Taking 320K to 3.5million by Year End 2009

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Weekly Update for week 35/50 ended 09/12/2009

Slow week, up 16K (4.4%). Not a lot happened in the holiday-shortened week as I was away from the system most of the time.

A nice collection of single hits (11 gains out of 13 trades) was marred by a set-back on BIDU on Thursday. For the most part was fading the excess moves in select stocks using put options, and that worked fine until I was dazed by BIDU on thursday, as the stock kept climbing higher and higher to the close, blasting through its 52-week high. The strength in the market is incredible; there wasn't even a meaningful pull-back to buy into.

Looking forward to next week.

Code: 
Opening Balance:               	    	364,366
Net gain for the week 		         16,495
------------------------------------------------
Net Balance:                   		380,861

Number of Trades	            	 13
Number of Profitable Trades    	    	 11


Since Inception of Thread   01/10/2009 - 09/12/2009

Opening Balance:                   	320,064
Net gain (Less Margin Interest)		 60,797	(Up 19%)
------------------------------------------------
Net Balance				380,861

Number of Trades	           	922
Number of Profitable Trades        	576


TICKER	ENTRY DATE/TIME		EXIT DATE/TIME		QTY	PURCHASE AMT	SOLD AMT	GAIN/LOSS	TYPE

FHZUN	2009-09-08-09-31-55	2009-09-08-09-42-54	40000	128000		144000		15455		FCX PUT
BPJUL	2009-09-09-09-52-23	2009-09-09-14-11-41	20000	177500		190000		12207		BIDU PUT
----------------------------------------------------
BPJUL	2009-09-10-10-13-22	2009-09-10-15-54-28	35000	217000		182250		-35245		BIDU PUT

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Quote from neke:

Weekly Update for week 35/50 ended 09/12/2009

Slow week, up 16K (4.4%). Not a lot happened in the holiday-shortened week as I was away from the system most of the time.

A nice collection of single hits (11 gains out of 13 trades) was marred by a set-back on BIDU on Thursday. For the most part was fading the excess moves in select stocks using put options, and that worked fine until I was dazed by BIDU on thursday, as the stock kept climbing higher and higher to the close, blasting through its 52-week high. The strength in the market is incredible; there wasn't even a meaningful pull-back to buy into.

Looking forward to next week.
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I think everyone was looking for a pullback. I know I was today, and I was actually short. But it was mostly a wash, and we'll just have to see what next week brings. Good trading.
 
Weekly Update for week 36/50 ended 09/19/2009

Frenetic but ugly week, down 16K (4.3%). Lots of big moves, tried to end week positive, but it was not to be.

The big losers were puts on FSLR on Monday, going in with the early weakness in the stock. Came again two days later when I thought it was due for another leg down. Missed it completely. Fortunately made up for these gaffers with calls on AMZN, AAPL and SPY, until friday. Got way ahead of myself on what was supposed to be a 50 contract trade on GOOG call. Ended up with 300 contracts on expiration day, and had -55K to show for it.

Will be looking at why I failed to implement my sizing strategy over the week-end.

Code: 
Opening Balance:               	    	380,861
Net loss for the week 		        -16,468
------------------------------------------------
Net Balance:                   		364,393

Number of Trades	            	 25
Number of Profitable Trades    	    	 16


Since Inception of Thread   01/10/2009 - 09/19/2009

Opening Balance:                   	320,064
Net gain (Less Margin Interest)		 44,329	(Up 14%)
------------------------------------------------
Net Balance				364,393

Number of Trades	           	947
Number of Profitable Trades        	592


TICKER	ENTRY DATE/TIME		EXIT DATE/TIME		QTY	PURCHASE AMT	SOLD AMT	GAIN/LOSS	TYPE

QZNIQ	2009-09-16-12-36-45	2009-09-16-15-36-59	23000	91600		120750		28827		AMZN CALL
APVIO	2009-09-16-11-55-54	2009-09-16-15-35-38	30000	199796		218890		18663		AAPL CALL
SWGIX	2009-09-14-09-55-42	2009-09-14-10-43-57	40000	98980		114000		14469		SPY CALL
--------------------------------------------------------------------------------
QHBUG	2009-09-14-10-49-40	2009-09-14-14-50-25	30000	155460		135000		-20874		FSLR PUT
QHBUI	2009-09-16-09-30-28	2009-09-16-13-37-48	40000	121000		86000		-35564		FSLR PUT
GOPIK	2009-09-18-09-30-19	2009-09-18-12-56-42	30000	180970		126000		-55398		GOOG CALL

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Quote from neke:

Weekly Update for week 36/50 ended 09/19/2009

Frenetic but ugly week, down 16K (4.3%). Lots of big moves, tried to end week positive, but it was not to be.

