Whats going on?? We talk about how trade options. Would you love to learn how we do that?? Let's take a look!
Faith leads to optimism, which can lead to achievement. Without hope and confidence, nothing can be done.”
Whaddup?! It's me. I hope your trading has been going good, because mine has sucked! As usual, let's look at the trades I placed this week.
I made three trades in week 22-using the securities $FXE, $BIDU, and $BBY. $BIDU & $BBY trades were made and filled on June 1st, where $FXE was filled on May 29th.
In $FXE, two contracts were sold making these credit call spreads. I sold the 112 strike calls and bought the 113(-112x/113) calls for a net credit of 60 cents($60). Observing the chart, there is an apparent downtrend with this stock. Not much information as to why FXE is going down, I can simply see that it is.
For $bidu, I built a simple put credit spread below the market. For the trade-sold the 242.5 strikes puts and bought the 240 puts. I need to my portfolio balanced, as always. When your options positions add up to either +/- 200 delta, your portfolio is balanced. Why do this? That is how we can keep the overall portfolio from being too skewed in one direction(up or down). We would really like to have small trades placed all around the market, being as neutral in our portfolio as possible.
Last but not least, I placed debit call spread with this stock. I bought the 67.5 calls and sold 70 calls(67.5/-70x). With the portfolio needing some bullish exposure, a debit spread was a much needed trade. The stock prices were cheapest then, so buying contracts instead of selling seemed smarter.
Delta=-53 WHOA! This is way too bearish of a portfolio delta, which is part of the reason I made a directional long call spread with $BBY. I need some upward exposure for my portfolio.
What's Happened(So Far)
Losing trades first.
-Winners briefly and quickly
In the previous post, I mentioned that this stock looked like it was starting a downtrend. However, trump tariffs were announced, and it made the stock rebound a bit. This was a losing trade, losing about .54/ contract, with two contracts being sold originally. The trade was closed on 13 June 18. We take our loss and keep moving forward, right?
And another one(DJ Khaled voice)! Closed out for a loss on 13/6/2018 The two contracts were sold at .30/contract and was bought back at .69/contract. I know exactly why this trade didn’t work:time. I had placed the trade on 29 May 2018, and the expiration date for the contracts were 15 June 2018. Although I do like to play weekly options on SOME securities, this was not the right one to play. If my expiration time for the options were chosen differently, I could've been further away from the stock price and possibly made money.
So happy to close a winning trade. When you have a few losers in a row, it’ll discourage you and make you feel like you don’t know what you’re doing. Profit was taken within 3 days after the trade was placed. I ended up winning .30 for this play.BBY
Two wins in a row! Trade was closed on 7/6/2018 The price closed was 1.75/contract, after being bought and opened at 1.31/contract.
Ok week, I guess. The $FXE credit spread would’ve went better if more time was given, the directional assumption, however, was correct. So, that goes into my first point, I need to give myself more time and a longer time for expiration.
Portfollio B-weight is way too bearish. I’d rather take a loss on the original shares bought, and make my portfolio balanced then continue to lose money on the bad trade. I’m a bit over my head, cause If I were to need coverage for a trade, I barely have any funds to cover a losing trade. The market and circumstances are forcing my hand.
I need to analyze my trades on the "analyze" tab of ToS more.
-Need to use longer expiration dates for my trades.
Two simple improvements, could help. With not having a big money account, I need to time the market better.
Do you want to see my previous trades, within a trade journal spreadsheet?! I’m working on getting my email account setup, so bare with me. Take a look.
Gimme some feedback, will ya?