The Dow dropped like it hasn't done so in a while on poor jobs results. The question is, is this an awakening, return to the major down trend? Or will we continue to go sideways from here? I think the overall sentiment will manage to keep the Dow in check and the prices will stabilize once more, but this is just a gut feeling. I've learned not to trust those and do what the chart tells me.
So, I do have bearish trades on (entered yesterday as part of my 100k Experiment). But I also have a bunch of sideways to bullish trades too. I'll see how these go today but I won't be panicking because the Dow is close to a previous support level now.
In any case, expect our market to drop today across the board.
Friday, July 3, 2009
Thursday, July 2, 2009
The 100k Experiment
My regular readers know how desperate I am for some more cash in my trading bank. There is no doubt in my mind that I can make thousands of dollars month after month consistently if only I had more money to play with. I've asked many times for someone to give me 100k to trade with, so far nothing. Understandable, I don't have a proven track record yet (although since December last year I only had one losing month, the loss being 1k). So, I'm starting this experiment to prove to myself and to others that I can do it.
I'll give myself the 100k, virtual cash. All of my next paper trades are going to be as if this was real money. I'll track my equity, how much cash is in the market etc. I'll include virtual brokerage, slippage etc. Let's see how long it is going to take me to double the 100k. Here are the rules:
WPL (03/06): RSI & stochastics high and pointing down. bearish day, bounce off resistance.
(calculated by subtracting capital at risk and brokerage from the initial amount)
I'll give myself the 100k, virtual cash. All of my next paper trades are going to be as if this was real money. I'll track my equity, how much cash is in the market etc. I'll include virtual brokerage, slippage etc. Let's see how long it is going to take me to double the 100k. Here are the rules:
- I'll never risk more than 5% of my full equity on a single trade
- I'll use any strategy I know, even though I have my favorites
- For simplicity, brokerage will always be 120$ per leg.
This is high enough to reflect some average real value
WPL (03/06): RSI & stochastics high and pointing down. bearish day, bounce off resistance.
- bear call spread July, strikes 44.50 - 44.00
- credit .13 * 13 contracts = 1690$
- capital at risk: 4810$
- targets (expiry / 44.40)
- bear call spread July, strikes 4.25 - 4.00
- credit .08 * 28 contracts = 2240$
- capital at risk: 4760$
- targets (expiry / 4.25)
(calculated by subtracting capital at risk and brokerage from the initial amount)
Wednesday, July 1, 2009
Trades, June 2009
Wow, what a month, not a single losing trade! I made about 1700$ real cash with my two (and a half) CSL trades. That's after commissions and off about 6k of a trading bank. The rest of the trades were on paper, and successful too. I'm very happy with this result and I'd like that to continue next month.
WES (01/06 - 03/06): RSI & stochastics low and sharp up. clear break out of a pennant.
WES (01/06 - 03/06): RSI & stochastics low and sharp up. clear break out of a pennant.
- protected synthetic long, all same strikes of 22.17
- bought put and bought call are june
- sold put is July (more credit)
- virtually no margin during June
- debit .43 * 5 contracts = 2150$
- targets (24 / 21.80 / June)
- closed .95 = +121% or 2600$ (if it were a live trade it would be +96% after brokerage). Closed out early because price was outside of bollinger bands. Doubled the money in one day. No further comments ;-).
- bull put spread June, strikes 28 - 29
- bought call June, strike 30
- credit .30 * 5 contracts = 1500$
- debit 1.08 * 1 contract = 1080$
- brokerage: 177$ + 83.64$
- capital at risk: 4580$ + brokerage
- targets (expiry (for bull put), 31.32, 32 / 28.50)
- closed bull put .06 = +1200$
- closed bought call 1.48 = +400$
- bloody brokerage = -520$
- profit = +23% or +1080$ (live)
- protected synthetic long, all July expiry
- bull put spread, strikes 2.25 - 2.50
- bought call, strike 2.50
- debit .06 * 20 contracts = 1200$
- max margin = 5000$
- targets (2.60 - 2.75 / 2.45)
- closed .21 = +48% or 3000$. Reached resistance once, I missed. Didn't miss it on the second time.
