Option Experts

[lindq]

Quote from youngtradersla:

Below are my trades for the past few months. . .
AGAIN, if these were successful, I would not be here asking for comments.

Your problem is not with your options, but with the underlying. What is your strategy for the underlying? You don't appear to have one.

Rule number One (thru 150)...do not trade options until and unless you are first successful in trading equities. Otherwise, you will simply accelerate your losses, complicate what is already a difficult task, and put yourself quickly out of business.

This is doubly true for selling naked, especially with your lack of experience. You're setting yourself up for getting seriously wacked.

 

[youngtradersla]

Quote from steve46:



A person would need to know

1. What your reason for entry was.
To make money

2. What if any edge you thought you had for the trade
News, Earnings, big gains or losses in price, Time decay, Charting

3. What order type did you use
Limit only, always and forever

4. What your time frame are you trading on
1-2 weeks, OR front month expiry

5. What your expectation was for maintenance of the position
Little to none, GTC orders to sell 1/2 or all when profit reached

6. What your position size was
Listed above

7. What your stop loss is
With the size of most of these trades, this is not an issue

8. and if you did not exit via Stop loss, why did you exit?
Expired worthless, Assignment, or lost more than 50%

In fact, you should be keeping a log of each trade that has all this information easily at hand.

I do

If you want to interest someone with the expertise to help you, I would put it all in a single post, starting with the first entry.

I may re-post a specific trade or two, but it seems that direction is the issue here. After answering this I see I have a good handle on the options all around, but the stock itself is the issue.

THEN, ask for comments...Even though none of these folks have clue, you may get one of the good guys to look in and help you out

If that is the case then why is anyone here?

 

[youngtradersla]

Quote from forex-forex:

I would stay away from any "Selling to Open". Premiums are too low and one bad trade can wipe out 10 good trades. Stick to long ATM options.


Are the short options causing most of your losses?

All of these are spreads of some sort, I MUST "sell to open" somewhere to reduce cost. I don't short options. (I know this is not the best formatt to post so many different trades).

 

[youngtradersla]

6/1/2006

Action Qunity Symbol Type Price Delta Theta Vol Prob
BTO 3 VIXFW Jun 17.5C .53 .51 -.04 88% 92.3
STO 6 VIXFD Jun 20 C .23 .27 -.03 88% 47.7
BTO 3 VIXFX Jun 22.5 C .18 .09 -.01 88% 15.5

Short term butterfly
Max profit: $690.00
Max risk: $119.85

Indicators: modified Elliott wave theory, probability calculator

This trade was entered as planned, I had about $300 profit at one point and ordered a sell order but I was unable to get out. It ended up expiring worthless. I tried to sell about 1 week prior to expiry.

Thoughts?

 

[rallymode]

Quote from youngtradersla:

6/1/2006

Action Qunity Symbol Type Price Delta Theta Vol Prob
BTO 3 VIXFW Jun 17.5C .53 .51 -.04 88% 92.3
STO 6 VIXFD Jun 20 C .23 .27 -.03 88% 47.7
BTO 3 VIXFX Jun 22.5 C .18 .09 -.01 88% 15.5

Short term butterfly
Max profit: $690.00
Max risk: $119.85

Indicators: modified Elliott wave theory, probability calculator

This trade was entered as planned, I had about $300 profit at one point and ordered a sell order but I was unable to get out. It ended up expiring worthless. I tried to sell about 1 week prior to expiry.

Thoughts?

You used modified elliott wave theory to bet on a vix fly? No offense but this has got to be the strangest trade i've seen on this board. I wont even start with the issues with vix options, flies wont gain much until the last couple of days of the exp cycle. There are much better ways to play a spike in vix than to use an OTM fly unless the MM who took the other side is your friend and its his bday.

As far as your other trades, no way you will get any constructive criticism unless you post more details as steve suggested. Also, understanding that all options strategies that you use have negative expectancy over the long haul will be a good start. Having said that, losing money is not all that uncommon infact its the norm. Sorry for the depressing news.

 

[forex-forex]

Quote from youngtradersla:

All of these are spreads of some sort, I MUST "sell to open" somewhere to reduce cost. I don't short options. (I know this is not the best formatt to post so many different trades).

Just a small correction - You are shorting options by "selling to open", I think you might have shorting options mixed up with "naked options".

 

[forex-forex]

Quote from rallymode:

You used modified elliott wave theory to bet on a vix fly? No offense but this has got to be the strangest trade i've seen on this board. I wont even start with the issues with vix options, flies wont gain much until the last couple of days of the exp cycle. There are much better ways to play a spike in vix than to use an OTM fly unless the MM who took the other side is your friend and its his bday.

As far as your other trades, no way you will get any constructive criticism unless you post more details as steve suggested. Also, understanding that all options strategies that you use have negative expectancy over the long haul will be a good start. Having said that, losing money is not all that uncommon infact its the norm. Sorry for the depressing news.

That's odd - steve46 had posted then deleted a similiar message in the last 10 minutes. I wonder if steve46 and rallymode are the same poster?

 

[steve46]

Hardly, there were just too many things wrong with the trade. I didnt want to open a can of worms.

Now I am sure you have some jewel of information you want to offer.

Go right ahead

Steve

Edit:

What the hell, I can sleep when I'm dead right?

alright then, first lose the Elliot Wave crap. That stuff is a net loser. Do not trade using Elliot Wave.

Second, go to Ivolatility.com (www.ivolatility.com) and sign up for a basic (free) membership. Use that resource to check out the historical volatility of the issues you want to trade.

Third, review Chapter 10 of McMillan's "Options as a Strategic Investment". Its worth your time to get this right so you don't ever make this mistake (these mistakes) again.

Fourth, you need to get familiar with order types and how to close out a position. I checked open interest and the VIX has enough action to accomodate you providing you know WHEN AND HOW to put on the position and WHEN & HOW TO EXIT.

Finally, I note that you put on this position early in June. If you had looked at the historical vol for this tradeable you would see that this is the time when it is likely to hit its 52 week high. That is exactly what it did about mid June, holding that high until mid July. If you wanted to trade this one, I can think of several strategies that would have worked better.

I think thats a good start.
Steve

 

[pattersb]

Quote from youngtradersla:

OK, Lets get a few things clear here.

1. I am here to learn

2. If you don't have anything intelligent to say, DON"T embarrass yourself by showing your IQ to the world.

3. I never said I have any "prowess" in these trades.

4. I only trade options

5. Read Options as a strategic investment, Market Wizards, Super-preformance stocks, and have the optionetics 2 day seminars on tape (for much much less than anyone else will ever imagine.) The contrarian investor, Beating the Street, the Volatility Course, and a few others.

All that being said, I am posting here to get some feedback, good, sound positive feedback. If you want to be stupid, beware!

All the trades I will post have already expired.

So, if you have backtesting skills, or knowledge of the stocks in question, please feel free to comment.

WARNING: Flamers will be vaporized via atomic warheads.

.... um .... I'll get back to you after you've had some time to grow up.

the post wasn't a request for a list of your failed trades. You would have been better off explaining your reasoning for one or two.

definitely a member of 95% club.

 

[daddy'sboy]

Steve46 writes: "alright then, first lose the Elliot Wave crap. That stuff is a net loser. Do not trade using Elliot Wave."

Sorry to differ on this point Steve, but you've got to use something to get you into a trade and EW is as good as any other t.a. (it's all pretty subjective anyway and by far the least important part of a trade), what else would you use to pull the trigger - a coin flip?
daddy's boy