Another crushing day for the bulls. Hard core slaughter. Indexes started down on the morning and continued. I am out of a number of trades. Fortunately, I am up on the day. Not too long ago I was bearish, I turned a little neutral to bullish and since then the SPX has lost nearly 50pts. I am glad I don’t trade in size based on emotion. I believe that may have saved me here . My MO has been to enter “emotional trades” on very very small size if at all. I am about even on all of those. My gainers have been looking for pricing discrepancies. I have been just ok on direction. i.e. IACI, HPQ, SPF.
It looks like short term support will be found at its previous low. 150.70. Awesome moves.
I also just finished, A Demon of our own Design by Richard Bookstaber. While it may not make me a better trader after putting down the book, I did find it to be quite interesting. I also like his conclusion,
“Simpler financial instruments and less leverage make up a painfully obvious prescription for fixing the design of our markets.” “,simpler financial instruments and less leverage will create a market that is more robust and survivable.”
Maybe in finding some simple approaches, and refining them through time I can continue to grow my account in this market. I know many “traders” who go to the FX market for their excitement. That is not my cup of tea anymore. It is exciting, and dare I say fun. Aggressively trading Treasury and FX futures for 3 years held excitement, profits/losses, and some sleepless nights. No more of that for me.
I have found that we get what we want out of the market (Law of Attraction). If the trader/investor wants excitement, that is what he/she will find. Anguish, that is there too. I want a living, steady net profit, mental growth and exercise. I like to keep it pretty basic. I like to understand the fundamentals of stock movement and option dynamics, while countering human emotion in the market. That is what I have been getting. No thrills needed. I am developing my style. I’m going on a bike ride now. I’ll let the TOS monkey monitor my desk.
Here are the moves of my day.
CREE – I am down to 2 units of the 30c. I sold the remaining 25p Calendars for .30, 30c calendars for as high as .34. What a nice trade.
HPQ – I don’t like being forced out of this one (47.87), but I will take the $1.50 gain gladly.
IACI – plunged again. The 32.5-30p spread has double in value. I don’t see any real support until it gets to 29.70. This trade goes theta positive @ 31.30.
AMT – It is down on the day. I didn’t have a chance to exit before it was near the uptrend line. I took off my 45-50c spread at a .03 loss. The 42.5-47.5c spread is off about .50. Below the underlying price of 43.20 and I am out.
BTU – looks pretty bad. Fortunately, I made initial money on my vertical put spread. But my butterfly with adjustments is not working out.
SPF – is taking an absolute beating. It is down 30% since I bought the stock. I have been hedging this with put options. The kept the loss to about 11%. But damn. I don’t like to watch that go do down so much. Currently it is being hedged with Aug 17.5p options. The underlying is 15.80.
Rack – 12.5p sept/aug calendar is performing well.
DTV – There is potential to work the play I put together over the weekend
I was significantly delta positive going into this day, yet my acct is slightly up. I feel very fortunate. The Volatility skewed sideways portfolio handled today well. The bears are certainly smiling today.
My current plays include:
BULLISH
CLF butterfly
AMT – Bull call spread
DTV – Calendar
SPF – Dynamic Hedge
BUD – Calendar
BTU – former butterfly
Sideways plays –
DTV – Calendar
MFE – Calendarr
CREE – Calendar
WWY – Calendar
RACK – Calendar
Bearish –
IACI – bear put
WWY – Calendar
ABI – Calendarrr