OPEN: RUT Oct Iron Condor

Today I opened the first of 3 ICs for October on RUT.
SOLD -100 VERTICAL RUT 100 OCT 08 640/630 PUT @ $1.00 credit
SOLD -100 VERTICAL RUT 100 OCT 08 800/810 CALL @ $1.30 credit

As RUT moves over the next few weeks, I will look at adding the next ICs. I will keep you posted.

AAPL Dbl.Diag. Sep/Oct 190/160/185/165

BOT DBL DIAG AAPL 100 OCT 08/SEP 08 190/160/185/165 CALL/PUT/CALL/PUT @ $3.36 debit

OPEN & ADJUST: FSLR Triple Calendar

On 8/7/08 I opened a "shotgun" or triple calendar as follows:
BOT +3 CALENDAR FSLR 100 DEC 08/SEP 08 250 PUT @ $19.30 debit
BOT +3 CALENDAR FSLR 100 DEC 08/SEP 08 270 PUT @ $20.80 debit
BOT +3 CALENDAR FSLR 100 DEC 08/SEP 08 290 PUT @ $20.30 debit

My total cost basis was $60.40. I have been watching this stock channel between 230 and 300 since April.

On 8/8/08 I adjusted by removing the following:
SOLD -3 CALENDAR FSLR 100 DEC 08/SEP 08 290 PUT @$17.90 credit

On 8/12/08 I adjusted by adding as follows to make a :
BOT +5 CALENDAR FSLR 100 DEC 08/SEP 08 230 PUT @17.00
Here's what my chart looked like before the adjustment:


Here's what it looked like after adding the 230 calendar:


Today on 8/20/08, I adjusted again as my analysis graph shifted again:
SOLD -5 CALENDAR FSLR 100 DEC 08/SEP 08 230 PUT @15.20
Here's what it looked like before the adjustment:


Here's when I sold the 230 calendar. After adjusting by removing the 230 put calendar (higher B/E on upside and lower delta and freed up more capital):


So now I am in the double calendar at 250 & 270.

ADJUST: RUT Sep Iron Condor

On 8/12/08 I BOT VERTICAL RUT 100 SEP 08 650/640 PUT @ $0.65 debit
SOLD VERTICAL RUT 100 SEP 08 690/680 PUT @ $1.70 credit

This brings my net credit to $4.20/ risk of 10-4.20= 72.4% ROI potential

Today, I needed to adjust my position again by adding:
SOLD -100 VERTICAL RUT 100 SEP 08 680/670 PUT @ $1.50 credit
SOLD -100 VERTICAL RUT 100 SEP 08 780/790 CALL @ $1.60 credit

This is the last 3rd of the whole position. I have been scaling into this trade as time progressed (1/3 at a time). Now I will hold this trade into Sep., but not to expiration. I will look to leg out of this trade as it moves in one direction or another. Since I am in 3 different ICs, it is best to leg out of this one vertical at a time so the order will fill. It is difficult to exit this trade in one whole chunk because most brokerages would see it as a complex order.

ADJUST: RUT Sep Iron Condor

As RUT continues upward, I removed my bottom bull put spread and sold a new one higher up so I would not have to put more money in the trade, but still be able to reduce my delta exposure and my BP effect (margin). This also increased my theta and vega.

BOT VERTICAL RUT 100 SEP 08 650/640 PUT @ $0.65 debit
SOLD VERTICAL RUT 100 SEP 08 690/680 PUT @ $1.70 credit

This brings my net credit to $4.20/ risk of 10-4.20= 72.4% ROI potential

ADJUST: RUT Sep Iron Condor

Since I was planning on trading RUT in thirds, today I am adding my second 1/3 portion. RUT has moved up since I opened the trade so I am placing another iron condor at strikes slightly higher than before.