The big losers were puts on FSLR on Monday, going in with the early weakness in the stock. Came again two days later when I thought it was due for another leg down. Missed it completely. Fortunately made up for these gaffers with calls on AMZN, AAPL and SPY, until friday. Got way ahead of myself on what was supposed to be a 50 contract trade on GOOG call. Ended up with 300 contracts on expiration day, and had -55K to show for it.

Will be looking at why I failed to implement my sizing strategy over the week-end.

Code: 
Opening Balance:               	    	380,861
Net loss for the week 		        -16,468
------------------------------------------------
Net Balance:                   		364,393

Number of Trades	            	 25
Number of Profitable Trades    	    	 16


Since Inception of Thread   01/10/2009 - 09/19/2009

Opening Balance:                   	320,064
Net gain (Less Margin Interest)		 44,329	(Up 14%)
------------------------------------------------
Net Balance				364,393

Number of Trades	           	947
Number of Profitable Trades        	592


TICKER	ENTRY DATE/TIME		EXIT DATE/TIME		QTY	PURCHASE AMT	SOLD AMT	GAIN/LOSS	TYPE

QZNIQ	2009-09-16-12-36-45	2009-09-16-15-36-59	23000	91600		120750		28827		AMZN CALL
APVIO	2009-09-16-11-55-54	2009-09-16-15-35-38	30000	199796		218890		18663		AAPL CALL
SWGIX	2009-09-14-09-55-42	2009-09-14-10-43-57	40000	98980		114000		14469		SPY CALL
--------------------------------------------------------------------------------
QHBUG	2009-09-14-10-49-40	2009-09-14-14-50-25	30000	155460		135000		-20874		FSLR PUT
QHBUI	2009-09-16-09-30-28	2009-09-16-13-37-48	40000	121000		86000		-35564		FSLR PUT
GOPIK	2009-09-18-09-30-19	2009-09-18-12-56-42	30000	180970		126000		-55398		GOOG CALL

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God damn....that last GOOG call was a $55k loss in 3 and a half hours....I'm at a loss for words. I agree with your direction, but I think you pushed way too hard. Obviously it would have went lower, but if the position size wasn't so large, you probably could have made that a profitable week.

So you bought at 9:30:19 today at a goog price of 495.5145 is the tick I have for that, and sold at 12:56:42 and I have a price of 494.1012. You lost $1.4133 on a $495.5145, or about 0.28522% loss, but on your account, you lost $55,398 from what I presume was about $436,259 or a percentage loss of 12.69842%.

So your leverage was exactly .1269842/.0028522=44.5214922.

Neke, this is an insane amount of leverage. I don't even think I've ever heard a professional surviving for long at that level. I would say you need to back off a bit. You've talked about trying to hit singles with the occasional home run, but you should think about starting every trade as a single, then you wouldn't run into the leverage issue.
 
Quote from neke:

Got way ahead of myself on what was supposed to be a 50 contract trade on GOOG call. Ended up with 300 contracts on expiration day, and had -55K to show for it.
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Front month options on expiration Friday should be sold, not bought, because the decay becomes exponential.
 
Quote from NoDoji:

Front month options on expiration Friday should be sold, not bought, because the decay becomes exponential.
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It should have been apparent from the delta, too, but he was also wrong about the direction the underlying took.
 
No. There is not much time value left on expiration day. It is a pure directional play with huge leverage. You will never make big wins or losses that fast like neke.

Quote from NoDoji:

Front month options on expiration Friday should be sold, not bought, because the decay becomes exponential.
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Quote from novel20:

No. There is not much time value left on expiration day. It is a pure directional play with huge leverage. You will never make big wins or losses that fast like neke.
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Understood. It's a Hail Mary play, and one where averaging into a loser is a kind donation to fellow market participants.
 
Quote from bwolinsky:

God damn....that last GOOG call was a $55k loss in 3 and a half hours....I'm at a loss for words. I agree with your direction, but I think you pushed way too hard. Obviously it would have went lower, but if the position size wasn't so large, you probably could have made that a profitable week.

So you bought at 9:30:19 today at a goog price of 495.5145 is the tick I have for that, and sold at 12:56:42 and I have a price of 494.1012. You lost $1.4133 on a $495.5145, or about 0.28522% loss, but on your account, you lost $55,398 from what I presume was about $436,259 or a percentage loss of 12.69842%.

So your leverage was exactly .1269842/.0028522=44.5214922.

Neke, this is an insane amount of leverage. I don't even think I've ever heard a professional surviving for long at that level. I would say you need to back off a bit. You've talked about trying to hit singles with the occasional home run, but you should think about starting every trade as a single, then you wouldn't run into the leverage issue.
More...

That trade started as a 50 contract trade. Had I adhered to my policy, I should not have averaged in for a total of more than 100 contracts. Work still to be done on compliance with rules.
 
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