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Old 12-15-2015, 01:41 PM   #346
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Just sold that Put vertical I bought the other day for about a $120 profit...my delta dropped to under -10 just now on this current run up, and selling the vertical brought my delta up to about -2.5...I'll happily book profits to get my position back in line any day of the week...

Boxscore and current graph:

Code:
Date		Time		Trade Description						Fees	Comm	Amount
12/4/15		10:13:01	BOT +3 BUTTERFLY RUT 100 JAN 16 1200/1150/1100 PUT @10.70	-0.40	-18.99	-3,210.00
		10:13:15	BOT +3 IWM 100 JAN 16 109 CALL @8.62 BOX			-0.10	-12.24	-2,586.00
12/9/15		12:53:47	BOT +1 VERTICAL RUT 100 JAN 16 1170/1160 PUT @5.55 CBOE		-0.08	-11.49	-555.00
12/11/15	12:10:29	SOLD -3 BUTTERFLY RUT 100 JAN 16 1200/1150/1100 PUT @14.58 CBOE	-0.40	-18.99	4,374.00
		12:21:13	BOT +3 BUTTERFLY RUT 100 JAN 16 1170/1120/1070 PUT @12.68 CBOE	-0.40	-18.99	-3,804.00
12/15/15	12:38:02	SOLD -1 VERTICAL RUT 100 JAN 16 1170/1160 PUT @6.74 CBOE	-0.08	-11.49	674.00
My current estimated booked profit is a little over $1200...my current open position P/L is -930, putting me up close to $300 for the trade overall...with Fed announcement tomorrow, I'll certainly have to watch this closely...

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Old 12-16-2015, 04:28 PM   #347
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Just bought a RUT 1150/1160 call vertical as my delta was down to -12...brought it back up to around a more manageable -5 or so...will post details a little later...
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Old 12-16-2015, 05:37 PM   #348
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OK, so here is where we stand. I have already booked a profit of $1,221.08 including commissions. I have $82.08 in commissions outstanding in my open position below, and I currently have a loss of $1,031.58 (this number does not include the $82.08 in commissions) in my open position, putting me at net positive of a whopping +$107.42 at the moment overall.

I am trying to manage this trade to the letter this month, even though I suspect my adjustments so far aren't anywhere near by the book...lol

I operate from a very basic perspective of the rules of this trade and more often than not improvise from there.

Current trade log:

Code:
Date		Time		Trade Description						Fees	Comm	Amount
12/4/15		10:13:01	BOT +3 BUTTERFLY RUT 100 JAN 16 1200/1150/1100 PUT @10.70	-0.40	-18.99	-3,210.00
		10:13:15	BOT +3 IWM 100 JAN 16 109 CALL @8.62 BOX			-0.10	-12.24	-2,586.00
12/9/15		12:53:47	BOT +1 VERTICAL RUT 100 JAN 16 1170/1160 PUT @5.55 CBOE		-0.08	-11.49	-555.00
12/11/15	12:10:29	SOLD -3 BUTTERFLY RUT 100 JAN 16 1200/1150/1100 PUT @14.58 CBOE	-0.40	-18.99	4,374.00
		12:21:13	BOT +3 BUTTERFLY RUT 100 JAN 16 1170/1120/1070 PUT @12.68 CBOE	-0.40	-18.99	-3,804.00
12/15/15	12:38:02	SOLD -1 VERTICAL RUT 100 JAN 16 1170/1160 PUT @6.74 CBOE	-0.08	-11.49	674.00
12/16/15	15:25:23	BOT +1 VERTICAL RUT 100 JAN 16 1150/1160 CALL @5.00 CBOE	-0.08	-11.49	-500.00
Graph:

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Last edited by PaceAdvantage; 12-16-2015 at 05:44 PM.
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Old 12-20-2015, 11:31 PM   #349
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On Friday, I sold that Call RUT vertical I bought on Wednesday for about a $200 loss...lol...this has to be the most adjusted position I've ever had while posting here...details:

Code:
Date		Time		Trade Description						Fees	Comm	Amount
12/4/15		10:13:01	BOT +3 BUTTERFLY RUT 100 JAN 16 1200/1150/1100 PUT @10.70	-0.40	-18.99	-3,210.00
		10:13:15	BOT +3 IWM 100 JAN 16 109 CALL @8.62 BOX			-0.10	-12.24	-2,586.00
12/9/15		12:53:47	BOT +1 VERTICAL RUT 100 JAN 16 1170/1160 PUT @5.55 CBOE		-0.08	-11.49	-555.00
12/11/15	12:10:29	SOLD -3 BUTTERFLY RUT 100 JAN 16 1200/1150/1100 PUT @14.58 CBOE	-0.40	-18.99	4,374.00
		12:21:13	BOT +3 BUTTERFLY RUT 100 JAN 16 1170/1120/1070 PUT @12.68 CBOE	-0.40	-18.99	-3,804.00
12/15/15	12:38:02	SOLD -1 VERTICAL RUT 100 JAN 16 1170/1160 PUT @6.74 CBOE	-0.08	-11.49	674.00
12/16/15	15:25:23	BOT +1 VERTICAL RUT 100 JAN 16 1150/1160 CALL @5.00 CBOE	-0.08	-11.49	-500.00
12/18/15	12:38:51	SOLD -1 VERTICAL RUT 100 JAN 16 1150/1160 CALL @3.10 CBOE	-0.08	-11.49	310.00
So the bottom line is that I have booked a $1007.94 profit (including commissions) and my current open position is down $263. Meaning I am now running a profit of about $700 - about halfway to my goal.

