Archive for March, 2010

Still in trouble

No Comment // Written on Mar 17, 2010 // Options Trading

The SPY moved up another .36 points today, which isn’t horrible, but I’ve passed the peak of the profit potential at the expiration line. I tried to move up my calls today, but I didn’t have enough option buying power! I couldn’t even move up my puts either. I definitely need to spend less than 50% of my account on my opening trades next time.

I’m pessimistic, but not crushed. The VIX is at a low, and hopefully it will spike up. But I’m not counting on it. If I lose over the next couple days, it probably will only be a few hundred bucks. I’ll close out my total position if the price continues to climb. But if it falls… that would be great. I may not profit at all this month. But I’ve learned my lesson again: don’t try to predict price!

Goodbye FIDM

No Comment // Written on Mar 16, 2010 // Meditations

I helped critique Mrs. Krell’s Residential Thesis class again today, and it was nice to be there.

Almost exactly a year earlier, I walked off campus as a student for the last time. As I walked across the campus park towards the elevators today under the early afternoon sun, I was compelled to take a moment to remember where I’ve been, and how I’ve come full circle, 3 years later. I start my new job TOMORROW.

I saw two pigeons land on the ground 30 feet away, and I remembered how I used to enjoy watching them from the bench on my breaks, away from the hustle and bustle of drafting homework in Los Angeles. I felt at home in those moments, feeding them what I could and watching them walk clumsily in affectionate circles. I remembered the perspective drawing that I rendered of the FIDM building for my first class there, Sketching Techniques. And how my instructor got a kick out of the two silhouetted pigeons in the foreground.

And then in that moment, the two pigeons walked towards me, from 30 feet away. They came right up to me, and though I didn’t have any food to offer, they said hello for a minute, and I enjoyed their presence.

SPY is moving against me.

No Comment // Written on Mar 16, 2010 // Options Trading

Looks like I need to stop trying to predict price, because it hasn’t worked. I was wrong in predicting a bearish move, at least in the short term. The SPY blasted right through the resistance line I drew and instead followed the upward channel. It’s moving painfully upward while the bears are showing a lot of resistance, but it’s still climbing upward along the lower end of the channel.

I’m not in a horrible position, but I will likely need to make an adjustment tomorrow morning. But that’s okay, I’m still 30 days out from expiration. I decided this morning that I would make an adjustment if the price reached 117.

Delta is currently at -236, Vega is -92.

New position for March 2010

No Comment // Written on Mar 16, 2010 // Options Trading

This is it.

I’ve been paper trading up until now. Today is my first day using real money! This is for real.

I was going to buy a Double Calendar, but IWM and EEM had negative skews. So I sold an Iron Condor on the SPY.
I’m almost a full point above center, because I’m betting on the market being bearish soon. I sold CALLS and PUTS for at least $1, going as far OTM as possible. Looks like the market is predicting a bearish fall, because my graph is optimal when I sell puts further OTM. Current price is 114.96, and my breakevens are at 110.08 and 117.92. I’d prefer the breakevens to be a little wider, but at least the downside breakeven is close to 5 points lower than current price. If SPY goes up, I’m only 3 points from my breakeven, so I will watch this carefully.
I used half of my option power (was $5000, now $2378), hopefully leaving enough money for adjustments.
The SPY is my only position this month, because negative skews kept me from buying double calendars.

Hey!

1 Comment // Written on Mar 01, 2010 // Uncategorized

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