Zac's Journal

[zacj346]

Maybe I'll get the boot since I'm a Yankee, didn't see any rules against it. I also didn't look, to be honest. This is a cross post, I'm trying to expand my trade journal syndication empire, I cut out some irrelevant things but not all. Some of my trading is done in Schwab, some in Robinhood. I talk about 2 positions today and reference 2 others, I have 9 altogether.

Since about February I've consolidated into one style of trading. Lets call it a Simple Options Income Strategy. After picking a stock I want to use I have a target of 20% or 1 year. At that point I just reevaluate whether I want to continue trading or find another. I go off of premium, I don't mess with the Greeks even though I admit I should. I start with weekly options and target 0.5% minimum. When I get forced into rolling situations I just roll out until the next step is at a profit. I try to keep my options under 3 months, but that's just a guideline. I'll fill in the rest of the backstory later, I'm doing this kind of last minute today, and if I get the boot why put all the effort in.

I accidentally used Hazelnut creamer in my coffee this morning. Its not enough to throw out the whole cup but it is enough to have a disappointing aftertaste of hazelnut. I just wanted to share some of my personal struggles with you guys as I feel like we have grown closer over these past 30 days.

Anyway…the color formally known as purple is adjusted cost, white is strike prices. I also highlighted 2 moments of negative equity. The word equity was just not coming to mind when I did that so I called it drawdown. I think you can just look at it and figure out what I'm trying to convey.

Most Underwater Trade: I did sell an option at $63 when my cost basis was $64.90. I did it a few times but that was the biggest difference. All percentages are based on the measuring tool and rounded, but its close enough.

The jump at the end is today's trade. I said I bought time with another trade, I can’t remember which one, but I’ve been mulling over the idea of buying the time back. SQ was stuck out in January and at $70. I also had $2600 in premium collected since buying in, which is why my cost basis was all the way down to $54.50. So I rolled SQ to 11/15 $89 and paid $1863.

I still have $803.11 in premium and with that an $89 strike would be around 20% return.

I did something similar with HIMS:

What’s different is I’m actually -$377.25 in premium but the $29 strike will give me around a 23% return with the negative premium.

Altogether on paper I paid out $3026.39, but really that was just possible profit tied up in those longer strike dates.

 

[zacj346]

Swing and a miss this week. I was hoping to get out of some positions but it didn’t happen. I also traded off my phone today so I didn’t have any cost basis numbers in front of me. But I didn’t just wing it, that's for amateurs. I relied on the philosophy of the great Robert Boucher Jr. who once said; “ ..I like school. And I like football. And I’m going to keep doing them both because they make me feel good.”

Okay, that might be a line from The Waterboy, but I still think it's a valid argument. Sure, I may have undercut HIMS and its strike is a few hundred dollars underwater. But I’ll sort that out later. $448.24 in Premium today. SQ currently ITM $1242.56 (15.01%) return locked in, probably can get that up to 20% if the price holds out. DG and BP are slightly positive around 0.5%, HIMS -$418.03 (-19%) strike is -$226.51 (-9.5%). I could try to adjust it Monday, but I’m just going to see what happens. Receipts are below. These four day work weeks are rough, so this is all I got for ya.

 

[zacj346]

Okay, I made up another chart for you guys. Let's look at my HIMS position and how it's shaking out. Purple is Cost Basis, White is Strike Price, Green is Total Cost. Cost basis was determined by going week to week and getting P/L on Fridays and not after each option roll to make it easy for me. The trade is in a Schwab account so it's simple to pull information this way.

