-down is emotionally draining, but that is the nature of the work. One thing I have been looking at with this last months loss is how much I have been "paying to play" options. My findings are even more troubling. Basically the costs in question are from two sources
1) bid-ask spread (or slippage). When you have an option with bid 7.00 and ask 9.00. If you buy at ask, and sell at bid, you've instantly lost 22% of the premium. Of course you could do better by putting in a bid at 8.50, and selling at 7.50 - reduces the 'cost' to 12% - with reasonable chance of getting an immediate fill. Part of the solution is to only trade options with better liquidity, but avoiding the slippage is impossible if you must get fills when you want. I figure my true options slippage cost has been between 5% and 10% of the premium. Over the period in question (Nov 2014 to Mar 2015), I made 182 option trades (round-trips) with total purchase premium of $4,564,000. At that rate, that works out to a slippage cost of between $228,000 and $456,000. Now I am getting really frightened how much I have paid to the market maker. The strategies themselves are not to blame, but the cost trumps whatever edge there was.
2)Commission. Well that is inescapable. It worked out to $30,065 for those option trades. That again is another cost to play.
The summary is that I have to be more selective in my option plays, restrict trading to ones with best liquidity (which at times is not good when I want to make the trade), and possibly look to elongate my trading timeframe for options. Its almost a continuous cycle of learning and re-learning.
A retail account should be able to trade options at very close to mid regardless of liquidity of the options.
All the market makers want to interact with retail flow. They even pay money to brokers for the privelege.
All the market makers want to interact with retail flow. They even pay money to brokers for the privelege.
How close to the mid? From my experience, in the example I gave, yes I could get a fill at 8.50, but almost certainly not at 8.00 (unless the market has meanwhile moved against me). And of course I want fast execution (not let it sit there and let the situation change).
You might be able to get that for 8.10. Sometimes your fill will be 8.5 but you should find more executions at mid than your assumptions allow.
Interesting chart...it appears that if Neke had stopped trading for the month as soon as that early rising LTL broke down, he'd had saved himself nearly $60K in losses.
I think a study is in order:
Do Risk Management Rules Based On Technical Analysis of One's Evolving Equity Graph Preserve Capital?
I would call it sideways, as performance goes. You have made 16K since November (hard to see it on the chart), so that is still profitable, although "only" 3K per month...
Period Update for April (4/4/2015 - 5/2/2015) (4 weeks)
Nice month, up 68K (21%). Almost a complete recovery of last month's loss.
My options trading came back alive this month, especially OPN-OPM. The performance there is vastly outperforming what I had in mind at the beginning of the year, although I always knew the potential. Still trying to make headway with OPN-FCR.
Looking for even better selectivity in May. That is the key to outperformance.
Nice month, up 68K (21%). Almost a complete recovery of last month's loss.
My options trading came back alive this month, especially OPN-OPM. The performance there is vastly outperforming what I had in mind at the beginning of the year, although I always knew the potential. Still trying to make headway with OPN-FCR.
Looking for even better selectivity in May. That is the key to outperformance.
Code:
--------------------------------------------------------------------------------
Opening Balance: 323,607
