My long 100 QLD was up with the rest of the market this morning and I was stopped out of the trade for a small win. When QLD broke thorough a Resistance Level at 28 today, I waited for it to test the level before setting a stop. It tested and held so I put in a Stop Loss order at 27.90 to lock in a short term profit and keep the possiblity for a potential big run up.
Well the big run up didn't happen. I got stopped out probably 30 minutes later on a turnaround. What's interesting was that my thought was 'Oh Man...', I had thought I didn't set the Stop right and had been stopped out early. Well what I should've noticed is that my Stop hit, QLD rebounded a little, then plummeted with the rest of the market. Regardless, setting the stop was the right move, whether QLD soared or dropped from there. The trade filled at 27.95, giving me a two day profit of a whopping $39.00 before commissions.
Also this morning I sold to open 1 POT 60 put at $.55, receiving $52.05 after commissions. It's currently 28.2% OTM with 23 days until expiration. The Margin Requirment is $665 and the ROM is 8.3% and the Annualized ROM is 70.14%.
Wednesday, March 25, 2009
Tuesday, March 24, 2009
Trade Entered: Long 100 QLD
The market opened gap down today and never recovered. I still believe we are in a bullish environment and this is a consolidation day, as most stocks were lighter on volume today than they had been in the past week. Around 11:30 I bought to open 100 shares of QLD at market for an average fill price of 27.56, paying $2,761 dollars after commissions. The Q's (Ticker QQQQ) follows the NASDAQ 100 and is composed of pretty much the largest non financial stocks out there. It didn't make new 52-week lows in February like the S&P and Dow did, so obviously financials were weighing heavily on them. QLD is a 2x ETF that tracks QQQQ.
I set a stop at 26.9 today, which was just under the 27 area of short term resistance. The stop didn't hit today, however QLD closed near its low at 27.09.
If the market continues its weakness tomorrow, I may sell the shares for a loss, or perhaps write a covered call against them. We shall see.
Saturday, March 21, 2009
March Options Expiration
So this has been my first full month of options trading, let's look at the details.
ERX
2/20/09 Sell 1 Mar 17.5 Put @ 1.15.
3/2/09 Buy 1 Mar 17.5 Put @ 2.05.
Loss of $90.
This was a rocky road for me. I was anxious to make a trade and the 3x Energy ETF had such high premiums for being so far Out of The Money (OTM). The problem is since its 3x, there are huge swings, and I'm not able (yet) to handle them. I need to be able to set price targets for this ETF over a period of time and stick to a plan about how to handle it. When I bought it to close, I had visions of ERX dropping to 10 and crushing my portfolio. This would've ultimately ended OTM, but I didn't want to take put my portfolio at risk any further.
XSP
2/23/09 Sell 1 Mar 61 Put @ .51.
Expired Worthless.
Gain of $51.
I sold this 18% OTM, "How could the market drop 18% in a month? It's free money!" So maybe I didn't think exactly that, but it was close. The S&P actually hit 666 (putting XSP at 66) at its low for the year. I can't say I was ever worried about this trade, but it certainly was a rocky month for the S&P. I like XSP and will probably continue trading it in the future, as deep OTM puts in this market are fetching high prices do to the high volatitlity of the times.
DIG
3/6/09 Sell 2 Mar 14 Puts @ .2.
Expired Worthless
Gain of $40.
Looking to make up a gain from the ERX loss I target another energy ETF and put this trade on. If I would've looked at a one minute chart before trading this, I would've made a way better decision on the timing of the trade. Also to keep in mind, when you deal with options that are deep OTM and have low prices, it's hard to close them early. In this trade for example, the Mar 14 Puts had an Ask of .1 up until the end.
I also closed PCLN (see previous post) this month for a gain, and am looking for another April option to trade . XME, DIG, USO, and things in Precious Metals/Oil are looking good for a trade.