There is a lot going on in this trade so I’ll break down what's going on. I started this trade on 6/24 with 2 Put Options. On 7/19 I let one Option get assigned at $21.50 and rolled the other and had an option on both sides. I’m not going to do this in the future, it just made things more complicated on the spreadsheet side. After I was partly assigned I had a chunk of Equity built up for my cost basis. You can see I was also buying shares when it was low, and if you think that doesn’t make any sense, or “Losers average losers” flashes in your mind, then I feel you. It doesn’t add anything to the HIMS trade but it is a strategy I’ll employ on my dividend positions. I just didn’t have any dividend position to play with in August. The only change I will make is waiting for a turn around and placing a buy order just below my cost basis. As it sits the average of the 14 extra shares was $16.20 and I don’t think it would have been that much of a difference to put buy orders under my cost basis. So that's a good thing out of this trade.

The Call position actually was set for January in Sept. the Put position was set for January in Oct. so it was locked up and I just sat on it for a few weeks until I closed out of the Put side. Instead of trying to square the circle on my spreadsheet I decided to focus on Calls more. The math is better, I don’t have to worry about putting money on the trade as prices rise. I just like it better when my position size isn’t variable.

So that brings everything up to date, I rolled back the call side to try and get an exit on the jump last week but it fizzled and now it's underwater. So that brings up the question of whether it was a good idea to give back all my premium plus another $300 something to try and catch the spike in price. I’m going to say yes, the math work. I would have exited with over 20% profit, which is my target for a year from a position I’ve had for 5 months. I don't have a reason not to try and do that. I’m going to label this one Good Trade, Bad Result.

It is the most interesting trade I got right now, so at least it gives me something to talk about. Below is everything else going on. Schwab doesn't give me a nice weekly graph so I pulled from my performance page.

And as a special bonus for you guys at Trade2Win I am adding my Schwab Performance YTD and total performance just to add some street cred, as the kids say.

 

[zacj346]

This is what I was looking like premarket, about $65 down from the last time I posted it. $11,496 (16.62%). The numbers from the Robinhood IRA are included, just not pictured. That account doesn’t have a position right now, I’m doing something different with it that I’ll talk about in a bit.

I don’t have much going on today. I rolled SQ to the 12/27 $84 for $137.94. At $84 my profit is $1483.53 (17.92%) not bad, but I won’t be getting to 20% by the end of the year. I also rolled out HOOD to 1/17 $29 for $33.65. At $29 I’m sitting on $305.01 (12.70%). Only being 5 or 6 weeks into this HOOD trade it’s looking good, I’ll work on getting the chart drawn up when I have time.

Good news though, I started day trading. I heard it's all the rage, all the kids are talking about it. I went with a simple MACD strategy. I’m going long on crosses below the zero line. Super simple, I can trade it off my phone if I wanted to, which was something I wanted to be able to do. It works well enough to do what I want to do, and Tradingview has a nice little MACD strategy that will mark the crosses on the chart. It's all crosses, and I have no idea how to adjust it, but it saves me from having to watch the MACD lines when I know my setup is coming up; sometimes those numbers are hard to read.

Anyway, I took a trade right at the market open on CLSK. I bought 10 shares at $14.83. This didn’t follow the MACD strategy at all, it was already above the zero line, but I thought it might run. It didn’t so I set a Limit Sell for $15 and moved on. I went through and made my trades on SQ and HOOD and completely missed the middle trade. Bought 10 more shares at $13.90 and sold them at $14.25. I set that based on a trend line guesstimate that it wasn’t going to get much higher than $14.30 and I'm not even sure it made it back that far before it pulled back again. In and out in a few minutes and I made $3.54 (2.54%). The pullbacks below the zero line were getting smaller so I stopped for the day. Below are the Receipts .

So what’s going on? I am legitimately working on my day trading; got to fit in around here. But I still think it's gambling so I plan on rescuing the account with my option strategy should day trading not work out. So I’m not going to run a stop loss and I picked CLSK just because it was priced low enough that I could do this in the small Robinhood IRA, which is about $1900. I thought 10 shares was a good balance of trying to day trade and not being too far away from being able to rescue it. 10 bad trades and its options time. I have to work around PDT rules, but that’s just going to keep me from over trading. I do have a Take Profit in at $15 which would be 1% on that bad trade just in case it rises before I come back to trade again.