My option trades

Quote from kinggyppo:

a lot of new traders make the error of going long calls with high vol, not saying you are doing this but it makes it extremely difficult to overcome the theta rent, or with similar strategies, so if you are looking for a reversal up then sell a defined risk put spread, then the bleed is on your side. :)
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Thats precisely what i did. But it was also difficult guessing direction...
When the temporary reversals happened vol would drop a point or two and it would kill me.

So in that respect i guess its still a vol issue
 
Quote from babutime:

Thats precisely what i did. But it was also difficult guessing direction...
When the temporary reversals happened vol would drop a point or two and it would kill me.

So in that respect i guess its still a vol issue
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so the higher vol goes the smaller your position size should be. Lets say you have a $100,000 account, you are aggressive and put 10% up on a trade, then you need to reduce your size to 2% etc. The thing is high vol is a knife that cuts both ways, just my opinion. You may want to go back over your trades and see what you could have done differently, have a great weekend..:)
 
Quote from babutime:

Thats precisely what i did. But it was also difficult guessing direction...
When the temporary reversals happened vol would drop a point or two and it would kill me.

So in that respect i guess its still a vol issue
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What else is options trading? Nothing more than trying to out-guess the best equipped and smartest traders on the planet - as to what the next expiration's volatility will be. SIMPLE - or you you can try to guess direction on the underlying WITHOUT paying the vigorish on the options (for buyers). [

For sellers, much more reward, and more risk.... that's one reason why we don't bother with options much any longer. So much easier to trade the underlying. IMO.

All the best,

Don
 
Thanks kinggy and Don

That note on position sizing on high vol env was good. I'll keep that in mind kinggy.

And Don, I'll have to agree, trading the underlying is definitely better.

I also feel like I have a better understanding of intra day market dynamics. I'm looking at a few things such as Market Profile, etc.

Do you use it too?
 
Quote from Don Bright:
What else is options trading?
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Well, as my old boss used to say (may he rest in peace), "it's either a death of thousand cuts or a bullet to the head".

I disagree about guessing. Obviously, every trade is up to God. But as you build better models and understand the flows better, God helps you more.
 
May activity...I would have been blown out, but sold goog may calls the thursday before the FB ipo which were up...bought aapl June 590 & 600.

I think my mistake in the May aapl 625 was not looking realistically at what was happening in the market, selling and profit taking and failing to get out, when you're in the 'hoping' mindset, probably not good.


05/15/2012 15:32:47 Sold 2 VIX May 16 2012 23.0 Call @ 0.15

24.07 22.49

05/16/2012 02:14:57 MONEY MARKET PURCHASE (MMDA1)

0.00 22.49

05/16/2012 02:14:59 MONEY MARKET PURCHASE

-22.49 0.00

05/17/2012 15:18:54 Sold 3 GOOG May 19 2012 630.0 Call @ 8.8

2,631.05 2,631.05

05/17/2012 15:20:14 Bought 5 AAPL Jun 16 2012 590.0 Call @ 3.8

-1,914.81 716.24

05/17/2012 16:30:15 Bought 3 AAPL Jun 16 2012 600.0 Call @ 2.31

-701.89 14.35

05/18/2012 02:32:11 MONEY MARKET PURCHASE (MMDA1)

0.00 14.35

05/18/2012 02:32:13 MONEY MARKET PURCHASE

-14.35 0.00

05/21/2012 00:00:01 REMOVAL OF OPTION DUE TO EXPIRATION (AAPL May 19 2012 625.0 Call)

0.00 0.00

05/21/2012 00:00:01 REMOVAL OF OPTION DUE TO EXPIRATION (INTC May 19 2012 29.0 Call)

0.00 0.00

05/21/2012 00:00:01 REMOVAL OF OPTION DUE TO EXPIRATION (MSFT May 19 2012 30.0 Call)

0.00 0.00
 
Quote from babutime:
Hot Waitress Economic Indicator
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In January of 2009, a British buddy of mine went to yet another bachelor party in Lithuania and said that the the prices for whores and strippers are way down and that it is indicative of the dire state of the economy. I said that we should start publishing a composite index tracking these prices and call it the Baltic Wet Index (as opposed to the Baltic Dry Index http://www.bloomberg.com/quote/BDIY:IND).

PS. Every year I ask my Mrs to tell me what the length of the skirts is going to be this summer and it is usually a very good indicator of the market performance during the summer. This year apparently the new hot item is a mini-maxi skirt which is mini in the front and long at the back.
 
Quote from sle:

In January of 2009, a British buddy of mine went to yet another bachelor party in Lithuania and said that the the prices for whores and strippers are way down and that it is indicative of the dire state of the economy. I said that we should start publishing a composite index tracking these prices and call it the Baltic Wet Index (as opposed to the Baltic Dry Index http://www.bloomberg.com/quote/BDIY:IND).

PS. Every year I ask my Mrs to tell me what the length of the skirts is going to be this summer and it is usually a very good indicator of the market performance during the summer. This year apparently the new hot item is a mini-maxi skirt which is mini in the front and long at the back.
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Mini Maxi skirt?

Wow, not sexy at all... What is wrong with girls these days... if that's the hot summer item, then this will be one boring summer...
 
Quote from sle:

Well, as my old boss used to say (may he rest in peace), "it's either a death of thousand cuts or a bullet to the head".

I disagree about guessing. Obviously, every trade is up to God. But as you build better models and understand the flows better, God helps you more.
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Seems to me it's a question of which distributions are stable. If you can model the distribution, you can trade it. If not, then you're guessing.
 
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