- bull put spread, strikes 30 - 30.50
- credit .13 * 10 contracts = 1300$
- brokerage: 188$ x 2
- capital at risk: 3700$ + brokerage
- targets (expiry / 30.30)
- closed .02 = +29% or 1100$, 724$ (live) after brokerage
- bought put June, strike 3.61
- debit .32 * 10 contracts = 3200$
- targets (3.20 / -20% / 4 days)
- closed .42 = +31%, perfect two day trade
- bear call spread June, strikes 9.75 - 9.50
- credit .07 * 20 contracts = 1400$
- capital at risk: 3600$
- targets (expiry / 9.60)
- bull put spread June, strikes 8.25 - 8.50 (16/06)
- credit .04 * 20 contracts = 800$
- => capital at risk: 3600 - 800 = 2800$
- targets (expiry / 9.50 <-> 8.50)
- expired .0 = +78%, great condor trade
- bought call July, strike 2.64
- debit .65 * 5 contracts = 3250$
- targets (3.40 / -20%)
- closed .78 = +20%, hit target, quick and painless.
- bought call July, strike 25
- debit 1.21 * 3 contracts = 3630$
- targets (26.50 / -20%)
- closed 1.51 = +25%, outside of bollingers, quick profit
Results
Hmm, our market lost it's gains from yesterday. I was fortunate enough to exit 2 of my straight call option trades, the spread trades are all still doing fine. I'm still left with straight calls on BLD and AGK. I stayed in both. Reason number one was that the Dow futures were up and I expect a rise tomorrow.
BLD decided to go sideways but it was relatively strong today, compared to the rest of the market. If the Dow helps what its futures promise BLD will go up tomorrow. I'll decide if I close out of the calls or maybe sell 4$ calls to turn it into a bull call spread and take that to expiry.
I made a mistake in my analysis for my entry in AGK. It was following its down trend and it hadn't broken out yet. My eagerness to do the trade got the best of me. Now AGK is trying to continue its downward trend, or will most probably stay at its support. I should have done a bull put spread. My options are now to get out completely and take the loss. Or, I could sell a call with a higher strike making it a bull call spread (if my view it's going to go sideways). Or, if it continues down I could sell a call with a lower strike and turn it into a bear call spread. I'll see how the numbers stack up tomorrow.
BLD decided to go sideways but it was relatively strong today, compared to the rest of the market. If the Dow helps what its futures promise BLD will go up tomorrow. I'll decide if I close out of the calls or maybe sell 4$ calls to turn it into a bull call spread and take that to expiry.
I made a mistake in my analysis for my entry in AGK. It was following its down trend and it hadn't broken out yet. My eagerness to do the trade got the best of me. Now AGK is trying to continue its downward trend, or will most probably stay at its support. I should have done a bull put spread. My options are now to get out completely and take the loss. Or, I could sell a call with a higher strike making it a bull call spread (if my view it's going to go sideways). Or, if it continues down I could sell a call with a lower strike and turn it into a bear call spread. I'll see how the numbers stack up tomorrow.
Tuesday, June 30, 2009
Closed Trades
As our market went up today I took the chance to close out of two of my bullish option trades. As I said, these were only meant for the very near short term. Here are the results.
TLS (26/06 - 30/06): RSI & stochastics very low and turning sharply. off support at 3.20, channeling.
TLS (26/06 - 30/06): RSI & stochastics very low and turning sharply. off support at 3.20, channeling.
- bought call July, strike 2.64
- debit .65 * 5 contracts = 3250$
- targets (3.40 / -20%)
- closed .78 = +20%, hit target, quick and painless.
- bought call July, strike 25
- debit 1.21 * 3 contracts = 3630$
- targets (26.50 / -20%)
- closed 1.51 = +25%, outside of bollingers, quick profit
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