Net gain for period 67,675
Cash Withdrawal (3,500)
------------------------------------------------
Net Balance: 387,782
For the Thread YTD 2015 (1/3/2015 - 5/2/2015)
Opening Balance: 256,099
Net gain 146,683 (Up 57%)
Cash Withdrawal (15,000)
------------------------------------------------
Net Balance 387,782
----------------------
TRADES
TYPE Exit Date/Time P/L
OPTION 2015-04-06-15-09-39 17210
STOCK 2015-04-06-14-03-00 3485.3
STOCK 2015-04-06-15-54-44 -2457.1
STOCK 2015-04-06-15-55-12 -1180.4
STOCK 2015-04-08-14-26-46 -884
STOCK 2015-04-08-10-42-56 232.2
OPTION 2015-04-08-15-17-17 850.3
OPTION 2015-04-08-11-07-46 -6095.6
STOCK 2015-04-08-15-27-43 -556.9
STOCK 2015-04-09-09-43-37 3055.1
STOCK 2015-04-09-15-52-13 5164.3
OPTION 2015-04-09-11-23-59 13049.6
STOCK 2015-04-10-10-37-33 -3738.7
STOCK 2015-04-10-09-31-05 1423.4
OPTION 2015-04-10-15-36-44 6884
OPTION 2015-04-10-10-02-41 -20609.5
OPTION 2015-04-10-14-52-21 18028.2
OPTION 2015-04-10-10-18-31 -3776.7
STOCK 2015-04-13-10-37-32 -1857.5
STOCK 2015-04-13-14-48-03 1894.9
OPTION 2015-04-13-13-56-56 2087.7
STOCK 2015-04-14-15-51-40 1410.1
OPTION 2015-04-14-12-33-17 -10068.5
STOCK 2015-04-14-15-17-48 -1304.9
STOCK 2015-04-15-16-27-17 -8936.1
STOCK 2015-04-16-12-56-04 420.9
STOCK 2015-04-16-10-29-06 -2303.8
OPTION 2015-04-16-10-28-59 -6217.5
STOCK 2015-04-16-10-20-16 -4009.9
STOCK 2015-04-16-15-06-25 2884.5
STOCK 2015-04-17-13-31-09 8734.8
STOCK 2015-04-17-15-55-13 -3410.5
STOCK 2015-04-20-15-57-18 -99.4
STOCK 2015-04-21-15-01-45 -5999.3
STOCK 2015-04-21-12-36-17 -4573.3
OPTION 2015-04-21-15-40-05 -9330.6
STOCK 2015-04-22-11-23-06 3608.8
OPTION 2015-04-22-15-48-30 12964
STOCK 2015-04-22-15-20-29 3450.8
STOCK 2015-04-23-14-44-00 -1169.4
STOCK 2015-04-23-11-27-34 -114.4
OPTION 2015-04-24-10-33-48 1977.9
STOCK 2015-04-23-14-42-54 -1973.7
STOCK 2015-04-24-10-32-33 -2035.3
STOCK 2015-04-23-19-19-55 -813.8
STOCK 2015-04-24-11-45-00 11815.1
OPTION 2015-04-24-13-04-07 16200.3
STOCK 2015-04-24-09-35-11 -11.1
STOCK 2015-04-24-15-56-56 -2098.4
STOCK 2015-04-24-15-44-06 1604.1
STOCK 2015-04-24-15-48-26 1138.6
STOCK 2015-04-24-13-26-19 204.6
STOCK 2015-04-27-15-55-17 -3624.6
OPTION 2015-04-27-10-56-19 29803.2
STOCK 2015-04-28-09-50-47 909.4
STOCK 2015-04-28-10-02-23 -5285.4
OPTION 2015-04-28-10-13-44 -10449.6
STOCK 2015-04-28-10-17-54 12466.7
STOCK 2015-04-28-15-50-05 -6869.4
STOCK 2015-04-29-15-55-20 4683.3
STOCK 2015-04-29-15-55-22 -5226.4
STOCK 2015-04-29-15-49-22 2088.9
OPTION 2015-04-29-15-50-48 6660.3
STOCK 2015-05-01-09-31-15 -10481.5
OPTION 2015-05-01-14-46-09 18759.2Period Update for April (5/2/2015 - 5/31/2015) (4 weeks)
Ugly month, down 51K (13%).
First week was really ugly, down 99K (25%). Managed to recover some of that the rest of the month. But it was sheer lack of discipline. Always too quick to open the floodgates to take more trades after a successful run, feeling I could make more. Unfortunately that always results in crappy trades, and big toll on my performance, especially with options - where the cost of each trade is significant.
Looking for better selectivity in June (again!). That is the key to outperformance. The roller-coaster performance since November last year is becoming alarming.
Ugly month, down 51K (13%).
First week was really ugly, down 99K (25%). Managed to recover some of that the rest of the month. But it was sheer lack of discipline. Always too quick to open the floodgates to take more trades after a successful run, feeling I could make more. Unfortunately that always results in crappy trades, and big toll on my performance, especially with options - where the cost of each trade is significant.
Looking for better selectivity in June (again!). That is the key to outperformance. The roller-coaster performance since November last year is becoming alarming.