ERX
2/20/09 Sell 1 Mar 17.5 Put @ 1.15.
3/2/09 Buy 1 Mar 17.5 Put @ 2.05.
Loss of $90.
This was a rocky road for me. I was anxious to make a trade and the 3x Energy ETF had such high premiums for being so far Out of The Money (OTM). The problem is since its 3x, there are huge swings, and I'm not able (yet) to handle them. I need to be able to set price targets for this ETF over a period of time and stick to a plan about how to handle it. When I bought it to close, I had visions of ERX dropping to 10 and crushing my portfolio. This would've ultimately ended OTM, but I didn't want to take put my portfolio at risk any further.
XSP
2/23/09 Sell 1 Mar 61 Put @ .51.
Expired Worthless.
Gain of $51.
I sold this 18% OTM, "How could the market drop 18% in a month? It's free money!" So maybe I didn't think exactly that, but it was close. The S&P actually hit 666 (putting XSP at 66) at its low for the year. I can't say I was ever worried about this trade, but it certainly was a rocky month for the S&P. I like XSP and will probably continue trading it in the future, as deep OTM puts in this market are fetching high prices do to the high volatitlity of the times.
DIG
3/6/09 Sell 2 Mar 14 Puts @ .2.
Expired Worthless
Gain of $40.
Looking to make up a gain from the ERX loss I target another energy ETF and put this trade on. If I would've looked at a one minute chart before trading this, I would've made a way better decision on the timing of the trade. Also to keep in mind, when you deal with options that are deep OTM and have low prices, it's hard to close them early. In this trade for example, the Mar 14 Puts had an Ask of .1 up until the end.
I also closed PCLN (see previous post) this month for a gain, and am looking for another April option to trade . XME, DIG, USO, and things in Precious Metals/Oil are looking good for a trade.
Trade Exited: Bought PCLN Apr 55 Put
Yesterday I closed my PCLN position for a $40 profit. The whole market is looking weak and I don't want to have too many open positions right now. At around 10 am, PCLN was around 78.3 and my order to Buy 1 PCLN Apr 55 @ $.30 hit.
I originally opened this position March 12th, when I sold it at $.70. The margin requirement was $600. So my actual return on margin was 40/600 or 6.7%. Annualized return was 94.74%. The strike was still almost 30% OTM when I bought to close and probably would've expired worthless, but I'm happy to book some profits in this market.
I originally opened this position March 12th, when I sold it at $.70. The margin requirement was $600. So my actual return on margin was 40/600 or 6.7%. Annualized return was 94.74%. The strike was still almost 30% OTM when I bought to close and probably would've expired worthless, but I'm happy to book some profits in this market.
Wednesday, March 18, 2009
Trade Entered: Sold FSLR 70 Put
Today around 10:30ish I sold to open 1 FSLR April 70 put for $.70 and received $67.05 after commissions. FSLR has had a rocky road lately, and I decided to capitalize after it took a beating yesterday. When I sold this, FSLR was at 117.05, which means the 70 is 40.2% OTM. The margin requirement is $762.50 and if this expires worthless in April, the ROM is 9.18%, and 64.45% annualized.
Time value will kick in soon, as long as FSLR doesn't tank beyond all reason.
The market is surging lately and I'm actually not sure what to do. Going long on a strong stock is obvious, but I'm not sure what to pick. Oh well, maybe I'll figure something out.
Time value will kick in soon, as long as FSLR doesn't tank beyond all reason.
The market is surging lately and I'm actually not sure what to do. Going long on a strong stock is obvious, but I'm not sure what to pick. Oh well, maybe I'll figure something out.
Monday, March 16, 2009
Trade Entered: Bought June 12 SSO Put
Needing some portfolio protection, especially in this market. I bought to open 1 June 12 SSO Put for $.55 and paid $57.95 after commissions. I'm not sure how much protection this will offer me, or how good it will fare against another market downturn, but an imperfect hedge is better than none at all.