The unfortunate part is that I sold that Call Vertical in order to get my delta back in line, but as you can see, I sold it a little after 12:30 in the afternoon, but by the end of the day, as the market continued to slide, my delta settled at 12.25. Any further weakness will necessitate further adjustment...perhaps...this week is supposed to be "exit week" for this trade, as my 20 days till expiration rule arrives at the end of this week, and with no trading on Friday because of Christmas, I'll be looking to get out on Wednesday or Thursday. So really, there isn't much time for any adjustments to be made.

Graph:

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Last edited by PaceAdvantage; 12-20-2015 at 11:32 PM.
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Old 12-25-2015, 01:17 AM   #350
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I completely blew this final trade of the year. Rode out my remaining position until the bitter end, watching the market slowly and methodically climb against me and most of the profit I had realized along the way...ultimately cried uncle near the final hour of today's abbreviated holiday session and eeked out a small gain for the final month. But more importantly, I won 11 of the 12 trades I made using this method in 2015, despite trading way below my standards in terms of proficiency. Again, I love how truly forgiving this trade is towards the kind of stupidity I continue to impose upon myself.

Boxscore for final trade of the year:
Code:
Date		Time		Trade Description						Fees	Comm	Amount
12/4/15		10:13:01	BOT +3 BUTTERFLY RUT 100 JAN 16 1200/1150/1100 PUT @10.70	-0.40	-18.99	-3,210.00
		10:13:15	BOT +3 IWM 100 JAN 16 109 CALL @8.62 BOX			-0.10	-12.24	-2,586.00
12/9/15		12:53:47	BOT +1 VERTICAL RUT 100 JAN 16 1170/1160 PUT @5.55 CBOE		-0.08	-11.49	-555.00
12/11/15	12:10:29	SOLD -3 BUTTERFLY RUT 100 JAN 16 1200/1150/1100 PUT @14.58 CBOE	-0.40	-18.99	4,374.00
		12:21:13	BOT +3 BUTTERFLY RUT 100 JAN 16 1170/1120/1070 PUT @12.68 CBOE	-0.40	-18.99	-3,804.00
12/15/15	12:38:02	SOLD -1 VERTICAL RUT 100 JAN 16 1170/1160 PUT @6.74 CBOE	-0.08	-11.49	674.00
12/16/15	15:25:23	BOT +1 VERTICAL RUT 100 JAN 16 1150/1160 CALL @5.00 CBOE	-0.08	-11.49	-500.00
12/18/15	12:38:51	SOLD -1 VERTICAL RUT 100 JAN 16 1150/1160 CALL @3.10 CBOE	-0.08	-11.49	310.00
12/24/15	11:51:42	SOLD -3 BUTTERFLY RUT 100 JAN 16 1170/1120/1070 PUT @13.10 CBOE	-0.40	-18.99	3,930.00
		11:52:02	SOLD -1 IWM 100 JAN 16 109 CALL @5.93 BOX			-0.06	-0.75	593.00
		11:52:02	SOLD -2 IWM 100 JAN 16 109 CALL @5.93 BOX			-0.11	-11.49	1,186.00
											--------------------------------
														+263.41
Since there wasn't much interest in this thread overall (leekaufman, where did you go?), I've decided not to publicly track my 2016 trades. But I would love to continue to discuss the M3 method with anyone who is interested and especially if you are willing to offer some pointers that I could no doubt use.

PaceAdvantage M3 Trading Tour 2015
________________________________
January........+755.51
February.......-359.98
March..........+239.98
April............+795.25
May.............+1,201.32
June............+337.73
July.............+1,458.44
August.........+441.16
September...+1,226.53
October.......+287.44
November....+839.47
December....+263.41
-----------------------------
Final Total: +$7,486.26
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Old 12-26-2015, 06:16 PM   #351
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Mike-

I haven't often, if ever, posted in threads related to trading strategies. Trading isn't what I do and I haven't wanted to comment on something where my understanding is limited.

I have, nonetheless, been an avid reader. I understand this takes effort on your part and if you aren't getting much out of it, you should stop.

But I did want to at least express my gratitude for the education your short essays on an obscure corner in a minor eddy of the river of investments provided.

Here's hoping for your continued success.
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Old 12-27-2015, 02:03 AM   #352
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M3

Pace, sorry for having disappeared. I'll be on sabbatical in Mexico for 3-4 months starting in a week and will have a lot more time to focus on trading. And I'll reconnect soon with thoughts about your trading.

