Hey Trade Theory, how are you determining the previous weeks trend? I guess this can be very subjective, thats why I ask
From $1000 to ? Trading SPX Weeklys in my Roth
- Thread starter Trade Theory
- Start date
Hey Trade Theory, how are you determining the previous weeks trend? I guess this can be very subjective, thats why I ask
I look at the market on a week to week basis with the beginning value starting with Friday’s closing price. I base direction on market conditions and implied volatility. If the implied volatility is predicting a 100 point move from start to finish and we move all 100 points in one direction, I’ll trade in that same direction the following week. If the market is choppy and doesn’t really make any move up or down, I’ll trade bullish. Although when the market is more volatile like it is now, I focus less on direction and more on levels and bigger picture macroeconomic factors that are driving price action.
why are there no posts??
Wowzers, you think SPX will be back around 3100 by this week? Whats your thought process for this trade?
Ha no way, this trade is dead in the water. I placed this trade on Friday looking for a bounce before we went limit down on Sunday and Monday.
I usually place 1 trade a week in this account. I might not trade more in this account until the volatility cools off a bit but still unsure there. I've been focusing mostly on other accounts lately, primarily intraday trading on the ES futures.
Trade 11 dead -$177.08
Starting Balance: $1001.75
Current Balance: $1642.59
Cumulative PnL: $640.84 = Account up 63.97%
Current market conditions:
What a crazy week of trade its been. Volatility went from high to higher. We're getting 100+ S&P points in the matter of minutes. Wallstreetbets is breeding millionaires. S&Ps went limit down Sunday, Monday, and Thursday only to hit limit up on Friday. The bonds are all over the place and yields are in the dumpster. Rates are low and heading lower soon. Every time the fed tries to stimulate the economy, the market laughs in Jerome Powell's face and continues to sell off. Fed fund futures are pricing in an 85% chance of cutting rates to 0 by the March 18 FOMC.
Companies are shutting down left and right as people begin to quarantine. People are in mass hysteria over the Coronavirus. My personal take on it is the fear in the world will subside as soon as the US starts mass testing for Coronavirus. South Korea is already doing so and their fatality rate published is only .1%, just like the flu. Right now the numbers look really bad because the only people who are tested for COVID are those who are very sick and need urgent treatment. Once the real numbers come out, people will be at ease, go back to work and the economy/market will begin to recover. Until that happens, I think we will continue to see extreme volatility, both to the up and downside.
Trade 12:
tIP BOT +1 BUTTERFLY SPX 100 (Weeklys) 20 MAR 20 2830/2850/2870 CALL @1.20 CBOE
Yet again, I'm positioning this week for a bounce. Identical logic as last week's trade. I'm putting a lot less risk into this trade because frankly, I don't trust the marketplace. If we break new lows early in the week I'll likely trade a bearish vertical to make up for the losses of the fly. Even though I think the worst is yet to come, the velocity of this down move leaves some room to the upside. We had a big rally today, with S&Ps up nearly 9%. I'm thinking the bulls will step in this week and have some fun. I'm taking a small bet that we will rally another 200 points in the SPX at some point throughout this week. This trade can be more rewarding to the upside because as the SPX rallies, volatility will be coming off which will work in my favor when the trade starts to go in the money. This is unique to bullish call butterflys. The closer that happens till expiration, the more the fly will be worth. I'll be closing the trade as soon as the SPX comes near 2850.
Starting Balance: $1001.75
Current Balance: $1642.59
Cumulative PnL: $640.84 = Account up 63.97%
Current market conditions:
What a crazy week of trade its been. Volatility went from high to higher. We're getting 100+ S&P points in the matter of minutes. Wallstreetbets is breeding millionaires. S&Ps went limit down Sunday, Monday, and Thursday only to hit limit up on Friday. The bonds are all over the place and yields are in the dumpster. Rates are low and heading lower soon. Every time the fed tries to stimulate the economy, the market laughs in Jerome Powell's face and continues to sell off. Fed fund futures are pricing in an 85% chance of cutting rates to 0 by the March 18 FOMC.
Companies are shutting down left and right as people begin to quarantine. People are in mass hysteria over the Coronavirus. My personal take on it is the fear in the world will subside as soon as the US starts mass testing for Coronavirus. South Korea is already doing so and their fatality rate published is only .1%, just like the flu. Right now the numbers look really bad because the only people who are tested for COVID are those who are very sick and need urgent treatment. Once the real numbers come out, people will be at ease, go back to work and the economy/market will begin to recover. Until that happens, I think we will continue to see extreme volatility, both to the up and downside.