SOLD VERTICAL RUT 100 SEP 08 820/830 CALL @ $0.25 credit
SOLD VERTICAL RUT 100 SEP 08 670/660 PUT @ $1.30 credit

My previousnet credit was $1.60, so now my new potential is 1.60+0.25+1.30= $3.15/ risk of 10.00-3.15= 45.9% ROI potential

SHLD Sep 110/115 BRCS

Today I saw some consolidation around 90 with very high volatility relative to itself. So I put on a deep OTM bear call spread as follows:

SOLD VERTICAL SHLD 100 SEP 08 110/115 CALL @ $0.40 credit

Set exit order GTC at $0.05 debit.

Sized for max loss.

0.40/4.60= 8.7% ROI potential

CLOSE: SHLD Vertical (brcs)

On 8/7/08:
SOLD -43 VERTICAL SHLD 100 SEP 08 110/115 CALL @ $0.40 credit

Today I exited the vertical on a GTC limit order I set from the beginning:
BOT +43 VERTICAL SHLD 100 SEP 08 110/115 CALL @ $0.10 debit

0.30/4.60= 6.5% ROI

RUT Iron Condor Sep 650/640 blps & 800/810 brcs

Right after I closed out of my August I.C. on RUT, I put on another for Sep. I will continue to do this same type of trade each month to bulk up my portfolio and hedge against riskier options trades. This strategy is fairly conservative in that the break-even is spread far apart so the stock can fluctuate a lot and still be profitable. This can allow for you to size the overall trade up to 20-30% of your portfolio, as long as you manage this beast. This type of trade should be legged into by 3rds. So I placed the first 3rd today and I will leg into the other parts later if I am still profitable. Size appropriately!

SOLD VERTICAL RUT 100 SEP 08 650/640 PUT @ $1.00
SOLD VERTICAL RUT 100 SEP 08 800/810 CALL @ $0.60

This gives me a huge B/E between 648.63 & 801.87. So the stock can fluctuate dramatically but as long as it stays within this range, I profit. Once the stock starts approaching one of the B/E lines, then I can adjust it and make it delta neutral by adding another vertical or buying or selling calls or puts on it.

exit plan: Get out if my delta risk is 5% of my overall trade size. Get out 1 week prior to expry. Get out if it approaches B/E limit and cannot be managed appropriately for it to be profitable.

Total credit 1.60/ Risk 8.40= 19% ROI potential

RUT Iron Condor Aug 760/770 BRCS & 600/590 BLPS

Today I closed out of my August RUT Iron Condor 760/770 BRCS & 600/590 BLPS for $0.30 debit.

Although I had another week to exit (my exit rule is to get out 1 week prior to expry), I exited today since my delta on the trade was worth -459 and my total delta on the long positions was 10,000 (100 contracts X 100 delta). I
So 459/10000= 4.6%
My delta rule is to exit whenever my delta exposure is 5% of my trade. t was not worth the risk to wait longer to exit (I learned this lesson the hard way last month).

I legged in on 6/26 with the BLPS & 7/1 with the BRCS for a net credit of $1.90.

1.60 profit/8.10 risk= 19.7% ROI

Welcome Back Gekko

Hello all- I haven't been posting my trades for the last month because of work craziness however I have been actively trading all month. We took a beating with energy stocks as they turned bearish on us and we had to adjust like crazy to stay delta neutral.

My biggest lesson this month is to take profits when I get them instead of leaving them on the table to "give away" to the market maker!

I had an I.C. on MEE for about a month that was doing very well, staying within my B/E ranges, but then on the second to the last day of expiration as it suddenly became close to max profit, I went to lunch for an hour and then the stock tanked on me. It was rough and I lost on the trade, however, I know now that I will never make that same mistake again. The famous song "The Gambler" by Kenny Rogers now rings in my head each time I think of this. I am learning how to "know when to hold them, know when to fold them."

Bottom line is: when you have trades on in the last week of expry, especially within the last 2 days, they need to be watched and nursed.