trading weekly options for a living...

[WklyOptions]

Good posts, I employ a similar strategy only with the bull put spread. I will continue to read.

Hi, CostaKapo,

Thx! I hope that the regularity and structured approach and adjustments will help some of the T2W traders that are trying to trade "intuitively".

Unfortunately - too many retail traders think and believe that they are using "discretionary/intuitive" trading. However, in fact, all they are really doing is trading in an "unorganized, unfocused" manner. And - many do not have any idea (even worse, a commitment and belief) of the trading EDGE(s) they are trying to trade. Too much "faith" in their guessing and hoping trading process! :whistling

In any case - I enjoy sharing my trading style and adjustments. So - will continue to do as such.

As you are also an options trader - for us, there is really no FEAR of any black swan events or being on the "wrong" side of the price trend. As long as we have locked up maximum risk of loss, and we can adjust around the core position and trend - we KNOW with certainty that it is a matter of time before the options positions will be in a risk-free zero cost basis profile. :clap:

I appreciate your input - and also enjoy reading your posts elsewhere! Especially on the options trading and hedge fund posts.

Best regards,

WklyOptions

 

[CostaKapo]

Hi, CostaKapo,

Thx! I hope that the regularity and structured approach and adjustments will help some of the T2W traders that are trying to trade "intuitively".

Unfortunately - too many retail traders think and believe that they are using "discretionary/intuitive" trading. However, in fact, all they are really doing is trading in an "unorganized, unfocused" manner. And - many do not have any idea (even worse, a commitment and belief) of the trading EDGE(s) they are trying to trade. Too much "faith" in their guessing and hoping trading process! :whistling

In any case - I enjoy sharing my trading style and adjustments. So - will continue to do as such.

As you are also an options trader - for us, there is really no FEAR of any black swan events or being on the "wrong" side of the price trend. As long as we have locked up maximum risk of loss, and we can adjust around the core position and trend - we KNOW with certainty that it is a matter of time before the options positions will be in a risk-free zero cost basis profile. :clap:

I appreciate your input - and also enjoy reading your posts elsewhere! Especially on the options trading and hedge fund posts.

Best regards,

WklyOptions

I agree. Using spreads and locking in the risk/reward at the time of the trade is a good structured way to go. What I see all too often for retail traders is they DO need to fear the black swan event because they are constantly risking 50%-95% of their available capital for every trade!

I currently will only have at max 20% of my available capital in play at any given time, so that given a "Black Swan" (2sd OTM) I wont be crushed. I adjust delta .30 in my positions, and if I collect 85% of the original premium I exit the play and put my capital back to use in the next play.

 

[CostaKapo]

Do you utilize the website profit.ly to verify trades. It is a cool little social network website for traders.

 

[WklyOptions]

Do you utilize the website profit.ly to verify trades. It is a cool little social network website for traders.

Hi, CostaKapo,

No - I do not use Profit.Ly - I've looked at that years ago.

It is a good social network website for traders as you said - but mostly it is for stock traders and highly speculative trading esp along the short-side of the trend.

Also - Profit.Ly is not a trade verification website nor is it licensed to conduct such processes. Like you indicated - it is mostly a social site for "playing" and "talking" about trading.

It is the job of every professional trader (and hopefully T2W traders as well) to go out and "verify" his/her own trading EDGE(s). And then further verify Closed Trades in blocks of 20-30 trades. Calculate, study, think! Did the EDGE(s) hold up? Or were there any/many trader "errors" and "variance/deviation" from the Trading Plan?

Profitable trading requires ongoing focus, thinking, and reviews/analysis, in the process itself. Unfortunately too many retail traders are more focused on the "status quo" and just staying in their comfort zone. Little do they know that it is all too common in retail trading that they can get very comfortable while getting very poor trading performance (and all other aspects of life in general if adopting the same "comfort" philosophy in life).

But - that line of discussion will be raised again in a different Home Trader thread soon.

