WebTrader's 2014 Journal

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WebTrader

It has been a while since I traded full time, and after a very long break from the stock market (of 5+ years), I placed my first trade on 2/26/2014. I am quite rusty, so I though that posting screen shots of all my trades and portfolio holdings will help my discipline and learning (the day I stop learning is the day I die). While my main experience is in trading stocks and ES futures, I am going to incorporate option trading strategies this year. I am far from an expert in options and I am not going to pretend I have a full understanding of the Greeks, butterflies and iron condors, lol. However, more often than not I can predict price movements with great accuracy. Hopefully, I will choose the "right" option strategy.

I have an account with IB that had about 135K when I started on 2/26/2014.

My current open positions are:

Long 10,000 FNMA
Long 15 PLUG March 21/2014 Bull Call Spread $6/$8

I treat the FNMA position as a call option without expiration and no strike price. I plan on holding on to it for as long as I can. I believe this can be a 10-15 bagger. I see the probability of at least a double greater than 70%. I see the probability of a 5 bagger at 42%. I see the probability of a 10 bagger at 27%. I see the probability of a 15 bagger at 14%.

I am a very busy man that runs a businesses, and I also volunteer approximately 250 hours per year (six hours per week). Therefore, I will not be able to trade full time or answer all the questions in a timely manner. I apologize in advance.

I have three goals for 2014

1. Trade wisely
2. Average 5% per month return
3. Always follow number 1!

Rules:

Max option position should not be more 3.5% of account value for spreads, and 1.25% of account value for calls or puts.

Excluding ETF and FNMA, stock positions shall not exceed 13.5% of account value.

As I mentioned before, I will post all my winners, losers and holdings, so you can hopefully learn from all my mistakes. When possible, I will try to explain why I entered and why I closed, but generally, you should be able to pull a chart and see why.......
 
What a day for PLUG!!! When I put on the $6/$8 bull call spread last Wed, PLUG was trading in a range of $6.35 and $6.60, and I thought it had a 38% chance of trading above $8 by expiration. Friday it went to $8.30+ and today it was as high as 11.41 before closing at 10.33 (last trade I show on IB). So much for getting there in 3 weeks. How about go over the 3 week aggressive price target by 42% in just three days??? Well, there is still 9 trading days left to expiration, so who knows where this one will end at. Since it is more than $2.30 (28.75%) above my maximum profit point ($8.00), I am just going to sit tight. If it comes back below 8, so be it. I don't think that selling a $2.00 valued spread that needs the stock to go down 28.75% before it loses money for $1.45 is wise.

FNMA had a great day as well closing at $5.82. I don't plan on closing this one at current levels, but it is a nice feeling to see the paper profits soar.

I took two new bull spread positions that expire this Friday:

3 SPWR 33/34.5
1 SCTY 75/81

So open positions are:

10,000 FNMA
15 PLUG 6/8 (Mar 21)
3 SPWR 33/34.5 (Mar 14)
1 SCTY 75/81 (Mat 14)

You can see the trades and portfolio in the attached screen shots
 
1) If it were my money, I wouldn't buy FNMA in the first place, too much risk (especailly, on debt). I'd take the money and run, and buy 1x XTF. you might have more tolerance for risk than me. there's a good chance FNMA might drop back to 3.5
 
HeSaidSheSaid said:
1) If it were my money, I wouldn't buy FNMA in the first place, too much risk (especailly, on debt). I'd take the money and run, and buy 1x XTF. you might have more tolerance for risk than me. there's a good chance FNMA might drop back to 3.5
More...

Thanks, I really appreciate your honest feedback. I don't know what XTF is. I did not get a result on Yahoo Finance. Can you please explain? Thanks again!
 
When was the last time you held two stocks, in two different sectors, (one priced over $6, and the other priced over $11.00) that were up more than 10% intraday, and went down as much as 50% and 48.8% from the high of the day or 46.2% and 44.2% from yesterday's close.

Well, I was fortunate enough to be in two of them!

First FNMA - It hit a high at 6.35, and I did not like the way it was trading. I started to get nervous about the action as I saw a lot of volume and not enough up movement. I decided to exit the position to be on the safe side as I felt a sharp selloff was imminent. I got a partiat fill on selling 10K shares getting only 5900 done at 6.07. At that point the stock headed towards 6.00. I was watching closely and the stock bounced to 6.09, but my order was not filled. OTCBB stocks, do not trust them. Stock then turned and I kept hitting limit 2 ticks below ask and no fill until I got out at 5.94. I closed the trade for $13,520 profit.


The stock then tanked to 3.25.

HeSaidSheSaid said:
there's a good chance FNMA might drop back to 3.5
More...

Excellent Call HSSS! Your Feedback was very valuable indeed. Thank you!

Next up PLUG - This one is apparently a real piece of doodoo according to some research firm.

WebTrader said:
I don't think that selling a $2.00 valued spread that needs the stock to go down 28.75% before it loses money for $1.45 is wise.
More...

lol, well, the stock went down 45% the very next day. Unfortunately, the quote spread (dif between bid and ask) was 35 cents, and I could not get a fill in the middle. Tried getting out at 1.25 when bid was 1.10 and ask was 1.45 and stock trading at 8.60. I finally got out at 0.85 when the stock was trading at 7.80. I ended up with $175 profit. I guess it is better than a loss.

SPY Calls - As I was trying to close the 15 contracts of PLUG spread and watching FNMA tanking like crazy, I made a mistake that I did not realize until later on. I though the market was bouncing, so I entered an order to buy the SPY 188 calls for 0.84. I normally do these kind of trades with $200-$300 on the line. However my position size was set to 15 contracts, and I completely missed it. It should have been at 3 contracts. I am still in this position and will re-evaluate it tomorrow. Feel free to give me hell for this one. I deserve it. I was too focused on FNMA and PLUG that I never really monitored SPY at all.

Closed the SPWR spread (3 contracts as it should be for weekly options) for $86 loss.

Still open and underwater the 1 spread contract 75/81 ($210 original debit) on SCTY.

All trade confirmations and account balance attached to post.

As I originally said, hopefully you will all learn from my mistakes.

I escaped today. It could have been much much worse. Tomorrow will be better :)
 
Really busy week at work, no time to post. I did a quick capture of account values for the week and will post in the following posts.

3/10/2014
 
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