August 2011 QQQ Weekly Option Trades - Final Results

ForexForex · Aug 26, 2011

Below is a listing of all my QQQ weekly option trades posted LIVE to EliteTrader from August 01, 2011 to August 26, 2011.

August 2011 QQQ Weekly Option Trades:

Trade #1: Aug01-05 Buy QQQ 56P/57C strangle +15% QQQ options VERY expensive
Trade #2: Aug08-12 Buy QQQ 52C +56% My QQQ option trade plan this week.
Trade #3: Aug15-19 Buy QQQ 53P +27% QQQ OTM Call option trade - August 15-19
Trade #4: Aug15-19 Buy QQQ 53P/54C strangle +173% QQQ OTM Call option trade - August 15-19
Trade #5: Aug22-26 Buy QQQ 53/54 Bull Call Spread -59% QQQ weekly OTM option trades - 4th and final week

Summary:

All trades were opened on average about 20 minutes before market closed (3:40pm EST) and closed the following day about 30 minutes into the trading day (10:00am EST). If held till expiry Trades #1, #2 and #3 would have produced a P/L of +100% each, Trade #4 +300% and Trade #5 -33%. Good example of not Letting Your Profits Run, the trades were closed too early. But then hindsight is always 20/20.

Compared to the Overall Market (DOW, S&P500 and NASDAQ):

Trades #1 to #5: +112% commissions included
Overall Market: -10%

DOW, S&P500 and NASDAQ - July 27, 2011 to August 26, 2011

The market gives us Lemons, I make Lemonade

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I put the ELITE in EliteTrader

KevinO · Aug 27, 2011

Congrats, very nice gains! Are you going to continue to journalize your QQQ trades?

eldorado1 · Aug 27, 2011

Cool.
It was a good month for these type of spreads. In 'usual' months I guess you would be more theta conservative. I hope.

Riffraffpatrol · Aug 27, 2011

Quote from eldorado1:

Cool.
It was a good month for these type of spreads. In 'usual' months I guess you would be more theta conservative. I hope.

LOL

He did one spread out of 5 and it lost money....

syswizard · Aug 27, 2011

Quote from Riffraffpatrol:

LOL

He did one spread out of 5 and it lost money....

Yes, but August was a rock 'n roll market....favoring option purchases despite the higher premiums.
Most of the time, in calmer markets, it's best to be selling premium.

ForexForex · Aug 28, 2011

Quote from KevinO:
Congrats, very nice gains! Are you going to continue to journalize your QQQ trades?

Maybe in a few months I will post another 1 month series of trades with the QQQ weekly options.

Quote from eldorado1:
Cool.
It was a good month for these type of spreads. In 'usual' months I guess you would be more theta conservative. I hope.

I paid little attention to the option greeks. All five trades was just Options 101 - buy options and if the underlining moves enough in your favour you make money if not you lose money.

Quote from syswizard:
Yes, but August was a rock 'n roll market....favoring option purchases despite the higher premiums.
Most of the time, in calmer markets, it's best to be selling premium.

That of course is debatable. Below are some of the ET members that disagree that option purchases is a good idea during market turmoil. All the comments were made after the 1st trade was completed and before the 2nd trade was closed.

spreadem: "Option sellers are licking their collective chops in times like these."
iceman1: "why not wait until the vola goes even higher... then you can overpay even more for the calls. let us know how that works out."
athlonmank8: "You're the one walking in front of a train...."
atticus: "I would be a seller of this one. Want to make a side bet on the call getting to a $0.60 print?"

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I put the ELITE in EliteTrader

eldorado1 · Aug 29, 2011

Quote from ForexForex:

That of course is debatable. Below are some of the ET members that disagree that option purchases is a good idea during market turmoil. All the comments were made after the 1st trade was completed and before the 2nd trade was closed.

spreadem: "Option sellers are licking their collective chops in times like these."

iceman1: "why not wait until the vola goes even higher... then you can overpay even more for the calls. let us know how that works out."

athlonmank8: "You're the one walking in front of a train...."

atticus: "I would be a seller of this one. Want to make a side bet on the call getting to a $0.60 print?"

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I put the ELITE in EliteTrader [/B]

In 9 out of 10 cases they would be right, option purchase really isn't great. Unless you are hedging the underline or have excellent prediction and timing skills. I admit, I suck in both no matter how much TA I practice but I still profit more then the average buyer.

Wish you a successful week