OEX weekly options
- Thread starter kalikahuna
- Start date
Stanford
You guessed right on my problem. I guess I was tired from too much multi tasking today. I apparently was looking at the premiums on the CALL side instead of the PUT side for closing. I had lunch, a rest, read a book a bit to relax and just came back up 5:15 p.m. and checked out what my subconsious was telling me.
It didn´t make sense because I was writing down the wrong numbers. The credit spread trade made a $150 in a 3 point move of the OEX and after $52 in commissions for a four way $52 ended up making a net profit of $98. This on 5 contracts.
I had one running the other way as well as I had no idea which way the market was going. And I wanted the test to get some idea of returns and how it worked. The losing credit spread lost about $500 or so. So the lessons learned are:
a) make darned sure you are working a weekly bar in the right direction to make the trade.
b) Trade only with the trend
c) And you only need a 3 point move to scalp a hundred bucks on 5 options. That requires $2500 in margin.
I´ll try it again on Monday.
You guessed right on my problem. I guess I was tired from too much multi tasking today. I apparently was looking at the premiums on the CALL side instead of the PUT side for closing. I had lunch, a rest, read a book a bit to relax and just came back up 5:15 p.m. and checked out what my subconsious was telling me.
It didn´t make sense because I was writing down the wrong numbers. The credit spread trade made a $150 in a 3 point move of the OEX and after $52 in commissions for a four way $52 ended up making a net profit of $98. This on 5 contracts.
I had one running the other way as well as I had no idea which way the market was going. And I wanted the test to get some idea of returns and how it worked. The losing credit spread lost about $500 or so. So the lessons learned are:
a) make darned sure you are working a weekly bar in the right direction to make the trade.
b) Trade only with the trend
c) And you only need a 3 point move to scalp a hundred bucks on 5 options. That requires $2500 in margin.
I´ll try it again on Monday.
Yes! Thanks to Donnap for contributing and chiming in. Us beginners need lots of help. I didn´t see his blurb until after typing my response to you. My apologies for ignoring him.
TJ
Your article was long on fear, but vague in usefulness. I kind of like technical articles that tell HOW TO! Or explain the ins and outs of stuff. You know the nitty gritty.
I see you are going to follow up in a series, so I´m presuming along here, you will be telling us how to trade them without losses, or under what conditions to control something going wrong?
Be interested in articles explaining a money making trade setup and conditions to implement it, with particulars for entry and exit. Everybody learns a trick or two. Like the guy dealing in millions of dollars, with his trading the settlement price by leading, or going contrary to the pack. It was interesting reading, and nicely informative, but not the stuff of making money with little setups to make money for the retail trader. At least that was the opinion I formed.
Interestingly enough, I did sort of pick up on the MOC remark afterward. I looked it up in GOOGLE as he suggested, but all I got was it was some sort software bug for headers in web pages. Then I remembered with these failing grey brain cells. Haven´t used a MOC order for 25 years. I sort of had forgot all that stuff we used to have to use with discount brokers over the phone. The jargon literally escaped my memory for lack of usage.
Since I´m learning spead trading from the beginnings, I´m a raw amateur again anyway.
TJ
Your article was long on fear, but vague in usefulness. I kind of like technical articles that tell HOW TO! Or explain the ins and outs of stuff. You know the nitty gritty.
I see you are going to follow up in a series, so I´m presuming along here, you will be telling us how to trade them without losses, or under what conditions to control something going wrong?
Be interested in articles explaining a money making trade setup and conditions to implement it, with particulars for entry and exit. Everybody learns a trick or two. Like the guy dealing in millions of dollars, with his trading the settlement price by leading, or going contrary to the pack. It was interesting reading, and nicely informative, but not the stuff of making money with little setups to make money for the retail trader. At least that was the opinion I formed.
Interestingly enough, I did sort of pick up on the MOC remark afterward. I looked it up in GOOGLE as he suggested, but all I got was it was some sort software bug for headers in web pages. Then I remembered with these failing grey brain cells. Haven´t used a MOC order for 25 years. I sort of had forgot all that stuff we used to have to use with discount brokers over the phone. The jargon literally escaped my memory for lack of usage.
Since I´m learning spead trading from the beginnings, I´m a raw amateur again anyway.
Well the only money earned this week, was the Monday Tuesday trade, which was a straight direction buy and sell option trade. Made $1195 net for the week. Was disappointed I didn´t get in a weekly credit spread trade. The premiums were just not there within my parameters.
I also learned since the rectangular flag pattern of the market has took off again in the BULL TREND ( target 550 in the OEX? ) that my system for trading straight option trades works in congestion and trading range patterns, but does not work in the trend when it starts to run again.
Spent an hour typing up a CREDIT SPREAD SECRETS data booklet for myself in different systems and market conditions as a reminder. GOT 11 SECRETS in there. My private reference library. Helps to decide how to trade current market conditions with credit spreads.
Learned a lot this week.
I also learned since the rectangular flag pattern of the market has took off again in the BULL TREND ( target 550 in the OEX? ) that my system for trading straight option trades works in congestion and trading range patterns, but does not work in the trend when it starts to run again.
Spent an hour typing up a CREDIT SPREAD SECRETS data booklet for myself in different systems and market conditions as a reminder. GOT 11 SECRETS in there. My private reference library. Helps to decide how to trade current market conditions with credit spreads.
Learned a lot this week.
I believe that in trading one has to focus on the things that would hurt, not on the things that would make money. When I wrote the post I was thinking that it might be viewed as nitty gritty, so I am glad lad you did not find it nitty gritty. I think the how tos can get one going, but it is not the thing that would make the difference. Some edges are conceptual.
Excellent Falconview! The word secrets make human curious. What are some of the secrets Falconview?
If I were to make a suggestion it would be that in a future post, you show your complete position both in cash and in options/underlying, then ask this question what are my risks? You give your answer to your own question, and then ask others to tell you if they see other risks you may have overlooked.
falconview, entertaining to watch you wing it. Keep it up.
Elite Think and TJ
Thanks for the advice on the risks TJ. Again, makes me rethink things a bit. Always a good thing.
Elite Think
Got a laugh out of the entertainment bit. Thanks! Actually as a self made man and old to boot, I don´t give a darn about embarrassment, or shame or that stuff that effects younger people. I´m quite willing to let my underwear dry out on the washing line. ( grin! )
TJ
In the words of the IMMORTAL ex-President Bush Jr. when asked about the SECRETS of the BONE AND SOMETHING CLUB he belonged to in school. It wouldn´t be a SECRET if I told you!
Will always remember that line! One of his more sensible ones I admit during his term in office as a puppet.
Thanks for the advice on the risks TJ. Again, makes me rethink things a bit. Always a good thing.
Elite Think
Got a laugh out of the entertainment bit. Thanks! Actually as a self made man and old to boot, I don´t give a darn about embarrassment, or shame or that stuff that effects younger people. I´m quite willing to let my underwear dry out on the washing line. ( grin! )
TJ
In the words of the IMMORTAL ex-President Bush Jr. when asked about the SECRETS of the BONE AND SOMETHING CLUB he belonged to in school. It wouldn´t be a SECRET if I told you!
Will always remember that line! One of his more sensible ones I admit during his term in office as a puppet.