...And They Have a Plan. (Live.)

Laissez Faire said:
I understand.

What you're doing here doesn't seem to be trading of futures, though. It seems like you usually buy near a high and simply hold. Often through larger drawdowns and then get out when you're back in the green. That's not what I would consider trading. More like buy and hold.

I understand the profit potential is smaller with unleveraged SPY/QQQ, but at least you can hold forever without a margin call as it seems is possible can happen this time...

Best of luck regardless.
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That's his mantra: Buy... Hold... Roll... with no Stop.

IMO, there's nothing wrong with that strategy, but he can't seem to shake the habit of buying at/near tops. Again, IMO, if he's going to do that, he should wait for a sell-off, and buy at/near where his chart reading indicates a possible bottom, like just before the close this past Friday.
 
nooby_mcnoob said:
Covered calls are as dumb as it gets. Even I understand it.

Say you buy at 4480 and your target is 4580. As soon as you buy a ES micro, you sell a ES call with a strike price of 4580 for 2-4 weeks out. Maybe you'll get 2 points for selling the call. There are two outcomes:

1. Option expires in the money
2. Option expires out of the money

In case 1, you have hit your target, your broker sells your micro and you made an extra couple of points on the trade due to the option premium.

In case 2, you decide whether you are still aiming for that same target, and sell the strike again. Or you adjust. Or you exit your long trade.

It's a way of getting paid while you wait, and limits your upside but people are too obsessed with getting every tick, rather than consistently taking $$$ out of the market, IMO.
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I'm not an options guy, just trying to wrap my head around this.

He is Long the June MES at 4665. If his target was 200 points, and if I understand your example, he would also be short the MES 4865 EOM Calls w/June expiry.

Maybe I'm missing it, but where is his downside protection with that strategy, which, I think, is what he would be most interested in?

If he was willing to self-insure a 50 point drop, but wanted downside protection for anything greater, seems it would have been better to just buy MES 4615 QTY Puts w/June expiry. Not sure what they would have cost back then, but IV would have been low(er), so maybe $75 or so per contract?

Right now, he is down 255 points. Since (I think) quarterly options are American, near EOD Friday, he could have exercised his Puts which would close his MES position with a 50 point loss per contract, and then reenter Long MES at/near 4410.

Am I even close on any of that? lol
 
ondafringe said:
He is Long the June MES at 4665. If his target was 200 points, and if I understand your example, he would also be short the MES 4865 EOM Calls w/June expiry.

Maybe I'm missing it, but where is his downside protection with that strategy,
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He SOLD calls. He received premium (ie income) for the sale. The income offsets the cost basis of the futures position. There is no protection (in that scenario) beyond the income received.
 
ondafringe said:
I'm not an options guy, just trying to wrap my head around this.

He is Long the June MES at 4665. If his target was 200 points, and if I understand your example, he would also be short the MES 4865 EOM Calls w/June expiry.

Maybe I'm missing it, but where is his downside protection with that strategy, which, I think, is what he would be most interested in?

If he was willing to self-insure a 50 point drop, but wanted downside protection for anything greater, seems it would have been better to just buy MES 4615 QTY Puts w/June expiry. Not sure what they would have cost back then, but IV would have been low(er), so maybe $75 or so per contract?

Right now, he is down 255 points. Since (I think) quarterly options are American, near EOD Friday, he could have exercised his Puts which would close his MES position with a 50 point loss per contract, and then reenter Long MES at/near 4410.

Am I even close on any of that? lol
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The other poster said it. It's just getting paid a little more while waiting. If you want downside protection then you buy a put with the proceeds of the call, which is a collar I think.
 
No trades. Just another "good grief" week. I may have to actually start day trading again, because these positions are going nowhere as we are locked in a broad range way below entry.

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Continuing from trade #34...

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Wow. Just wow. One whole trade for peanuts. But I have always had this problem in extreme ranging periods. I just cannot see proper entries and exits. The sim trading went well enough, but could not engage in much live trading because of the open positions and that risk exposure.

Should have seen the open positions on Thursday morning pre-market. It was UGLY. And I know it is not over. so cannot enter long as I sense this is just a dead-cat. I mean, who would have thought of this 2-day rally yesterday morning? I've never traded through a European war before, so do not know what to expect. Plus the unknown of the Ukraine capital possibly falling plus upcoming 2-day Powell speak and NFP next week? Yikes!

Ain't out of the woods yet, so DISCIPLINE! Sit on hands, and follow the plan!

Openpositions02252022.JPG
 
tango29 said:
I was thinking about your positions this week. I was curious if you might try an add when we got creamed, and then take one off on a rally.
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Nope, no adds. We are too close to March expiry, so any adds would have to be done on Sep contract, which would be dangerous on it's nil volume. Too much uncertainty around the March contract expiration which is right around rate-hike time.
 
Haven't been updating, because it's just been a churn fest for 3 weeks. Hell, the shit was down for ~23K at one point over this period, but it's getting better (?).

Openpositions03182022.JPG


Yeah, it's getting better all right. Follow the plan while getting gut-punched. Some plan.


And we had another performance bond increase starting tonight on the equity indices, so that leaves less wiggle room. Need this war to end.
 
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