JP's options journal

jeffalvinson said:
Excellent analysis of these stocks, good option choices, your doing a really good job.
How did your trading consistency and profit hold up in the month of December 2018?
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Thx for your interest.
I didn't trade options the last 3-4 months of 2018. But I did test this particular strategy earlier that year.
So this journal will be the real ($) test. Also very important for me is the "profitability" vs "time spend on all this" ratio.

JP
 
jamespond said:
Nike (NKE) - long 85 Apr18'19 PUT @2.39 (stock price was ~85.81)

JP
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Does your technical analysis determine exact price values for buy limit, sell limit and stop?
Are you using trend analysis (up, down, or sideways), Moving Averages and candle formations to determine when to long or short?
For example: From my classic Pristine training from the 1990's,
in the 2 month (daily candles, 25ma & 50ma) chart of NKE below,
I see a short term uptrend, with a 5 candle pullback to the rising 25ma, a bullish COG (Changing of the Guard) hammer on March 8th.
This was a long buy trigger for March 11th if the March 11th daily candle traded just above the March 8th candle high (84.88)
The Target Sell Limit would be the March 4th high (87.99),
and the Stop would be just below the March 8th low (84.02).

[NKE, 2 months, daily candles, 25ma & 50ma]
big.chart
 
I use stochastics for almost everything. Trend determination (direction, strength, continuation / reversal) on different timeframes. Also entry, target and stop points.
There are some issues (and opportunities too) to be careful with when using options just to trade stocks with some leverage.

Basically I try to find a good weekly (monthly) trend and then enter on a smaller timeframe to grab a piece of that with some leverage.

About NKE: I agree with your analysis. The weekly stoch suggested a possible continuation. So long makes sense at your suggested place.
I was too eager to play the reversal that is just not there, so basically this was a bad call.
I will hold on to it as long as it doesn't go much above 88.
Oh well... on to the next one.

JP
 
ConocoPhillips (COP) - long 65 May17'19 PUT @1.82 (stock price was ~67.12)

Open positions are GS (long) / NKE (short)
GS is taking quite a beating last two days and starting to look ugly on daily and weekly graphs.

JP
 
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jamespond said:
Nike (NKE) - long 85 Apr18'19 PUT @2.39 (stock price was ~85.81)
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Sold NKE @2.60 (stock price was ~83.71)
P/L on this position +8%

This position looked like a dead fish in the water for a while now. The results yesterday evening were the last thing to make this go down. Shouldn't there have been a dump today I would have sold it anyway. (likely with 50% loss or more).
On the other hand it could be the start of a nice move.

Meanwhile GS keeps on bleeding hard together with most other banks.

Current positions GS (long) / COP (short)

JP
 
Good trades are not the ones that make money but the ones were you follow the system.
Classifying trades as good/bad whether they make $ or not after closure is just fooling yourself.

To put this in perspective regarding the above NKE play:

I played the reversal. Didn't work at the beginning. There were a few elements to stay in. But in the end I just got lucky to get out like this.
Is there something wrong with playing a reversal ? Not really, it's just that for me, personally, playing reversals cost me a small fortune. Somehow, timing (again for me personally) seems much easier in trends than reversals.
So therefore the "reversal" setup was sort of kicked out of the toolbox and focus is on (already existing) trends and time the entry in a lower timeframe.

JP
 
jamespond said:
Good trades are not the ones that make money but the ones were you follow the system.
Classifying trades as good/bad whether they make $ or not after closure is just fooling yourself.

To put this in perspective regarding the above NKE play:

I played the reversal. Didn't work at the beginning. There were a few elements to stay in. But in the end I just got lucky to get out like this.
Is there something wrong with playing a reversal ? Not really, it's just that for me, personally, playing reversals cost me a small fortune. Somehow, timing (again for me personally) seems much easier in trends than reversals.
So therefore the "reversal" setup was sort of kicked out of the toolbox and focus is on (already existing) trends and time the entry in a lower timeframe.

JP
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I agree with what your saying, its really easier to follow the trend of a stock, than to play the counter trend.
You had a +10 point rise on GS from the March 11 entry to March 19, why didn't you take partial profits on March 19, or at least move you stop to breakeven?
 
jeffalvinson said:
I agree with what your saying, its really easier to follow the trend of a stock, than to play the counter trend.
You had a +10 point rise on GS from the March 11 entry to March 19, why didn't you take partial profits on March 19, or at least move you stop to breakeven?
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I used to daytrade futures and there I would always put in a stop together with the entry order.
But with the options plan, there is no hard stop in place. And there are a few reasons for that:
I'm not always using (horizontal) levels were I can put a price on and then decide that it's breached.
Another matter is the fact that option prices don't always follow the stock price in a 1 on 1 relationship. (for various reasons). That's an extra difficulty to put an exact stop in.
Anyway, testing showed it's counterproductive for my system to put a hard stop in.

Concerning the partial profit. I did do that in this journal. Feels great having a (partial) free ride and all. But looking at it objectively, I cut my profits short. And quite a lot in fact.

No stop on GS. It's just a very bad performer right now, all banks are in fact. It's still looking ok for me longer term. But I'm afraid the expiry date is too soon to save it. For now I'll hang on to it at least another week.

JP
 
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