Trade 12:
tIP BOT +1 BUTTERFLY SPX 100 (Weeklys) 20 MAR 20 2830/2850/2870 CALL @1.20 CBOE
Yet again, I'm positioning this week for a bounce. Identical logic as last week's trade. I'm putting a lot less risk into this trade because frankly, I don't trust the marketplace. If we break new lows early in the week I'll likely trade a bearish vertical to make up for the losses of the fly. Even though I think the worst is yet to come, the velocity of this down move leaves some room to the upside. We had a big rally today, with S&Ps up nearly 9%. I'm thinking the bulls will step in this week and have some fun. I'm taking a small bet that we will rally another 200 points in the SPX at some point throughout this week. This trade can be more rewarding to the upside because as the SPX rallies, volatility will be coming off which will work in my favor when the trade starts to go in the money. This is unique to bullish call butterflys. The closer that happens till expiration, the more the fly will be worth. I'll be closing the trade as soon as the SPX comes near 2850.
Last edited:
This market crash is unlike any others we've seen. The speed at which the market has fallen can only be compared to October of 1987. During that crash the VIX made it all the way to 172, I think that is a very real possibility if things continue the way they are. I've placed a few new trades in my small account this week. Monday we gapped down confirming the continued downtrend so I added some bearish verticals in SPY to offset my positive delta.
Trade 13 & 14:
tIP BOT +1 VERTICAL SPY 100 20 MAR 20 245/242 PUT @1.38 CBOE
tIP BOT +1 VERTICAL SPY 100 20 MAR 20 250/248 PUT @.86 EDGX
I believe there's more selling to come but I'm also looking to catch the bottom or at the very least, a pop up. I added a few longer duration backratio spreads in sectors that have really taken a beating looking for a potential pop up reversal. I'm a bit nervous of the assignment risk on these since I don't have the cash available to purchase the shares. If I do get assigned I'll have to exercise one of the long strikes locking in a loss on half the trade. You'll notice these were both done basically at even money so there is no risk to the downside if we continue to selloff.
Trade 15 & 16:
Looking for a big reversal in oil
tIP BOT +1 1/2 BACKRATIO XOP 100 19 JUN 20 8/11 CALL @-.24 CBOE
Upside shot in silver
tIP BOT +1 1/2 BACKRATIO SLV 100 30 JUN 20 11/13.5 CALL @-.04 ISE
I may roll those backratios down to keep them close to the money as the market continues to sell off. I've never actively traded options in a 70 VIX before so I'm learning a lot from these past few weeks.
Lastly I closed one of the verticals to lock in a small profit in case we rally up into the close of this week. I'm leaving the other on until expiration.
Trade 13 Closed:
tIP SOLD -1 VERTICAL SPY 100 20 MAR 20 245/242 PUT @1.89 ISE
+$48.98 Profit
Starting Balance: $1001.75
Current Balance: $1691.57
Cumulative PnL: $689.82 = Account up 68.86%
Trade 13 & 14:
tIP BOT +1 VERTICAL SPY 100 20 MAR 20 250/248 PUT @.86 EDGX
I believe there's more selling to come but I'm also looking to catch the bottom or at the very least, a pop up. I added a few longer duration backratio spreads in sectors that have really taken a beating looking for a potential pop up reversal. I'm a bit nervous of the assignment risk on these since I don't have the cash available to purchase the shares. If I do get assigned I'll have to exercise one of the long strikes locking in a loss on half the trade. You'll notice these were both done basically at even money so there is no risk to the downside if we continue to selloff.
Trade 15 & 16:
Looking for a big reversal in oil
tIP BOT +1 1/2 BACKRATIO XOP 100 19 JUN 20 8/11 CALL @-.24 CBOE
Upside shot in silver
I may roll those backratios down to keep them close to the money as the market continues to sell off. I've never actively traded options in a 70 VIX before so I'm learning a lot from these past few weeks.
Lastly I closed one of the verticals to lock in a small profit in case we rally up into the close of this week. I'm leaving the other on until expiration.
Trade 13 Closed:
tIP SOLD -1 VERTICAL SPY 100 20 MAR 20 245/242 PUT @1.89 ISE
+$48.98 Profit
Starting Balance: $1001.75
Current Balance: $1691.57
Cumulative PnL: $689.82 = Account up 68.86%
Nope. When those test results start coming back, the USA is going into full-blown panic mode. Mark my words. Our numbers on the positive tests, and the unemployment, and jobless claims and all the other crap is going to send this global economy into the toilet. 1987 got nothing on us.
Look at it this way...Was anyone hoarding canned goods and TP in 1987? No? Well, that's because 1987 didn't have social media, and "I came in last place but I still deserve a gold medal" attitude.
You're probably right about the full blown panic, but it won't take long for people to realize the fatality rate is significantly lower than what the initial numbers were showing, comparable to the flu at .1%. The fed will add a few notches to their good ol' balance sheet and pump the markets up. They'll start cutting checks to everyone for rent support and add liquidity to the markets directly or indirectly. Businesses will open back up and things will return back to normal, just 50% off highs. Eventually a vaccine will come out but I think people will calm down far before that happens.