PS Feel free to connect with me directly: lee@leekaufman.com.
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Old 02-09-2018, 04:17 AM   #353
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PA and Barn, I really want to thank you for sharing your experience with m3 trade.
For me it has been extremely instructive to follow your trades.
I'd like to know how was your trading in the last two years.
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Old 02-09-2018, 07:34 PM   #354
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Hi mrsimo...welcome to the board.

Believe it or not, I quit trading this M3 system after 2016. It went nowhere for me the entire year. I don't remember exactly how I did...but it wasn't much either way. Pretty sure I ended up losing about a grand for the year.

I was getting nowhere near the results I had achieved in 2014 & 2015.

I made some pretty good strides in automating an ES futures trading method I was developing, and I've been trading that for the past two years exclusively.

Not sure whether it was me who let the M3 down or vice versa, but I soured on it pretty good and decided to move onto greener pastures. I may revisit it one day...I really could never figure out why it just seemed to "stop working" in 2016, as the market itself didn't really change.

It really was the weirdest experience watching month after month going basically nowhere in the end...I'm sure I was doing something wrong, but never could figure out what it was.
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Old 02-10-2018, 11:13 AM   #355
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I'm sorry about the poor results. Do you think this could be due to the strong uptrend market in 2016 which has put the neutral delta strategy into difficulties and has required numerous adjustments?
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Old 02-10-2018, 11:44 AM   #356
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Quote:
Originally Posted by mrsimo View Post
I'm sorry about the poor results. Do you think this could be due to the strong uptrend market in 2016 which has put the neutral delta strategy into difficulties and has required numerous adjustments?
In my view, the market was pretty much in a strong uptrend since it bottomed out after the 2008 dive...so not sure how much 2016 differed from 2014 and 2015 in that regard...what do you think?
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Old 02-10-2018, 11:46 AM   #357
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Keep in mind, I was using the basic version of the M3 method...it had been enhanced and expanded since I believe...but I never doled out the money to get the full, updated method. I'm sure there are plenty of things I am not doing that I should be doing that might have given me better results.

One day, I plan to revisit it and maybe pay John Locke for the full monty...
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Old 02-10-2018, 04:43 PM   #358
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Consider that I've started to study the M3 few months ago and this thread represent one of the best free resources I've found on the web.

But, I can make some considerations on the basis of the underlying price (RUT) from 2014 to end 2016.



2014: This was the best period, during the year the price range was 100 points (1100-1200) that is the optimal scenario for an M3 with 50-points wings. The market was no-trending and it was easier to have the price under the tent.

2015: the market range was 200 points (1100-1300) but, except for the downturn in July, the average monthly range (holding period of an M3) was less than 100 points which lead to a profitable scenario.

2016: the market range was 450 points (950-1400) with a strong up-trend every month; in this scenario the price easily moved over the upper wing of the butterfly requiring multiple adjustments; moreover, the lower volatility that characterizes an up-trending market decreased the premiums (hence lower return/risk).

What is your thought?

It would be interesting to find efficient ways to handle these situations.

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Old 02-10-2018, 05:00 PM   #359
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mrsimo, you make excellent points, ones I should have already known about.

I was just getting my feet wet in options when I ran across the M3...I took the basic mechanics of the trade as I could find them, then started to apply them, really not knowing what I SHOULD know while doing this...

You explain quite nicely why I ran into trouble in 2016. And I think John Locke provides all sorts of ways to deal with an environment like that if you buy the complete method.

From what I was able to accomplish with the M3 while it was running good, I have no doubt his more complete M3 methodology would do even better.

I would have no qualms paying the guy $700 (I think that was the going rate last time I checked), but I just don't feel motivated enough to go back to options at the moment...

Did you purchase the method of JL? Or, like me, did you stumble across it in some obscure corner of the web, and then seek all the freely available info you could on the thing.
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Old 02-10-2018, 06:34 PM   #360
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Quote:
Originally Posted by PaceAdvantage View Post
mrsimo, you make excellent points, ones I should have already known about.

I was just getting my feet wet in options when I ran across the M3...I took the basic mechanics of the trade as I could find them, then started to apply them, really not knowing what I SHOULD know while doing this...

You explain quite nicely why I ran into trouble in 2016. And I think John Locke provides all sorts of ways to deal with an environment like that if you buy the complete method.

From what I was able to accomplish with the M3 while it was running good, I have no doubt his more complete M3 methodology would do even better.

I would have no qualms paying the guy $700 (I think that was the going rate last time I checked), but I just don't feel motivated enough to go back to options at the moment...

Did you purchase the method of JL? Or, like me, did you stumble across it in some obscure corner of the web, and then seek all the freely available info you could on the thing.
Unfortunately, I did not purchase the JL course (now the cost is more than doubled ).

I think today there is a lot of information available, learning the adjustments (and their purpose) one can finds the own ways to address the issues (backtesting the trade in OV accelerate the learning curve).

I found out the below adjustment (a baby butterfly) that might come in handy during strong up/down trend market (the graph is taken from a blog and the trade was taken during June 2016). The baby butterfly flats the t0 line but I have yet to figure out how it can be practically performed.

https://ibb.co/bCdVt7

BTW, Iím happy to bring forward the discussion and challenge this topic.

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