I now post to http://www.insanemoney.com for anyone reading this blog. You can set up a free userid and password through Insane Money. I am working on the model portfolio.
Posted on September 24th, 2009 by Gekko
I had a good talk with Mojo (my trading partner) on Wednesday night after our team meeting regarding trading in general. Some things came to light that I should share with you all that may be of benefit to you. Many of you will hopefully see things for yourselves as traders…
1. I work too hard- Because of the way we were raised, most of us think this is a noble trait. We are taught to work hard through school so we can later get good jobs and make lots of money, right? My parents were from Italy and survived WWII time and we came to the US when I was very young. For any of you that come from immigrant families, you know the struggles of watching your parents work their tails off (many times with 2-3 jobs a piece at the same time) just to survive in this country. It’s not an easy life, but one that I have always been proud of. So with this, I have ingrained in me the trait of working really hard. However, with trading, I am seeing it as a huge flaw. Trading should remain simple and effective, not tedious or complex. You have to trade smarter, not harder. This is probably the biggest lesson for me. I have to “re-wire” my brain without letting go of the great lessons my parent taught me. In this, I guess everything has it’s place.
2. I rush things because I lack patience- Mojo teased me about my ROTC background back through high school and college. From this, when I am given a task/mission, I like to go all-in and start knocking things out (”Git ‘er done” mentality) This can also be a huge problem as with trading, you NEED patience or you will either lose interest or hope if you don’t make your first million in a year, or worse off- you’ll blow up your account through reckless trading! I rushed with trades before I had my most current trading rules established (for those of you that requested my rules, I did not forget, I am just hashing them out still with my trading partner)!
3. I over-complicate things- I am a VERY detail-oriented person while Mojo is a big-picture type of person, so we are trying to find a healthy balance in teaching trading and blogging. I had the understanding that most people that read this blog already know what calendars are, for example, so I didn’t explain things on a more basic level. For this I apologize if I confused anyone! :)
Ok so with my confessions today, I encourage anyone to give me feedback (you can send me a private message through Insane Money if you choose). This helps me to become a better trader, and helps you understand what I am talking about so you can become a better trader! Thanks for reading….Happy Trading!
-Gekko
Thursday, September 24, 2009
Tuesday, December 16, 2008
THIS SITE IS UNDER CONSTRUCTION
Hello guys,
Since I branched over to live money trading as well as futures trading on top of options, I have been keeping track of all my trades and adjustments on a spreadsheet so it has been hard to post all my trades on this blog. I currently am trading for a few people I know so I am diligently working on those accounts and getting everything up and running. This site is temporarily under construction, but I will resume posting my trades after the new year.
This month is always the most difficult of the year to trade as volume decreases because of holidays and time off for traders. Also, we have had quite a bit of volatility as our future President Obama and his teams try everything to salvage this great nation. Trade very cautiously during this time if at all. There's nothing wrong with taking a few weeks off from it either.
I am currently in some diagonal trades on BAC, C, GE & SNE. I also have a wide spread iron condor on RUT with a long put and long call for protection.
If you are looking for a great site and a trade team, please check out www.insanemoney.com. My good friend Mojo started that blog over a year ago and it has grown into a community of traders all aspiring to trade full-time. Check it out and see what you think.
Merry Christmas & Happy New Year to all!
Stay tuned for future posts...
Since I branched over to live money trading as well as futures trading on top of options, I have been keeping track of all my trades and adjustments on a spreadsheet so it has been hard to post all my trades on this blog. I currently am trading for a few people I know so I am diligently working on those accounts and getting everything up and running. This site is temporarily under construction, but I will resume posting my trades after the new year.
This month is always the most difficult of the year to trade as volume decreases because of holidays and time off for traders. Also, we have had quite a bit of volatility as our future President Obama and his teams try everything to salvage this great nation. Trade very cautiously during this time if at all. There's nothing wrong with taking a few weeks off from it either.
I am currently in some diagonal trades on BAC, C, GE & SNE. I also have a wide spread iron condor on RUT with a long put and long call for protection.
If you are looking for a great site and a trade team, please check out www.insanemoney.com. My good friend Mojo started that blog over a year ago and it has grown into a community of traders all aspiring to trade full-time. Check it out and see what you think.
Merry Christmas & Happy New Year to all!
Stay tuned for future posts...
Thursday, October 2, 2008
ADJUST: AIG & C Diagonals
On 10/2/08, I entered as follows:
AIG- Bought Jan '10 10 leap calls & sold Oct 5 calls against them for total debit of $0.64.