I placed the $.55 order around 10 am, and it filled about an hour later. The market was really range bound at this point, and I didn't think this would get filled today. I'm glad it did as the S&P finished down a little on the day and I needed to grab at least a little protection as I look for another April option to trade on.
My XSP 61 and DIG 14 puts are about to expire worthless. Those will be my first profitable trades. Hope I didn't just jinx them...
I placed the $.55 order around 10 am, and it filled about an hour later. The market was really range bound at this point, and I didn't think this would get filled today. I'm glad it did as the S&P finished down a little on the day and I needed to grab at least a little protection as I look for another April option to trade on.
My XSP 61 and DIG 14 puts are about to expire worthless. Those will be my first profitable trades. Hope I didn't just jinx them...
Thursday, March 12, 2009
Trade Entered: Sold Apr 55 PCLN Put
Today around 10 am I sold to open 1 Apr 55 PCLN Put for $.70 and received $67.05 after commisions. I'm actually bullish on Priceline but decided to sell a put 30% OTM for safety in this market as it closed today at 78.10 . PCLN has shown good technical strength lately and bounced off its 50% fibonacci retracement yesterday when it closed down about 7%. If the market continues to rally I may even close this early and take the profits.
For this trade the margin requirement is $600 and the ROM (Return on Margin) (70/600) is 11.7% and there are 37 days til expiration.
Let's hope the bulls don't abandon their positions for the weekend tomorrow, that could get ugly.
For this trade the margin requirement is $600 and the ROM (Return on Margin) (70/600) is 11.7% and there are 37 days til expiration.
Let's hope the bulls don't abandon their positions for the weekend tomorrow, that could get ugly.
Friday, March 6, 2009
Trade Entered: Sold Mar 14 DIG Put
Today around 10:15 I sold to open 2 March 14 DIG puts for $.20. After commisions I received $34.10 after commissions. Oil has been improving lately and motorists are using more gasoline now then this time a year ago. At close DIG closed at 18.18, up with the rest of the market . That puts me 23% Out of the Money. There's 2 weeks til options expiration, and these are decently out of the way.
I'm a little disappointed in myself on this trade though. I got impatient with sitting on the sidelines and decided this would be a good trade. I think this will finish OTM, but if I had waited until later in the day, the premiums had gotten as high as .45, which would've been significantly more then what I received. Lesson Learned.
I'm a little disappointed in myself on this trade though. I got impatient with sitting on the sidelines and decided this would be a good trade. I think this will finish OTM, but if I had waited until later in the day, the premiums had gotten as high as .45, which would've been significantly more then what I received. Lesson Learned.
Monday, March 2, 2009
Trade Exited: Buy ERX 17.5 Put
What a calamitous day in the market, I couldn't take the heat and bailed on my ERX position.
When the S&P was near 71.32, and ERX was at 18.79, I bought to close 1 ERX Mar 17.5 put @ 2.05. I paid $207.95 after commissions. Without commisions that creates a loss of $90, and $95.90 with commissions. I originally sold to open ERX at 1.15.
I've learned a lot from this trade(see image below). For Example, I absolutely fought the overall trend of the market and of the ETF. I should've waited for ERX to hold at an obvious support line, before making this decision. Although I may have been fooled by about a week (it held over 22 for about a week) I would have at least had a reason for entering the position. Lately Energy and the S&P have been hand in hand, that should've alerted me that for the short term this would hold true and it has for the length of the trade.
I honestly though of bailing on Friday because the swings on ERX are so high, but though I could handle them. I can't, and this new trader won't be trying any 3x leveraged ETFs anymore.
We'll see what happens with my XSP trade, it seemed so safe a few days ago, of course, that was before the whole market fell apart. Let's hope there are enough pieces to keep it over 610.