Regards,

WklyOptions

 

[CostaKapo]

Hi, CostaKapo,

No - I do not use Profit.Ly - I've looked at that years ago.

It is a good social network website for traders as you said - but mostly it is for stock traders and highly speculative trading esp along the short-side of the trend.

Also - Profit.Ly is not a trade verification website nor is it licensed to conduct such processes. Like you indicated - it is mostly a social site for "playing" and "talking" about trading.

It is the job of every professional trader (and hopefully T2W traders as well) to go out and "verify" his/her own trading EDGE(s). And then further verify Closed Trades in blocks of 20-30 trades. Calculate, study, think! Did the EDGE(s) hold up? Or were there any/many trader "errors" and "variance/deviation" from the Trading Plan?

Profitable trading requires ongoing focus, thinking, and reviews/analysis, in the process itself. Unfortunately too many retail traders are more focused on the "status quo" and just staying in their comfort zone. Little do they know that it is all too common in retail trading that they can get very comfortable while getting very poor trading performance (and all other aspects of life in general if adopting the same "comfort" philosophy in life).

But - that line of discussion will be raised again in a different Home Trader thread soon.

Regards,

WklyOptions

Do you have a website or just forums?

 

[WklyOptions]

Do you have a website or just forums?

Hi, CostaKapo,

No website - just plain old emailing is sufficient for me.

Spend most of the time in front of computer screen for intraday trading and options trading.

Otherwise, just too many other things more productive and enjoyable to do away from the PC. :clap: Just let the PC do the work to make the $$$ - and focus my time on more important issues.

Regards,

WklyOptions

 

[tc4041]

Nice thread.

 

[WklyOptions]

Greetings!

Nice thread.

Hi, tc4041,

Thanks for your comment! Much appreciated.

Saw your website - wow! Fantastic effort and work put in. You have been a busy bee with all of those manuals. :clap:

Are you actively trading FX? If so - precisely in what time frames?

I only daytrade FX binary options if and when I have several hours of "game time" that is open for the London and NY sessions.

However - the bulk (98%) of my trades are options-based income trading using US-listed options.

When you have some time, why don't you share how you enjoy approaching the FX markets and time frames in your own trading style?

Look forward to your ideas and details more! :idea:

Regards,

WklyOptions

 

[WklyOptions]

FAS $104 at Friday expiry - today 2 adjustments...

Current Positions:

Long (+4) FAS Sep4(26th) $107 Call @ (-$0.61)

Long (+4) FAS Sep4(26th) $113 Call @ (-$1.13)

Short (-4) FAS Oct1(3rd) $102.5 Call @ (+$2.05)
($1.92-$2.30)

Long (+4) FAS Oct1(3rd) $104.5 Call @ (-$1.17)
($1.07-$1.22)

Long (+4) FAS Oct(18th) $115 Call @ (-$2.15)
($0.19-$0.43)

Initial Cost Basis: (-$4.62)

Previous Cost Basis: (-$0.82)

Current Cost Basis: (-$0.11) :clap:

Hi, T2W traders,

The Oct 3rd Friday expiry had FAS closing at $104. The front weekly Oct call credit spread expired in between the strike price. Hence the FAS had a negative Cost Basis adjustment of (-$1.50) from this expiry.

Today I made two FAS adjustments: (1) Extended the FAS campaign into Nov while lowering the Long call Strike Price down from $115 to $105. This added more to the Cost Basis - but only temporarily until we can catch an uptrend again in FAS. In addition this ROLL DOWN and OUT = increased bullish torque for the FAS campaign.

The next adjustment (2) was to sell weekly call credit spread again to generate some income.

