Weekly Pin Butterfly Strategy

caroy said:
I agree. I had one almost perfectly pin yesterday. Bot 1:2:1 4380-4395-4410 put fly @ $3.70 around 2:15 pm. Went off the board at 4395.65 about as good as it gets for 45 minutes worth of work. Cash settle this morning at $1436 or a 388% return. If only I had the balls to size up. Thinking about on winning M,W,F taking half the profits and playing these flies in the last ten minutes. But damn that $5 exercise fee. I've only traded a one lot on this fly is it $5 per option for the settlement or just $5 overall regardless of size?
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When I traded it, it was a flat fee no matter how many contracts you had and I was trading 8 or 16 contracts depending on the width of spread. I had good profits in 2016 and 2017 but I started taking a lot of max losses early in 2018 so I paused and never got back to it.
 
Week 35 - Closing Results

APPL 15 146 calls bot @ $1.16 sold @ $0.54 -$930
ABNB 5 175-180-185 Iron Flies sold @ $2.00 sold @ $1.76 -$120
AFRM 10 125 puts bot @ $2.10 sold @ $1.00 -$1100
BA 5 215-220-225 Iron Flies sold @ $2.34 bot @ $2.00 +$170
BYND 10 112 calls bot @ $1.72 sold @ $1.50 -$220
DASH 4:8:4 200-210-220 puts bot @ $3.45 sold @ $0.40 -$1220
DDOG 10 147 calls bot @ $2.00 sold @ $0.13 -$1870
GME 6:12:6 190-200-210 calls bot @ $3.11 sold @ $0.76 -$1401
NET 10 137 puts bot @ $1.70 sold @ $6.25 +$4,450
TWTR 20 67 puts bot @ $0.78 sold @ $0.86 +$160

P/L Commissions: Net P/L
-$821 -$126 -$947

Thoughts:

  • So so week. Big winner on NET but the rest were pretty much a flop. Made some lost some trading intraday.
  • Have made a decision to take a break from actively trading this strategy. Starting next week will be putting the 250 k into a buy / hold portfolio I will look to hold for the next few years. Yawner for sure but it isn't growing by sitting in cash. Will convert this account to that format beginning next week.
  • Will research and do some paper trading next few months with some other ideas to incorporate into the new trading plan for 2022.
  • Will put 50 k into a different account but will take a few months off from active trading for a while and look to reenter more active trading come the new year.
  • My rationale to step away is I need to focus on my day job the next few months. We've hired six new employees I lead and I need to give more time to the job that pays the bills and the trading while very mentally stimulating is not something I can give the time to right now on the scale the large account requires.
  • Travel for work has also resumed and in fairness to the work I need to do I can't carve out the time needed to trade on Thursdays and Fridays for this strategy with this size at the moment.
  • I will still post weekly but for a fly account I trade for a friend on a much smaller scale for those that follow the strategy.
  • And to be honest the returns are not where I want. I can rationalize it that I haven't really been trading more than 5 to 7 percent of it each week but the rest is just sitting there not doing much. But it is what it is. And I don't think putting all my eggs into the pinning expy plays each week is prudent as they can swing quite violently. I feel kind of like a pussy with this risk allocation but it is clear you have to use risk to get a larger reward.
  • I think there is merit to the pinning strategy but I think it is best part or one tool of others as well. I think it is especially paired towards expiration day / week strategies. I hope to continue to demonstrate that in future posts on the smaller account.
  • As the big account will now have a slew of buy and hold equities I will have to think about how to post results with that. I like the net liq screen shot but I can do that again in January with the 50 k account.
  • Thanks to all those who have commented and contributed along the way it is much appreciated.
  • Will keep the smaller account weekly pinning fly trades on here for the foreseeable future. Maybe launch a different journal in January for the 50k account.
  • The current job provides a good salary and most importantly covers tuition for my sons for free and is pretty enjoyable work in general.
  • I'd like to contemplate trying to trade for a living in two years when they graduate. I'm 43 now. In a good place with no debt and some side passive income in rentals and some farmland so the pressure isn't what it was in younger days. I live pretty modestly and spend a bit on some travel but I like experiences over things in general. Although those posts on luxury watches make me wonder.
  • My father traded for large grain houses for a living with mostly OPM and I spent time in the pits with a market making group and understand that type of option trading but those jobs are pretty much replaced by computers now.
  • Trading for a living intrigues me for the freedom it allows and I have a great deal of respect for those who do it. I'd like to be able to do good things with the profits as well. Invest in some employee owned businesses some charitable giving. I worry with the absence of pits that trading for a living can be rather isolating. I guess ET and other formats help break that up and provide some interaction with other humans. Perhaps a small fund to manage but I get way ahead of myself. I need to get consistently profitable on my own right first before I'd be interested in that. But I do find it that in my friends account I don't mind risking more money. It's a very small account and perhaps knowing it is inconsequential for his life makes it easier. But I do feel an obligation to make a best effort for him. Maybe it's easier when you are trading other people's money than your own. I have to ponder that.
  • Will keep posting and reading the good thoughts of others. Just the format here will be changed up a bit.
 
traider said:
I thought your strategy is set and forget so it doesn't need that much time. Do you have to delta hedge or make adjustments?
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It's managing the exits that takes up the time on Fridays that is what is eating up the most time. With ten positions on I've been ending up screen sitting too much and with travel expectations now restored for the day job it's becoming more difficult to carve out the time while honoring my commitments to my colleagues and employer.
 
An update ----
Have been traveling for work. As planned put the 250 k into a basket of stocks. See symbols below.

AAL 400 shares
AAPL 50 shares
AI 100 shares
AMZN 6 shares
BEP 100 shares
BG 50 shares
BitCoain $5,000 purchased @ 45,000
CAT 35 shares
DIDI 200 shares
F 300 shares
FSLR 50 shares
GOOG 1 share
JNJ 25 shares
JPM 50 shares
KMB 25 shares
KO 100 shares
NIO 100 shares
NSC 20 shares
OC 50 shares
PG 25 shares
QQQ 20 shares
QS 400 shares
RIO 100 shares
RLI 50 shares
SHLS 100 shares
SPY 100 shares
UBER 100 shares
VXRT 200 shares
WAB 25 shares
WBA 100 shares
WEN 100 shares
YETI 50 shares
YUM 25 shares

So far so good bot mostly early September on the dip added to positions over two weeks. Have sporadically sold flies against some of these while using jumps in vol or earnings moves to put them on. Example long 100 shares so short 2 OTM calls buy 1 OTM call further out. Put a btc order in at half the premium collected. I've sold some weekly covered calls against some.

Big winners have been Bitcoin, TSLA bot in the low 800s, BG, FSLR, and today QS made a run but a 14 day fly off against it.

Up about 4.2% for the close of the month. Theory is to hold these throughout November and December. I've traded some directional flies based on highest OI or retracement with more success than loss. Keeping these at only one or two a week. Some intraday plays with SPY flies on M,W,F expiration.

Selections on the stocks were based on some analysis of potential for growth. Bent towards electrification with LIT, QS, TSLA, NIO, FSLR, etc. Some blue chips for dividends.
 
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