When the S&P was near 71.32, and ERX was at 18.79, I bought to close 1 ERX Mar 17.5 put @ 2.05. I paid $207.95 after commissions. Without commisions that creates a loss of $90, and $95.90 with commissions. I originally sold to open ERX at 1.15.
I've learned a lot from this trade(see image below). For Example, I absolutely fought the overall trend of the market and of the ETF. I should've waited for ERX to hold at an obvious support line, before making this decision. Although I may have been fooled by about a week (it held over 22 for about a week) I would have at least had a reason for entering the position. Lately Energy and the S&P have been hand in hand, that should've alerted me that for the short term this would hold true and it has for the length of the trade.
I honestly though of bailing on Friday because the swings on ERX are so high, but though I could handle them. I can't, and this new trader won't be trying any 3x leveraged ETFs anymore.
We'll see what happens with my XSP trade, it seemed so safe a few days ago, of course, that was before the whole market fell apart. Let's hope there are enough pieces to keep it over 610.
Sunday, March 1, 2009
Monthly Update for February
I plan to do a monthly update of my account and trades, so here's the first one.
Beginning Cash: $6,000
Current Cash: $6,160.09
Income for month: $160.09
Commissions Paid during month: (2.95 x 2) = $5.90
Open Positions: 2, ERX 17.5 and XSP 61
Reserve Requirement (75% of strikes): 5887.5
- ERX -
Current Price: 22.43
Strike: 17.5
OTM: 22%
Days til Expiriation: 19
Notes: It's a highly volatile 3x leveraged ETF. I'm only 22% out of the money, which isn't much considering the one week I've held this stock, it's moved up or down 10% on three days. I'll be watching the position on Monday, if the market as a whole looks week, I'll be dumping it. At the current Ask, I'd make about $9 for the month.
- XSP -
Current Price: 73.73
Strike: 61
OTM: 17.3%
Days til Expiriation: 18
Notes: This is a mini of SPX, which is the option that follows the S&P 500. It's also European so trading stops on the Thursday before expiration. The S&P would have to drop 17.3% in 18 days for me to lose on this trade. That would be about 1% a day. I'm not worried about this trade (at this time) and will probably let it expire. I am however disappointed in how much of my reserves its taking up. Since its a 61 strike, that's requiring a lot of reserve capital. I may trade this in the future for the relative safety of it, but the reserves are high so I may try some other options.
I'll just be watching the markets for the next few days before determining what to do for next month. It's been so volatile lately that no position seems secure. I'm glad I get to be trading at this point in time. I'll get to learn the hard way.
Beginning Cash: $6,000
Current Cash: $6,160.09
Income for month: $160.09
Commissions Paid during month: (2.95 x 2) = $5.90
Open Positions: 2, ERX 17.5 and XSP 61
Reserve Requirement (75% of strikes): 5887.5
- ERX -
Current Price: 22.43
Strike: 17.5
OTM: 22%
Days til Expiriation: 19
Notes: It's a highly volatile 3x leveraged ETF. I'm only 22% out of the money, which isn't much considering the one week I've held this stock, it's moved up or down 10% on three days. I'll be watching the position on Monday, if the market as a whole looks week, I'll be dumping it. At the current Ask, I'd make about $9 for the month.
- XSP -
Current Price: 73.73
Strike: 61
OTM: 17.3%
Days til Expiriation: 18
Notes: This is a mini of SPX, which is the option that follows the S&P 500. It's also European so trading stops on the Thursday before expiration. The S&P would have to drop 17.3% in 18 days for me to lose on this trade. That would be about 1% a day. I'm not worried about this trade (at this time) and will probably let it expire. I am however disappointed in how much of my reserves its taking up. Since its a 61 strike, that's requiring a lot of reserve capital. I may trade this in the future for the relative safety of it, but the reserves are high so I may try some other options.
I'll just be watching the markets for the next few days before determining what to do for next month. It's been so volatile lately that no position seems secure. I'm glad I get to be trading at this point in time. I'll get to learn the hard way.
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