Adjustments today with FAS @ $103.97

Sold to close (-4) FAS Oct(18th) $115 Call @ (+$0.30)

Bought to open (+4) FAS Nov(17th) $105 Call (-$5.20)

@ Net Debit (-$4.90)

Sold to open (-4) FAS Oct2(10th) $104.5 Call @ (+$1.82)

Bought to open (+4) FAS Oct2(10th) $106.5 Call @ (-$1.03)

@ Net Credit (+$0.79)

Current Positions:

Short (-4) FAS Oct2(10th) $104.5 Call @ (+$1.82)

Long (+4) FAS Oct2(10th) $106.5 Call @ (-$1.03)

Long (+4) FAS Nov(17th) $105 Call @ (-$5.20)

Initial Cost Basis: (-$4.62) per spread - initiated 8/9/14

Previous Cost Basis: (-$0.11) per spread

Current Cost Basis: (-$4.22) :whistling

Chart & Position Analysis:

With the adjustments above, the Current Cost Basis of the FAS campaign is nearly back to its Initial Cost Basis. Well - the primary reason for this is to increase the bullish torque for the campaign and giving it additional time for the next bullish leg to occur. :idea:

The Weekly and Monthly charts continue to indicate a bullish bias with the Daily time frame in a neutral to weak bullish bias.

Plan:
(1) HOLD positions.
(2) Extract extrinsic time value of the short (-4) Oct2(10th) Weekly $104.5 Call.
(3) Look to Adjust if FAS > $106 zone.

Regards,

WklyOptions

 

[WklyOptions]

FAS - $95.25 - broke below Key Support - Adj made...

Current Positions:

Short (-4) FAS Oct2(10th) $104.5 Call @ (+$1.82)

Long (+4) FAS Oct2(10th) $106.5 Call @ (-$1.03)

Long (+4) FAS Nov(17th) $105 Call @ (-$5.20)

Initial Cost Basis: (-$4.62) per spread - initiated 8/9/14

Previous Cost Basis: (-$0.11) per spread

Current Cost Basis: (-$4.22) :whistling

Hi T2W traders,

Well, FAS broke down strongly below Key Support at $97.34 - and is clearly going to test the next Key Support level at $92.

On Fri, 10/10/2014 - I made the following Adjustments:

Expired Options:

Short (-4) FAS Oct2(10th) $104.5 Call - Expired out of the money.

Long (+4) FAS Oct2(10th) $106.5 Call - Expired out of the money.

Adjustments:

Sold to open (-4) FAS Oct(18th) $98.5 Call @ (+$2.75)

Bought to open (+4) FAS Oct(18th) $100.5 Call @ (-$1.96)

@ Net Credit (+$0.79)

Current Positions:

Short (-4) FAS Oct(18th) $98.5 Call @ (+$2.75)
($1.57-$1.73)

Long (+4) FAS Oct(18th) $100.5 Call @ (-$1.96)
($0.92-$1.10)

Long (+4) FAS Nov(17th) $105 Call @ (-$5.20)
($2.26-$2.79)

Initial Cost Basis: (-$4.62) per spread - initiated 8/9/14

Previous Cost Basis: (-$4.22) per spread

Current Cost Basis: (-$3.43) per spread :whistling

Chart & Position Analysis:

FAS is in a bearish trend and momentum bias and looking to test Key Support at the $92 price zone.

Plan:
(1) HOLD positions.
(2) Extract extrinsic time value of the Short (-4) FAS Oct(18th) $98.5 Call options.
(3) IF - FAS can find Key Support - then consider rolling down the Long (+4) Nov(17th) $105 Call to a lower Strike Price level to increase bullish torque at the new Key Suppot zone.
(4) Look to EXIT the Oct Call Credit Spread if < ($0.15).

Regards,

WklyOptions

 

[WklyOptions]

FAS $88.12 - Adjustment - added short call...