C- Bought Jan '10 30 leap calls & sold Oct 22.5 calls against them for total debit of $0.85.
Today I rolled my October shorts to November to lock in profits.
AIG- I rolled Oct 5 call to Nov 6 call for a credit of $1.06.
C- I rolled Oct 22.5 call to Nov 22.5 call for a credit of $2.89.
So my new cost basis is:
AIG- $0.64 debit + 1.06 credit = $1.70
C- $0.85 debit + $2.89= $2.04
So now these are both free trades as I have made more than my original costs.
AIG- Bought Jan '10 10 leap calls & sold Oct 5 calls against them for total debit of $0.64.
C- Bought Jan '10 30 leap calls & sold Oct 22.5 calls against them for total debit of $0.85.
Today I rolled my October shorts to November to lock in profits.
AIG- I rolled Oct 5 call to Nov 6 call for a credit of $1.06.
C- I rolled Oct 22.5 call to Nov 22.5 call for a credit of $2.89.
So my new cost basis is:
AIG- $0.64 debit + 1.06 credit = $1.70
C- $0.85 debit + $2.89= $2.04
So now these are both free trades as I have made more than my original costs.
Time Diagonals- AIG, C, SPX
Just wanted to jot down some of the latest trades I got into this week.
I am doing several time diagonals to create monthly income and also hedge in the middle of the market volatility with the bailout. My fellow trade team members are also doing these from www.insanemoney.com.
These are called "time diagonals" as you are buying leaps with longer time than the normal diagonals that only go out 3-4 months. These are great for now as stocks are cheap with the market downfall and you hedge yourself with lots of time in case the trend changes on you. By this time you are already in a free trade because you have brought in credits from each roll each month essentially lowering your cost basis.
AIG- Bought Jan '10 10 leap calls & sold Oct 5 calls against them for total debit of $0.64.
C- Bought Jan '10 30 leap calls & sold Oct 22.5 calls against them for total debit of $0.85. Today I am rolling my Oct short calls to the Nov 22.5 calls for a credit of $0.70 so now my cost basis is $0.15. So with one more roll to Dec I will be risk free on a "free trade" as I have paid off my cost basis with incoming credits from my rolls (as explained above).
SPX- Bought Jan'09 1250 Calls & sold Oct 1200 calls against them for total debit of $15.30.
I am doing several time diagonals to create monthly income and also hedge in the middle of the market volatility with the bailout. My fellow trade team members are also doing these from www.insanemoney.com.
These are called "time diagonals" as you are buying leaps with longer time than the normal diagonals that only go out 3-4 months. These are great for now as stocks are cheap with the market downfall and you hedge yourself with lots of time in case the trend changes on you. By this time you are already in a free trade because you have brought in credits from each roll each month essentially lowering your cost basis.
AIG- Bought Jan '10 10 leap calls & sold Oct 5 calls against them for total debit of $0.64.
C- Bought Jan '10 30 leap calls & sold Oct 22.5 calls against them for total debit of $0.85. Today I am rolling my Oct short calls to the Nov 22.5 calls for a credit of $0.70 so now my cost basis is $0.15. So with one more roll to Dec I will be risk free on a "free trade" as I have paid off my cost basis with incoming credits from my rolls (as explained above).
SPX- Bought Jan'09 1250 Calls & sold Oct 1200 calls against them for total debit of $15.30.
Bear Call Spreads (BRCS)- AMX, CHL & EEM
Here are some bear call spreads I'm looking at for this week that I brought up in last night's meeting. I'm expecting to be in and out of all 3 of these brcs so I am setting limit orders to GTC for 80% of the credit. BTW, I am having trouble attaching my charts to this post so my AMX chart is missing below (not sure what's going on with that)...
AMX- Oct 50/55- currently at $0.92 but I will place an order at around $0.97-1.00 to capture some more premium with the news on the bailout. (the final vote in the House of Rep. is set for tomorrow). From the chart, I see the downward channel it has been in since April. The volatility on the options chain is very high with the front month near 73.45%. The last 2 days have retraced up so that's why the premium is in the $0.90 cent range. I like the resistance level at 50 so it gives me a little cushion.
CHL- Oct 55/60- similar chart to AMX with a downward channel and the last 2 days bullish (for higher premium on the calls). The volatility on the options chain is very high with the front month near 77.53%. The current credit is $0.85, but I'll place my order at $0.95 and watch it today.
EEM- Oct 38/40 (this one's my favorite because I like $2- $2.50 strikes
The chart is like deja-vous to the other two. The volatility on the options chain is very high with the front month near 79.56%. So you can get $0.35 on a 1.65 risk! WOOHOO!