Code:
--------------------------------------------------------------------------------
Opening Balance: 387,782
Net loss for period (50,613)
Cash Withdrawal (5,500)
------------------------------------------------
Net Balance: 331,669
For the Thread YTD 2015 (1/3/2015 - 5/31/2015)
Opening Balance: 256,099
Net gain 96,070 (Up 37%)
Cash Withdrawal (20,500)
------------------------------------------------
Net Balance 331,669
----------------------
TRADES
TYPE Exit Date/Time P/L
STOCK 2015-05-04-10-36-41 2176.7
STOCK 2015-05-06-15-11-00 -15502.6
STOCK 2015-05-04-15-55-14 4109.8
STOCK 2015-05-05-14-00-07 -2236.1
OPTION 2015-05-05-11-44-30 -7726.8
OPTION 2015-05-06-12-12-24 -22510.1
OPTION 2015-05-05-12-03-51 6257
STOCK 2015-05-05-15-33-54 -42.9
OPTION 2015-05-06-15-26-34 4876.1
STOCK 2015-05-06-15-18-25 2316.4
OPTION 2015-05-07-10-47-31 -1300.1
OPTION 2015-05-06-10-59-40 -95.8
OPTION 2015-05-06-15-49-08 1737.8
OPTION 2015-05-06-12-10-24 -10516.7
STOCK 2015-05-07-10-45-54 -229.7
STOCK 2015-05-07-10-22-52 -4333.3
OPTION 2015-05-07-10-02-09 -16205.9
OPTION 2015-05-07-09-48-26 -13045.8
OPTION 2015-05-07-10-44-54 -1534.8
OPTION 2015-05-07-11-11-33 -9691.9
STOCK 2015-05-07-15-50-40 -6117
STOCK 2015-05-08-09-47-46 -4100.5
STOCK 2015-05-08-15-30-18 -6365
STOCK 2015-05-08-11-50-52 1269.2
STOCK 2015-05-11-09-53-37 4792.4
OPTION 2015-05-11-09-35-42 -149.7
STOCK 2015-05-12-10-03-55 3580.7
STOCK 2015-05-12-11-10-57 2573.9
OPTION 2015-05-12-15-46-34 23909.5
OPTION 2015-05-12-12-00-13 -4418.3
OPTION 2015-05-13-15-51-30 -2599
STOCK 2015-05-13-15-55-18 -345
STOCK 2015-05-13-15-55-17 -1482.5
STOCK 2015-05-14-10-43-23 8456.1
STOCK 2015-05-14-10-08-28 -1546.5
OPTION 2015-05-15-10-28-51 1181
OPTION 2015-05-15-15-37-43 20785.6
OPTION 2015-05-15-09-58-42 -9707
OPTION 2015-05-15-15-35-21 6246.2
STOCK 2015-05-18-10-22-07 17133.3
OPTION 2015-05-18-15-06-05 -10156.7
OPTION 2015-05-18-10-34-04 2917.9
OPTION 2015-05-18-15-03-59 -21647.3
OPTION 2015-05-18-15-14-13 -5485.3
OPTION 2015-05-19-09-31-16 -1726.8
STOCK 2015-05-19-09-36-35 -296.6
OPTION 2015-05-19-15-53-00 4326.5
OPTION 2015-05-21-09-31-05 -13581.7
STOCK 2015-05-19-15-51-22 7492.5
STOCK 2015-05-19-15-45-35 6293.3
STOCK 2015-05-19-15-49-17 -1116.8
STOCK 2015-05-21-15-55-17 754.3
STOCK 2015-05-20-13-46-32 1423.5
OPTION 2015-05-21-12-06-05 -3018.4
OPTION 2015-05-21-12-03-20 574.7
OPTION 2015-05-21-15-22-18 3245
STOCK 2015-05-22-15-51-47 6266.2
OPTION 2015-05-22-13-26-45 -7590.9
OPTION 2015-05-22-15-51-13 7632.8
STOCK 2015-05-26-10-40-00 2784.7
OPTION 2015-05-26-09-35-17 -1149.6
STOCK 2015-05-26-15-55-17 -3230
STOCK 2015-05-27-09-32-29 160.9
STOCK 2015-05-27-11-39-47 -13705.5
STOCK 2015-05-27-10-32-41 946.9
STOCK 2015-05-27-15-55-15 -1640.6
STOCK 2015-05-28-09-49-51 8106.9
OPTION 2015-05-28-10-57-59 -8752.5
STOCK 2015-05-28-09-52-40 6261
STOCK 2015-05-29-14-22-59 -2957
STOCK 2015-05-29-15-44-14 2376.9
OPTION 2015-05-29-12-30-49 14214.9Adding the last 2 months' results to this (+17K) you have made 33K in 7 months. Calculated by your account size, you are making 2-3% monthly...
And before someone asks why am I accounting from November, because as you mentioned, that is when the roller coaster started...
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