I WILL BE AVAILABLE FOR CHATTING ONE HOUR DAILY BETWEEN 10 AND 11 AM PACIFIC TIME TO ANSWER QUESTIONS ABOUT POSTS ON THIS SITE. IF THERE IS A GOOD RESPONSE, I WILL BE MAKING THE CHAT INTO A CONFERENCE, WHERE SEVERAL PEOPLE COULD JOIN IN.
IF YOU HAVE ICHAT OR AOL INSTANT MESSENGER, ADD "PAPERPROFIT1@MAC.COM" IN YOUR BUDDY LIST AND JUST KEEP ON WATCHING TO SEE WHEN I AM AVAILABLE.
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How to view the entire chart:
1. Try clicking on the name of the most recent article in the column on the right. This will remove the "Archives" list.
2. Try right click on the chart itself and open it on a separate window.
I am sorry that I cannot always make the chart small enough to fit neatly on the left column. I want you to be able to see the details I want to point out.
I Hope this helps,
Juan
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I entered a bear put spread due to expire this friday!! on the SPX... It is working fine. I entered when the index went negative. The index closed close to the strike price of my shorts.
I also rolled over my IMCL June shorts to July. I reduced my cost by close to $3000. The IV on the new short is still well above the IV of the longs. I expect this situation to chance, and perhaps turn into further profits for me.
The Elliott wave count that best matches my interpretation is this double zigzag with a target of $1200. Notice the Oscillator is pointing down. Unless we have a hook forming at the bottom of the oscillator the trend will continue to be down.
Conventional Technical analysis shows a continued decline as the oscillators are giving no reversal signal. The index is now well below the 50 and the 20 dMA, suggesting that the trend is down.
I entered my short-term bear put spread this morning as the Oscllators both gave a sell signal. At this level, I see a zigzag completed on Thursday, and a wave X completed on Friday. The sell signal coincides with the initiation of yet another zigzag (this is my speculation). I have made an additional $1300 in paper profits today, playing with the house's money, as they say. Not bad for a day's work.
15 comments:
Hey Juan, I'm StranglingCondor from the optionetics boards. Good site you got here and the level of discussion is refreshing.
Oh and I just got short on the 3 majors after today's action.
I exited my trade this morning, prematurely. I thought the market was forming a double bottom, and then eventually continued on down. I am sure that I would be thanking my lucky stars if I had left the trade on...!
Oh, well, there is always tomorrow. I have found this SPX trading to be just great. I think I will keep on it. The Elliott wave patterns are very clear and the moves are quite significant. I will keep posting on it.
StranglingCondor: You are very welcome here. I enjoyed our discussions on the Beginners forum. I hope you can benefit from this board and contribute some trades of your own. In this site we operate under the golden rule as the only rule. Contribute and you'll make me happy. Be sure to tell other traders about us, if you can.
StranglingCondor,
Welcome.
Fortitude.
I see that most of the trades are of the ratioed calendar style. Most of my trades are calendars, sell front month buy next month to minimize vega and highlight theta. I'd post previous trades, but I'm not sure how.
"ANONYMOUS"
First, it would be nice if you could use an alias so we could keep tract of all your contributions.
If you'd like to post a trade for comment, you could enter the trade in the comment line specifying date of entry (this is important), strike prices, cost, and BTO or STO for each leg.
If you have Platinum, you can post the URL. just e-mail the trade to yourself (from platinum) and post the e-mail you recieve. If there is enough interest, I could take a screenshot of the trade and post in in an article.
WE all want to find methods that are reproducible under certain conditions, so make sure you tell us why you enter the trade, what was your trigger or catalyst.
Thanks so much for all contributions!!!
Perhaps one day soon we could construct a web site by which all traders can post articles of their own.
Juan
Oh that was me. Here's a recent one I did so it's up to date.
http://tinyurl.com/j8x5y
StranglingCondor,
What were your entry criteria for entering this trade?
Do you personally use a system for entry and exit?
Best Wishes.
Juan,
http://tinyurl.com/fwaod
I have been watching this successful trade that you placed recently on the SPX.
Have you closed it yet or rolled it forward and taken further money off the table?
Yes, Fortitude. Take a look a my post in this comment box above.
I exited prematurely. I could have had several hundred dollars more than what I got. However, this game is seriour business. You don't stick around to wait for the bounce. I believe that we completed a double zigzag down (I am posting a video clip), and the markets are due for a bounce.
At the proper time I will enter a similar position on the SPX or NDX.
Fortitude, my selection criteria is rather simple. Nothing to do with TA, although I prefer the BEs at the time to coincide with S/R levels. Low IV is preferred, although not a necessity. And position size so that you can lose the whole amount. Here's the key point. The spread value MUST be less than the remaining premium in the short option. Why? If you bought a 50c spread but there's only 40c of premium to decay, you would need IV to increase or a favorable move. If the spread is less than the premium, holding IV constant(why low IV is preferred as it most likely will go up) if the underlying stays exactly where it is or drifts in a directional bias, you win. A pseudo credit spread.
Hope this helps.
Condor..
The main issue here is how do you go about selecting your candidates. I think what you have described is how to select the trade from a list of candidates, which is very useful, of course. Your experience is much appreciated.
What I mean is that you may do some kind of search to pick 5-10 stocks that fit a profile. This is what completes the system.
My experience with calendars have been a dissaster, so I hope to benefit from your experience.
Thanks for your great contribution. Nice to see that a good bunc of guys have joined me.
StranglingCondor,
Thanks for the reply.
RE: “I prefer the BEs at the time to coincide with S/R levels. Low IV is preferred, although not a necessity. And position size so that you can lose the whole amount. Here's the key point. The spread value MUST be less than the remaining premium in the short option. Why? If you bought a 50c spread but there's only 40c of premium to decay, you would need IV to increase or a favorable move. If the spread is less than the premium, holding IV constant(why low IV is preferred as it most likely will go up) if the underlying stays exactly where it is or drifts in a directional bias, you win. A pseudo credit spread.”
Some questions;
I understand that S/R levels = support and resistance levels.
Does BEs = ‘Break evens’ or ‘buying events’ or something else?
When you say “And position size so that you can lose the whole amount”, are you referring to the real value of the sold front month option?
The reason I ask is because you imply that perhaps (but I am not sure) when you then go onto to write;
“The spread value MUST be less than the remaining premium in the short option. Why? If you bought a 50c spread but there's only 40c of premium to decay, you would need IV to increase or a favorable move.”
As Juan has written, “that you may do some kind of search to pick 5-10 stocks that fit a profile”
Please could you give us a ‘profile fit’ set up and explain using an example of a good candidate and perhaps examples of those which fail your selection criteria, one failed component of your selection process at a time, thereby reviewing all the components of your ‘profile fit’.
This would be extremely beneficial. Thanks again.
Best Wishes.
Yes, BE = breakeven. What I mean by position sizing is the size of the trade (1, 10, 100 lots).
As far as candidates go, I use the skew finder in platinum with some modifications. I don't know what to tell you as far as specific criteria go, I pretty much just eyeball the list. I can give those to Juan if he wants to post them.
Condor:
We don't mean to pressure you. You give us what you want and we all learn from that.
I thought I will look into your trading style this weekend in more detail.
if it is worth it we could write something up and place it on archive for others to peruse.
Again, thanks for your contribution.
Also feel free to comment or ask any questions you'd like about the materials presented here.
CHEERS!!
To all, an interesting list of books to ponder over;
http://www.geneva-finance.ch/fgpf/ch/fr-ch/file.cfm/document/LIVRES1.pdf?contentid=303
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