AMX- Oct 50/55- currently at $0.92 but I will place an order at around $0.97-1.00 to capture some more premium with the news on the bailout. (the final vote in the House of Rep. is set for tomorrow). From the chart, I see the downward channel it has been in since April. The volatility on the options chain is very high with the front month near 73.45%. The last 2 days have retraced up so that's why the premium is in the $0.90 cent range. I like the resistance level at 50 so it gives me a little cushion.
CHL- Oct 55/60- similar chart to AMX with a downward channel and the last 2 days bullish (for higher premium on the calls). The volatility on the options chain is very high with the front month near 77.53%. The current credit is $0.85, but I'll place my order at $0.95 and watch it today.
EEM- Oct 38/40 (this one's my favorite because I like $2- $2.50 strikes
The chart is like deja-vous to the other two. The volatility on the options chain is very high with the front month near 79.56%. So you can get $0.35 on a 1.65 risk! WOOHOO!
Friday, September 26, 2008
OPEN: RUT Oct Iron Condor
Here are some new positions I am back in again as they are more conservative. Please size these small in your portfolios to hedge against the volatility of the financial crisis.
Check out today's news on WAMU. JP Morgan has purchased Washington Mutual to rescue the financial markets yet again:
http://biz.yahoo.com/ap/080926/washington_mutual_future.html
RUT Oct Iron condor opened 9/23/08:
Oct 630/620 bull put spread for $1.00 credit
Oct 800/810 bear call spread for $0.55 credit
$1.55 credit/ ($10 spread - $1.55 credit) risk= 18.3% ROI potential with just the Iron Condor alone
I also added for extra protection onto this condor 15 long Oct 600 puts for $3.00 debit and 15 long Oct 820 calls for $0.65 debit. So now my new profit/risk calculation is as follows:
1.55/(10 margin between strikes + 3.00 debit + 0.65 debit)-1.55 credit= 12.8% ROI potential
Here's what it does to my profit graph. Notice how both the bottom and top (left and right of chart) swing upward so no matter which direction the market takes today, I will profit if it moves dramatically. The white curve represents my potential profit today. The green line represents what the profit would be at expiration.
Check out today's news on WAMU. JP Morgan has purchased Washington Mutual to rescue the financial markets yet again:
http://biz.yahoo.com/ap/080926/washington_mutual_future.html
RUT Oct Iron condor opened 9/23/08:
Oct 630/620 bull put spread for $1.00 credit
Oct 800/810 bear call spread for $0.55 credit
$1.55 credit/ ($10 spread - $1.55 credit) risk= 18.3% ROI potential with just the Iron Condor alone
I also added for extra protection onto this condor 15 long Oct 600 puts for $3.00 debit and 15 long Oct 820 calls for $0.65 debit. So now my new profit/risk calculation is as follows:
1.55/(10 margin between strikes + 3.00 debit + 0.65 debit)-1.55 credit= 12.8% ROI potential
Here's what it does to my profit graph. Notice how both the bottom and top (left and right of chart) swing upward so no matter which direction the market takes today, I will profit if it moves dramatically. The white curve represents my potential profit today. The green line represents what the profit would be at expiration.
Wednesday, September 24, 2008
Testimonial
Hi guys,
I am doing this reluctantly but I promised Mojo (my trading friend & mentor from www.insanemoney.com) that I would write this post this morning since I've avoided it for 2 days. First of all, I need to acknowledge Mojo for having faith in me that trading can happen. Also, thanks for calling me out whenever I don't follow my rules! And most importantly, thank you for your level of integrity with teaching. Rock on dude! Oh and by the way, I just have to interject right here that chic traders DO ROCK! HAHA! I don't know what else it will take to prove you wrong!
Essentially what happened was on Monday around lunch time, I basically liquidated my entire account for a day's profit of around $81,900 (on a paper account that started from $1 million in January 2008. This was a 9.6% on my portfolio from last month that normally would take me 1-2 months to generate, and it happened within a matter of hours. I never thought that much could be made in a few hours! All this even happened after taking a beating through July/August in my account from the energy fall. On Friday, as I last posted under "What a Week" from Whiskeywoman, I wrote that I had legged out of most of my bullish positions to lock in profits. This ended very well for the day so I was not remotely worried come Monday morning when the market opened and the media was panicking the whole nation. On Monday morning, I was ready to start adding bullish positions back in if the market started to retrace upward-and it did. I was just staring at my account and watching the profits increase exponentially within a matter of hours that I thought to myself, "what could be the worst that could happen if I pull out of my account now?" The answer is NOTHING! What's wrong with taking profits and running in the middle of one of the best inefficiencies in the market like now?
