7/30 – a bit of a mess

Sweating a bit today.


Well being Mr. Mom for a week is putting much on my plate. The market was rough on my positions earlier. My entire thesis from late last week came apart today.
I got my daughter to Piano class on time, but spaced Tae Kwon Do for both kids, as I was caught in the middle of adjustments. The acct was printing down about 7% and I was a little occupied.

Now I am off to story hr at the library, and I need it. I am going to bury my head in the sand for awhile, as I am no mental state to trade well. My acct is now printing only slightly down now, not enough to get worried.
Here is breakfast at my home this week

My thoughts were, US Govt was printing money to get us out of this mess. That should devalue the dollar. But, many other countries are feeling the pinch too. i.e. UK, most countries in Europe. So, the dollar should strengthen, but Gold may be a safe haven. And as the dollar strengthens it may pull down commodities.
So my plays were:
Long Gold – GLD
Short Euro – XDE
Neutral to short Ags – POT
Well today Gold dropped hard, Dollar Strengthened, POT broke out yesterday.
My moves today were to bail out of gold after it failed the first 5 minute bar. Riding the strength in the dollar, and having POT run against me. Even though I scaled into these positions, I am dead wrong on the results of the dollar. Fortunately, my positions were very small as I did not have time to put on a second round of orders.
I have not been able to find any micro calendars this week, and that is somewhat discouraging.
Trades I made yesterday and today:
FNM – exited 2 units of my 9p calendars for .15. Nice profit.
INTC – entered 1 unit of Sept/Oct 27.5p for .25. Looking for a second level, but nothing yet.
At the end of the day, I feel very fortunate to only be down .2%. This is the first day in 3 weeks I didn’t finish up or down more than 1%. The market was up strongly.
SPX + 21
DOW 208
Oil $4.73
USB- the underlying has been running away from my Dec/Jan 25c and 27.5c calendars. NOw @ 31.06. However, the Aug/Sept spreads are .50 and .60 respectively. I am just trying to get .15 or so. I actually still feel really good about this trade.
I feel violated today, although the acct held it’s own. I am not really finding any sweet trades at this time. And trading directions has not been working for me.
My current position greeks are (SPX weighted):
Delta -23 (definitely leaning short)
Gamma -.6 (lots of calendars, butterflies, and double calendars)
Theta +135 (Not much, but starting next week I am on the road/vacation for 10 days)
Vega +640 (with VIX @ 21.21) I am good with this

3 thoughts on “7/30 – a bit of a mess”

  1. hi jonathan, i notice that you (almost) never mention straddles. can you comment on why you seem not to like them? thx

  2. Tim, thanks for the sympathy. Fortunately my acct was down very very little, even with each leg running away.
    Rol,
    thanks for the message. I tend to prefer strategies that are Theta positive. I will occasionally put on a strangle underneath a calendar, this protects me from a blowout move in the underlying.
    Or I will leg into a position, from a long call, then when the stock moves my direction, I buy a put to bring it back to Delta Neutral.
    I actually like the idea of the straddle, and I am pretty good on making delta adjustments to lock in profits. However, I just can’t get around giving up so much time decay. In short, I like having the positive Theta edge in my trading.
    Another feature of straddles I find a bit tricky is this: Unless it is an earnings trade, I prefer to do a straddle 3 months out, in a lower volatility situation. When I go any farther than that gamma moves to slow and the underlying needs to make a big move for me to profit. Within 45 days, gamma works well, but then I am fighting theta decay. And if I get a volatility rush, I start to peel off the position and take advantage of rush. I don’t want to give away the profit from a vol rush.
    All that said, I love the idea of the straddle, but I haven’t been looking for candidates lately.
    thanks for posting, I enjoy hearing from you.
    jon

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