seth hahn

This is my current position on SBUX. It’s only one contract on one double calendar. There are about 17 days left until expiration. The red horizontal price levels on the 3-month day chart indicate the $0 profit levels, so I need to stay between those lines until expiration in order to profit.

Maybe I just don’t get it. But I don’t agree with their strategies, at least with Index Calendar strategy that I subscribed to and let them auto-trade my account for the past three months.

I lost a lot of money with them.

They seem to like to use two- or three-month wide calendar spreads, and bet on a directional bias, hoping at some point in the next 60 days that the underlying index will fall into the desired range. Well, from what I’ve learned from Dave’s Trading Pro System, we shouldn’t try to predict price, it will only get us into trouble.

So I am going back to what I know and what I’ve learned from TPS: set up strategies with neutral Delta, right in the middle of the sweet spot, with plenty of room for the stock to go up or down.

Watch for my next trade on this blog. I opened a position this morning, and will be honing my own skills according to the TPS strategies. Here’s to making money in 2011.

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!

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.

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.