Taking 76K to 500K by Year End
- Thread starter neke
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Options are not inherently dangerous. The danger is always using something you do not know anything about incorrectly. For those who think options are dangerous and stocks and bonds are not, just ask Enron shareholders and Long-term Capital Management (they lost billions on bond trades, among others).
At current option premiums, I would not play CFC at all. I know the premiums have come down substantially from what they were last week (when I lost 50% in two hours buying a put, even though the underlying stock price hadn't changed), but unless you have a strong conviction about the next direction of the stock, I would stay away.
At this time I only do options, not futures. For long calls/puts, you have the right but not the obligation to buy/sell at a given price. For that right you pay a premium. Futures are entirely different: it is both a right and an obligation to buy at a given price sometime in the future. In futures, you could lose more than the amount in your account! People are attracted there because of the huge leverage available. I am staying away from there at the moment.
Weekly Update for week 26 ended 08/24/2007
Glad to see the end of the week, and glad to know there is another week to look forward to. Two related but awful trades on Monday defined the result for the week. Shorted RIMM at 225 after the massive run-up, forgetting the market has just changed from bearish to bullish. Added to my pain by buying puts on the same stock. Closed the stock for a loss of 22K after watching unbelievingly as the stock kept climbing all day long, closed the option for a loss of 20K. My positions monitor could not detect the excess leverage, since it saw the trades as unrelated. Nothing I could do for the rest of the week could change the direction of the account.
Now I really need to be cautious. I know I have said that all along, but it is important to keep reminding myself of that. After 26 weeks, the weekly rate of return is 4.77% compounded. With 18 weeks remaining, and assuming no impact from further withdrawals, I need to make 4.27% weekly to attain the target. It is certainly tough, but I know with a lot of discipline, and a commitment to look well before leaping, it is attainable.
Glad to see the end of the week, and glad to know there is another week to look forward to. Two related but awful trades on Monday defined the result for the week. Shorted RIMM at 225 after the massive run-up, forgetting the market has just changed from bearish to bullish. Added to my pain by buying puts on the same stock. Closed the stock for a loss of 22K after watching unbelievingly as the stock kept climbing all day long, closed the option for a loss of 20K. My positions monitor could not detect the excess leverage, since it saw the trades as unrelated. Nothing I could do for the rest of the week could change the direction of the account.
Now I really need to be cautious. I know I have said that all along, but it is important to keep reminding myself of that. After 26 weeks, the weekly rate of return is 4.77% compounded. With 18 weeks remaining, and assuming no impact from further withdrawals, I need to make 4.27% weekly to attain the target. It is certainly tough, but I know with a lot of discipline, and a commitment to look well before leaping, it is attainable.
Code:
Balance B/F: 269,465
Loss for the week -53,093
------------------------------------------------
Balance C/F: 216,372
Number of Trades 39
Number of Profitable Trades 24
Since Inception of Thread 2/25/2007 - 08/25/2007
Balance B/F: 76,636
Net Gain (Less Margin Interest) 180,736
Cash Withdrawal -41,000
------------------------------------------------
Balance C/F: 216,372 (Adjusted balance before withdrawals is 257372, up 236% )
Number of Trades 679
Number of Profitable Trades 393
Expected Balance at this time to be on track for Year-End Target :
232,143
Status: Ahead of Target (Based on adjusted balance before withdrawals)
Top/Bottom Discretionary Trades for the week
TICKER ENTRY DATE/TIME EXIT DATE/TIME QTY PURCHASE AMT SOLD AMT GAINS/LOSS TYPE
BCSI 2007-08-22-12-36-23 2007-08-22-15-00-32 4000 289200 300858 11633 LONG
CFC 2007-08-23-10-24-52 2007-08-23-13-29-35 10000 221500 226850 5317 SHORT
------------------------------------------------------------
RFYUD 2007-08-20-10-05-55 2007-08-20-15-53-20 8000 76320 56800 -19671 OPTIONS (RIMM SEP 220 PUT -- before split)
RIMM 2007-08-20-08-10-28 2007-08-20-15-55-07 2000 471875 450316 -21606 SHORT
(Before Interest and Other charges)
TRANSACTIONS ANALYSIS FROM 2007-02-25 TO 2007-08-25
Current Week | Since Inception of Thread
|
Method Gains/Loss No Of Profitable | Gains/Loss No Of Profitable
Trades Trades | Trades Trades
Automated AutoTrade1 2531 8 6 | 7535 169 95
AutoTrade2 -10767 3 1 | 2119 10 7
AutoTrade3 0 0 0 | -4523 3 0
----------- -------- ------------ | ----------- ------ ------------
Total Automated -8236 11 7 | 5132 182 102
----------- -------- ------------ | ----------- ------ ------------
Discretionary Long 10119 10 8 | -21432 177 105
Short -28578 12 7 | -4355 171 101
Options(long) -26399 6 2 | 202463 149 85
----------- -------- ------------ | ----------- ------ ------------
Total Discretionary -44857 28 17 | 176677 497 291
=========== ======== ============ | =========== ====== ============
Net Totals -53093 39 24 | 181809 679 393
=========== ======== ============ | =========== ====== ============
neke,
While that is true by definition, keep in mind that most, if not all, brokers have safeguards in place to liquidate positions before your account balance reaches a negative equity and they have to send Vito over to collect.
Most in fact have a shut off valve if you lose so much % in a day. It forces you to call and ask for permission to trade more. Yes, this has happened once to me and it's a wake up call to say the least. Most traders are not aware of this behind-the-scenes safeguard until they realize they cannot place a trade. As for what the magical number is, I am not sure. I would guess it varies broker to broker and by account size and experience as well.
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