The funniest thing about all this is all the articles put out by the media. My favorite one was yesterday's front page article on finance.yahoo.com titled "Angst returns to Wall Street: Stocks dive, oil soars." This just shows you how much fear is bred into the marketplace that's targeted at all the traders without rules and a system. They get eaten alive while the pros walk to the bank skipping and smiling!
The biggest lesson of all of this is not that I profited like crazy in one day...that doesn't teach much to a trader other than make him/her potentially extremely emotional if not careful. The real lesson was that after over a year of trading my butt off, I finally reached a point in emotional trading maturity that I was willing to completely pull out of the market, take profits, and take a step back and breathe instead of trying to chase the carrot and constantly telling myself that I could keep trying to go for max profit.
My biggest hesitation in writing this post on Monday when this happened was this...I thought to myself "well the people on the blog might not see this as any real profit since it's all on paper." This in itself is hard to write for me, but I promised Mojo that I would share everything-the good and the bad. Therefore, this post is dedicated to all the guys that are either beginning to trade or are still paper-trading with the goal to switch over to real money. Understand that over the past year of trading with Mojo and the IM gang, I have ALWAYS treated my paper account as though it was real money so I know that it will "manifest" into real money sooner than I can imagine. I guess you could say that this is the one area where I can add "feeling" to the pot. It FEELS real!
I am a true believer in miracles, even taking religion/faith aside. There really is a lot of power in your thoughts-good or bad. I did the Landmark Forum(thanks to Mojo) back in July 2006 and I watched "The Secret" about 1 1/2 years ago, and since then I have been focusing my mind on trading and eventually making it real one day. Well, I guess that day has come. So i am transitioning into real money now. So for any of you that think that you may never "get this stuff" or that it will take forever to trade real money, THINK AGAIN!
Stick with it, stick with your rules, find a good trading mentor and/or group and share your triumphs and struggles. Also, take criticism on your trading-don't fight it.
Happy trading everyone. Thanks for listening (reading this). Ciao!
I am doing this reluctantly but I promised Mojo (my trading friend & mentor from www.insanemoney.com) that I would write this post this morning since I've avoided it for 2 days. First of all, I need to acknowledge Mojo for having faith in me that trading can happen. Also, thanks for calling me out whenever I don't follow my rules! And most importantly, thank you for your level of integrity with teaching. Rock on dude! Oh and by the way, I just have to interject right here that chic traders DO ROCK! HAHA! I don't know what else it will take to prove you wrong!
Essentially what happened was on Monday around lunch time, I basically liquidated my entire account for a day's profit of around $81,900 (on a paper account that started from $1 million in January 2008. This was a 9.6% on my portfolio from last month that normally would take me 1-2 months to generate, and it happened within a matter of hours. I never thought that much could be made in a few hours! All this even happened after taking a beating through July/August in my account from the energy fall. On Friday, as I last posted under "What a Week" from Whiskeywoman, I wrote that I had legged out of most of my bullish positions to lock in profits. This ended very well for the day so I was not remotely worried come Monday morning when the market opened and the media was panicking the whole nation. On Monday morning, I was ready to start adding bullish positions back in if the market started to retrace upward-and it did. I was just staring at my account and watching the profits increase exponentially within a matter of hours that I thought to myself, "what could be the worst that could happen if I pull out of my account now?" The answer is NOTHING! What's wrong with taking profits and running in the middle of one of the best inefficiencies in the market like now?
The funniest thing about all this is all the articles put out by the media. My favorite one was yesterday's front page article on finance.yahoo.com titled "Angst returns to Wall Street: Stocks dive, oil soars." This just shows you how much fear is bred into the marketplace that's targeted at all the traders without rules and a system. They get eaten alive while the pros walk to the bank skipping and smiling!
The biggest lesson of all of this is not that I profited like crazy in one day...that doesn't teach much to a trader other than make him/her potentially extremely emotional if not careful. The real lesson was that after over a year of trading my butt off, I finally reached a point in emotional trading maturity that I was willing to completely pull out of the market, take profits, and take a step back and breathe instead of trying to chase the carrot and constantly telling myself that I could keep trying to go for max profit.
My biggest hesitation in writing this post on Monday when this happened was this...I thought to myself "well the people on the blog might not see this as any real profit since it's all on paper." This in itself is hard to write for me, but I promised Mojo that I would share everything-the good and the bad. Therefore, this post is dedicated to all the guys that are either beginning to trade or are still paper-trading with the goal to switch over to real money. Understand that over the past year of trading with Mojo and the IM gang, I have ALWAYS treated my paper account as though it was real money so I know that it will "manifest" into real money sooner than I can imagine. I guess you could say that this is the one area where I can add "feeling" to the pot. It FEELS real!
