Trajan's options journal

Ok..so now that we have a few individuals on this thread of intellectual value let me give us all a quick reminder, as this year has nearly duplicated the trend of last year. (Market tanks in early fall.....market rallies huge in late Oct/Nov & stalls late Dec etc.)

As far as I am concerned we did have a January effect. If you looked at, in particular tech stocks---take a CSCO, JNPR, SEBL, even AMZN whatever....the levels of these stocks increased dramatically from where they were in the last week of Dec 2002 to the 2nd week of January 2003. Believe me, I know as I watched JNPR, SEBL, QLGC & a whole bunch of other calls go up 4-6 X. It was brutal to miss this move as I had put on butterfly spreads (duh) It was an extension of the great bounce we had in November.

OK, here is my point....the same damn thing happened last January 2002. I remember buying JDSU & EMC last year and making sick gains in a couple of weeks on these dogs. My point is, especially now with the middle east, do you think we will get a let down here and pull back going into March just like last year.

The Nasdaq, I believe, held on for its life last year until late February and than started to pullback until it reached yet another leg down and a new low in 2002.

Any of you gurus think that the Nasdaq will either retest that level or even put in a new bottom???

Also bring up a 6 month chart on CSCO. This level is critical. In hindsight we will either say this point was a double bottom on its resumed move back to $15.00 or we could be in for a breakdown and retest of that pesky $10 mark..............................
 
Well I sure don't have the answers to your questions, but I do have some thoughts.
I do think we will go lower in the near term. How low I can't predict. I also think the market is already oversold but will get more so. Finally, I think it's a big game of Texas Hold'em at this point. By that I mean as soon as the war starts I'm 100% in the market looking for a 20% pop from there.

I'm looking to stock my long term positions at that juncture. Will sell puts on issues I want to own, front month, and maybe buy a couple leap calls if they really get beaten down.
 
It is hugely critical point in CSCO which is why I'm long. I prefer to play these things straight as opposed to bitching for a week that it hasn't broken through, been there, done that. In my view, it will break down below this point eventually. The risk/reward for the position is one within my paramaters. It is at support, if it breaks, I'll sell or get flat. You could say, my position is hedge by puts in IBM, which is at an exact same juncture. If both are down three percent tommorrow, I would probably break even on the day.

For a longer view, I'm bearish to flat. This means most positions I trade will at worst beak even or profit significantly in down draft. But like the last two days, when my deltas were opposite of csco's direction, it is possible to limit any loss by proper position management and trading. In other words, stop the pain without causing more damage by doing something stupid. Can I say in the past I've always done this? No, but that's the point of the journal, to keep myself honest(and to help others).

While I hold a bearish view, the market may not bend to my wishes. It certainly didn't in the late nineties when my view was that every uptick was a selling opportunity. I don't want to fight the same contrarian battles which left me on the losing end. My capital didn't then nor now allow me to have such a strong conviction. So while it's O.K. to have a bearish view and use fundamentals, I trade using a set of skills acquired from experience and other talented people.

So, in other words, I won't get too fixated on a position. I had a swing trade on the IBM Dec puts which just killed me. How could they send that POS stock up to the high eighties? I didn't sell the puts even though the stock was obviously going up. The same thing happened at the end of December, I bought some puts as the stock broke below support. Once again it rallied to the high eighties, only this time I sold the puts and got long for the ride up, made some money before the Jan expiration. Once again as this is posted, I'm long puts in IBM for the third time in three months. Will somebody please shoot this pig!!!
 
I'm trying to close down the position. Big pop in the S&P caused everything to go out of whack. The journal will probably be quiet as I transfer over to IB. Which reminds me why I got out of being a computer science major in college, I can't install the latest java. It gets stuck during the process and now won't even uninstall what it has put on my harddrive
 
Everything closed down. I didn't want the process to get fucked up and have me lose money because I couldn't trade. For five days of trading the account value is 29,901. So I made a couple of bucks this week, total of $901. Also, I'm getting a second monitor between now and when the new account becomes available.
 
Trajan look into the way your new broker figures margin. Some brokers will take out your options value when figuring out your eqwuity. Eg. Acct is at 26K and you buy 5 straddles for 4K you are now below 25K which means you can't trade in/out. Other brokers who may be goverend by a difference SRO will figure total equity not total cash. Watch out!
 
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