[HIT 002] 3Q17 Options Trading
Hello Steemian Traders,
For today, I got my 50% of max out of COST, and put on DIA, VIX and GLD. I have one IWM position that needs some kind of management and the rest is just waiting for time.
As always, any of this is fair game for questions and comments. This isn't advice, just what I decided to do and yes we could all loose our shirts or more.
Quarter & Week Ending 29-SEPT-2017
Since this is also my first real position post I suppose there doesn't need to be any fanfare. However, I will say that other than single contract trades, I'll only post Small, Medium, or Large indicating sizes. Also, I suspect that my Medium position size is small by several folks calculations. Given I have < $100,000 to trade, I don't want to put more than 5% of my investment at risk for any one trade. I know folks with over $100,000 won't risk more than 1% to 2% on a trade.
If I could find more higher volatility trades to put on, I'd probably cut my position size as well.
Current Positions
| Symbol | Exp | DTE | Name | Strikes | Size | Theta | Cost | NetLiq | P/L Open | P/L Day | O/R/C |
|---|---|---|---|---|---|---|---|---|---|---|---|
| COST | Oct20 | 21 | Short Put Vert | 150/158 | M | ? | +1.60 | -0.80 | 0.00 | +0.16 | C |
| DIA | Nov17 | 49 | Short Put Vert | 214/219 | M | 0.40 | +0.66 | -0.62 | +0.04 | +0.04 | O |
| GLD | Nov17 | 49 | Short Put Vert | 117/120 | S | 0.58 | +0.66 | -0.72 | -0.06 | -0.06 | O |
| IWM | Nov17 | 49 | Short Put Vert | 136/141 | M | 0.65 | +0.74 | -0.46 | +0.28 | -0.04 | |
| Nov17 | 49 | Short Call Vert | 147/150 | M | 0.30 | +0.73 | -1.65 | -0.92 | +0.02 | ||
| QQQ | Oct20 | 21 | Short Put Vert | 137/142 | M | 1.45 | +0.82 | -0.43 | +0.39 | +0.26 | |
| Nov17 | 49 | Short Put Vert | 132/139 | M | 1.00 | +1.10 | -0.68 | +0.42 | +0.38 | ||
| SPY | Nov17 | 49 | Short Put Vert | 235/244 | M | 0.73 | +1.00 | -0.67 | +0.33 | +0.12 | |
| VIX | Nov15 | 46 | Long Call | 9.5 | S | -8.55 | -3.50 | +3.50 | 0.00 | 0.00 | O |
Closed Positions
COST closed using the 50% of Max Profit for $80 per contract.
NOTE1: No management necessary! When I put Short Verticals on, I immediately put on a GTC closing order for 50% of Max Profit.
NOTE2: The reason we write $80 per contract but the table shows Cost to NetLiq to be +0.80, is that all Options contracts are written on a 100 shares of the underlying stock or security. There for the 100x factor.
Rolled Positions
None. However, I'm open to suggestions on the IWM Short Call Vertical. It seems like the only positions that have hurt me this year are bearish ones.
Opened Positions
To redeploy the capital from COST it seemed better to go into an index, and DIA was the only one that didn't have a position in my portfolio as well has being a touch down on the day.
GLD and VIX being small positions are risks. VIX is more like insurance. If you look at the option chain there aren't many positions lower than 9.5, the market (S&P 500) has around 9 as the statistical noise floor. GLD is really just a speculative trade at this point. I feel like the market has gotten too complacent and wanted another trade to hedge the bullish bets.
Again, let me know what you've been up to and also, what you think about managing my IWM Short Call Vertical.
OK that is highly technical for me. I am just a simple seller of covered calls and puts. Perhaps you could explain the terms in your table for a start.
Sure, thanks for asking. I'm about a year into option trading so I'm not sure other's expertise or what sorts of trading they've looked at. In other things I've come across condescending when I thought it was just explaining. Also, writing wasn't really my major, so I'm still getting up to speed. LOL
Table Definitions (If these are too abbreviated, please ask for more):
Thanks again for helping me fill in the blanks. I'll make a couple of posts at least on two things that could use a bit more definition.
Not condescending at all. The name field is referring to what must be common terms for the type of trade so I need to do my homework there. The long and short description i am pretty hazy on too.
Long and short are the same in options as in stocks. Being long means you buy the thing and sell later. Being short means you sell it first (go negative) and then buy it back later.
For short, think of the US Congress. One bet on the national debt is that the economy will grow and dollars will be worth less later. Just like the price of a house from 1987 price vs today.
As for options, selling them lets you collect the premium over time. I'm working on a separate post about how I use Short Put spreads/verticals to make money.
OK i always sell the option to collect the premium. I rarely buy it back before it expires unless the cost has gone to less than $0.1 ie $1 to buy it back. Fidelity will do that trade for free. I only generally do it if i need to release the funds to be able to do another option sooner. But life usually gets in the way and the options expire more often than i buy them back early.
Please check out the next post, [HIT 003] Position Types-Short Put Vertical. It explains why I use it instead of just a short put. There are 3 quick reasons:
Crumb! It looks like Steemit is only showing through NetLiq in columns! What do you see? If so, I'm going to have to figure something else out instead of the markdown tables. :(
I see up to P/L Open and the format is weird
looks like this:
I might have to snapshot spreadsheet images instead next time.
Yeah i was going to suggest that you did, since that is what i did to show you how it looked. I often do that professionally anyway as it avoids the chance of inadvertently inserting you underlying spreadsheet and giving the house away.
This table isn't all that. I've tried to keep it just per contact set in size to keep perspective for each individual's account. Others have posted actual trade sizes.