I am a true believer in miracles, even taking religion/faith aside. There really is a lot of power in your thoughts-good or bad. I did the Landmark Forum(thanks to Mojo) back in July 2006 and I watched "The Secret" about 1 1/2 years ago, and since then I have been focusing my mind on trading and eventually making it real one day. Well, I guess that day has come. So i am transitioning into real money now. So for any of you that think that you may never "get this stuff" or that it will take forever to trade real money, THINK AGAIN!
Stick with it, stick with your rules, find a good trading mentor and/or group and share your triumphs and struggles. Also, take criticism on your trading-don't fight it.
Happy trading everyone. Thanks for listening (reading this). Ciao!
Tuesday, September 16, 2008
CLOSE: AAPL Dbl Diagonal +12.4%
Because of my protective put (Oct 160) I placed on my AAPL double diagonal last week, I have been able to turn a completely losing trade to a 12.4% winner! This a new concept for me (taught to me by my friend and mentor Mojo at www.insanemoney.com.
What's cool about it is that as you see a stock starting to turn in a direction (while you're in a non-directional trade) you can quickly cut losses and neutralize the trade without exiting for a loss by simply adding either protective puts or calls. As you could see on the graphs in my posts from 9/2 & 9/8, my profit curve on the left side swung upward so as the stock were to tank on me, I lock in profits even if the stock is now outside of my breakeven on my double diagonal.
So this afternoon at 2:15pm EST, the FOMC announced that the Fed rate would not change. The market freaked out anyway and tanked for a short while. This helped me with AAPL as it dragged AAPL down with the market. So I watched it and quickly scaled out of each leg in my trade one at a time. I was able to capture $14,292 of profit just today alone.
I am still learning this method so it may not all be perfect, but i just know that for this trade it worked!
What's cool about it is that as you see a stock starting to turn in a direction (while you're in a non-directional trade) you can quickly cut losses and neutralize the trade without exiting for a loss by simply adding either protective puts or calls. As you could see on the graphs in my posts from 9/2 & 9/8, my profit curve on the left side swung upward so as the stock were to tank on me, I lock in profits even if the stock is now outside of my breakeven on my double diagonal.
So this afternoon at 2:15pm EST, the FOMC announced that the Fed rate would not change. The market freaked out anyway and tanked for a short while. This helped me with AAPL as it dragged AAPL down with the market. So I watched it and quickly scaled out of each leg in my trade one at a time. I was able to capture $14,292 of profit just today alone.
I am still learning this method so it may not all be perfect, but i just know that for this trade it worked!
Thursday, September 11, 2008
DIA Put Diagonal
DIA has been in an overall downtrend over the past 1 year. I bought a deep ITM put and am selling the front month ATM to get the short position to expire worthless. Then each month I will continue to sell ATM to lower my cost basis and increase my ROI.
This puts my breakeven point all the way up to 115.22. Also, since I bought the Dec quarterlys I can get an extra credit for December which further increases my ROI potential.
SOLD -24 DIA 100 SEP 08 110 PUT @ $0.70 credit
BOT +24 DIA 100 (Quarterlys) DEC5 08 120 PUT @ $9.20 debit
ROI potential for this month= 0.70 credit/9.20 cost basis= 7.6%
This puts my breakeven point all the way up to 115.22. Also, since I bought the Dec quarterlys I can get an extra credit for December which further increases my ROI potential.
SOLD -24 DIA 100 SEP 08 110 PUT @ $0.70 credit
BOT +24 DIA 100 (Quarterlys) DEC5 08 120 PUT @ $9.20 debit
ROI potential for this month= 0.70 credit/9.20 cost basis= 7.6%
Monday, September 8, 2008
ADJUST: AAPL Dbl. Diagonal
To neutralize my deltas again, I added:
BOT AAPL 100 SEP 08 160 PUT @ $6.00 debit
What this does is raise my profit curve on the downside so if AAPL continues downward quickly, I can regain profits on the downside. If AAPL heads back up then I would simply remove these protective puts. See the chart below...
BOT AAPL 100 SEP 08 160 PUT @ $6.00 debit
What this does is raise my profit curve on the downside so if AAPL continues downward quickly, I can regain profits on the downside. If AAPL heads back up then I would simply remove these protective puts. See the chart below...
Subscribe to:
Posts (Atom)