Current Positions:

Short (-4) FAS Oct(18th) $98.5 Call @ (+$2.75)
($1.57-$1.73)

Long (+4) FAS Oct(18th) $100.5 Call @ (-$1.96)
($0.92-$1.10)

Long (+4) FAS Nov(17th) $105 Call @ (-$5.20)
($2.26-$2.79)

Initial Cost Basis: (-$4.62) per spread - initiated 8/9/14

Previous Cost Basis: (-$4.22) per spread

Current Cost Basis: (-$3.43) per spread :whistling

T2W traders,

Same bearish trend/momentum at this time - FAS at $88 zone. The Short Weekly Call Credit spread due to expire this week at the $98.5/100.5 levels are at ($0.08). I made the follow Adjustments today:

1. Bought to Close (+4) FAS Oct(18th) $98.5 Call
2. Sold to Close (-4) FAS Oct(18th) $100.5 Call

@ Net Debit (-$0.08)

3. Sold to Open (-4) FAS Oct4(24th) $92 Call @ (+$2.03)

Total Net Net = (+$1.95)

Current Positions:

Short (-4) FAS Oct(18th) $98.5 Call @ (+$2.75)

Long (+4) FAS Oct(18th) $100.5 Call @ (-$1.96)

Short (-4) FAS Oct4(24th) $92 Call @ (+$2.03)

Long (+4) FAS Nov(17th) $105 Call @ (-$5.20)

Initial Cost Basis: (-$4.62) per spread - initiated 8/9/14

Previous Cost Basis: (-$3.43) per spread

Current Cost Basis: (-$1.48) per spread

Chart & Position Analysis:

FAS remains in a strong bearish trend/momentum bias. The current position is effectively a bearish Call Diagonal spread. It is expected that the front Short Weekly Call Credit Spread at $98.5/$100.5 will expiry Out of the Money.

Plan:
1. HOLD positions.
2. Look to Adjust if FAS > $92.
3. Check on the Short Weekly Oct(18th) $98.5/$100.5 Call spread at Friday expiry.

Regards,

WklyOptions

 

[WklyOptions]

FAS $102.11 - Expiry Fri adjustment - how NOT to manage trades!

Current Positions:

Short (-4) FAS Oct4(24th) $92 Call @ (+$2.03)

Long (+4) FAS Nov(17th) $105 Call @ (-$5.20)

Initial Cost Basis: (-$4.62) per spread - initiated 8/9/14

Previous Cost Basis: (-$3.43) per spread

Current Cost Basis: (-$1.48) per spread

Hi, T2W traders,

FAS made a large move to the upside over the past trading week - and unfortunately I did not manage this FAS campaign well. I was away on travels and doing a consulting project - and it "cost" me one or more key Adjustments to this FAS campaign. :!:

It is nobody's fault but my own. And for this error, I had to make a drastic adjustment today: changed the entire campaign into a reverse diagonal spread.

Here is the Adjustment:

1. Bought to Close (+1x) FAS Oct4(24th) Weekly $92 Call @ (-$10.20)

2. Sold to Open (-1x) FAS Apr 2015 (18th) $102 Call @ (+$10.40)

@ Net Credit (+$0.20)

Current Positions:

Long (+1x) FAS Nov (17th) $105 Call @ (-$5.20)

Short (-1x) FAS Apr 2015 (18th) $102 Call @ (+$10.40)

Initial Cost Basis: (-$4.62) per spread - initiated 8/9/14

Previous Cost Basis: (-$1.48) per spread

Current Cost Basis: (-$1.28) per spread

Chart & Position Analysis:

FAS remains bullish over the past trading week. It is at a critical Fibo 62% level from the previous large downside swing. :whistling

Plan:
3. Hold positions.
4. If - FAS can move back to the downside over the next few weeks, I will look to buy back the Apr 2015 short call leg.

In managing this reverse diagonal spread, I will look to extend the campaign's duration for at least another 1-3 months!

Again - the results of neglected management & adjustments this past week has caused this campaign to go into "overtime" play. Normally I am looking to exit near the 8-12 week period. But this one looks to take a longer exit scenario.

Well, just have to get better returns for the increased campaign duration!

Regards,

WklyOptions