Discretionary Trading by Tiras

Quote from Tiras:

I went short the market on Thursday. Bought 15 puts on ES with strike 1,540 and expiration of May 17th. I am basically all-in (based on the speculative account I am tracking here) on this position. The rationale is that the market will most likely have a strong pullback as it just hit all time high. Also, there appears to be an increased hedging activity by institutions - index put/call ratio went up on Friday and VIX is climbing, while the market is making new highs. In addition, treasuries were climbing in a last week in response to Cyprus.

If I am wrong on timing, and selloff happens from a higher level, I should at least be able to exit the position at break even.

Considering the leverage, it should be a gut wrenching ride. Trade screenshot is below.

attachment.php
More...

"all-in" is not a word used by responsible professional traders..this word is only reserved for gamblers
 
I am looking for a break of megenta trendline and resistance of SPY 155 to confirm the turn of the intermediate-term trend. Untill that happens, my view is that we are in the weak uptrend and the pullback this morning is corrective.

attachment.php
 

Attachments

I am a DT too but your "all-in" kind of surprise me. what is your edge on this trade? there's only 3 possible outcome market go up, down and sideways and you lose big 2/3. I hope you hedge a little.
 
Quote from magicz:

there's only 3 possible outcome market go up, down and sideways
More...

Agreed, but my estimate of probabilities is not 1/3 each. Also, I fully realized that market could go up after I entered the trade and then decline to my point of entry at some point before expiration where higher ivol will fully or partially offset accumulated negative theta. My estimate at the time of the trade was that odds were significantly in favor of lower prices or same prices with higher ivol in the next 30 days; so I took a plunge.
 
I got out of the option trade this morning (trade screenshot is below) for 9.25 pts gain before commissions on 15 contracts:

Bought at 20.75
Sold at 30.00

The reason I got out is that cash market opened at resistance with a significant gap down; therefore, the odds were high for some kind of rebound. In addition, I did not want to stay with the options trade over the weekend. Unfortunately, I didn’t trade the rebound as I was tied up in meeting at my regular job, and did not want to trade from a phone. I will provide account summary over the weekend.

I will be back to trading futures next week, done with options until volatility goes down.

attachment.php
 

Attachments

Midday Update 2013.04.08

SP500 is in downtrend based on 30 min timeframe. My view that the pullback that started at the market open on Friday provides good shorting opportunity. I am already short futures at 1,546.50.

attachment.php
 

Attachments

Nice job on the recent EQcurve.

Take a look at the 60M, the downchannel from 4/4 is already broken--> sideways...upwards. The 4/4/ channel 'broke' at day end of 4/5. (I only use 24 hr charts ES for the channels however = different perspective)
 
You must log in or register to reply here.
Back
Top