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Old 10-08-2014, 11:27 PM   #46
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Quote:
Originally Posted by barn32
I made the same trade, however my entry point was a few days later and in the middle of that -250 point Dow drop.
You made a similar trade, but not the same trade. And your max profit should be more than $446 at that point in time...it should probably be around $600 or more at 20 days from expiration...that's been my experience so far to date...
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Old 10-11-2014, 03:49 AM   #47
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My trade, while still in the black, is getting close to adjustment territory...Delta is climbing dangerously close to the 10.00 alarm, and price is heading down fast...

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Old 10-11-2014, 06:56 AM   #48
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Yout T+0 line has a bad downward slope to it on the downside, and you are more than 30 points below your short strike. My interpretation is that you roll down when you go 20 points past your short strike, which in your case is 1090.

The short strike in my position is 1060, and I'll be looking to roll down if it hits 1045-1040.

Off course there is always the chance I am looking at things incorrectly.
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Old 10-11-2014, 11:02 AM   #49
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You have a point. I guess since I've never had to deal with price heading towards my lower strike since I started trading this around January/February, I was incorrectly interpreting the directions to mean adjust once price went 20 points below the lower strike.

But, he also seemed to be very flexible in that regard...and since my position is still profitable and my delta hasn't hit 10 yet, I wasn't in any rush to adjust. But thank you for pointing out an error in my interpretation.

If the RUT opens 30 points down on monday or more, I bet i wish I had rolled earlier...lol Because if that happens, the position will be down around $300. Still not down enough to be stopped out at my $500 stop loss price, but sucky nonetheless.

Last edited by PaceAdvantage; 10-11-2014 at 11:03 AM.
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Old 10-11-2014, 01:13 PM   #50
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Quote:
Originally Posted by PaceAdvantage
You have a point. I guess since I've never had to deal with price heading towards my lower strike since I started trading this around January/February, I was incorrectly interpreting the directions to mean adjust once price went 20 points below the lower strike.

But, he also seemed to be very flexible in that regard...and since my position is still profitable and my delta hasn't hit 10 yet, I wasn't in any rush to adjust. But thank you for pointing out an error in my interpretation.

If the RUT opens 30 points down on monday or more, I bet i wish I had rolled earlier...lol Because if that happens, the position will be down around $300. Still not down enough to be stopped out at my $500 stop loss price, but sucky nonetheless.
If you look at your graph, your T+0 line is looks good to the upside. However, to protect against a move to the downside rolling down some time before that happens will have the effect of flattening out your T+0 line, and giving you more protection. Rolling, adding verticals, adding calls, selling puts etc. reduces profit, but that's why you allocate $5000 for the trade to begin with.

My trade has a maximum profit potential of about $3600 (at expiration) if it closes at my short strike (1060) and I don't do any hedging. But the fact that it probably won't close where you want it to, and you don't always wait until expiration to close, and that you might also do some hedging--reduces your profit.

And, what I'm beginning to realize, is that efficient (but very complicated) hedging will greatly improve your profits.

Delta is important but it's not the only consideration. Keeping your T+0 line flat is also important.

At this point in time that's my take on things anyway.
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Old 10-11-2014, 01:36 PM   #51
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Can't believe I made the mistake of misreading what he was doing to the downside...it's obvious looking at the graph, as you say, that the time to adjust is after it moves 20 points below short strike.

This might prove to be a costly lesson, but one I'm happy to learn...
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Old 10-13-2014, 11:12 AM   #52
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Well, I rolled down to a 1050 short strike. I sold my original position for about a $50 profit...so not feeling too bad about that...will put a chart up later.
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Old 10-13-2014, 04:31 PM   #53
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A snapshot of my new position at end of day after rolling down and taking small profit on initial position (my old positions still show at the bottom, albeit they are now all "zeroed" out in terms of quantity):

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Old 10-19-2014, 09:46 PM   #54
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Well well...if I hadn't seen barn's post correcting me of my misinterpretation, I would have been out long ago with my full profit on my November trade...but, I rolled down like I was supposed to, and I'm mired in the muck with this big move back up in the RUT...oh well...seriously though, I appreciate barn pointing out the error of my ways...it should serve me well in the long run....here's my graph...12 more days to go:

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Old 10-21-2014, 11:34 AM   #55
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Bad fills, poor execution, rookie mistakes, and two major moves forced me to adjust first down and then up. (I made two more mistakes this morning and bought calls in stead of puts .)

I got much better fills this time (thanks Mike)

My new position:
Long 1 1040 RUT put
Short 2 1090 RUT puts
Long 1 1140 RUT put

Long 1 105 IWM call

Short 7 108 IWM calls
Long 7 107 IWM calls

These are my Greeks:
delta -5.91
gamma -1.32
theta 175
vega -496.7

This is the chart of my position after I rolled it up 50 points this morning and added a 7 lot IWM vertical call at 107/108. I left my 1 105 IWM call alone.

As you can see I am under water and will have to have some good luck and hold to very close to expiration to make a profit.

And by the way, do I have any idea what I'm doing? No. I'm flying by the seat of my pants.

(Right click on image/view image)


Last edited by barn32; 10-21-2014 at 11:46 AM.
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Old 10-21-2014, 02:52 PM   #56
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For the curious, this is appx. what my position looked like before I rolled it up this morning. (Appx., because the RUT is up 15 points today.)

One of the main problems was that my theta was around zero and my vega was positive.


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Old 10-26-2014, 01:54 AM   #57
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Well, I'm violating the rules again...trade has moved more than 10 points past my upper strike, yet I did not adjust...and the "exit at 20 days to expiration" is this Friday. So, it seems I'm in this trade till I either hit my $500 stop loss, or it turns around on me...I'm not convinced this market is going to continue upwards...here's the not so pretty snapshot:

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Old 10-26-2014, 06:42 PM   #58
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This is my trade for December that I put on last Friday with 56 days to expiration.

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Old 10-29-2014, 11:15 AM   #59
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Rolled up 40 points yet again.

Old position, which was hopeless:



New position, which has some promise:



This could be foolish, but I'm walking a tightrope now. I'll have to hold on dangerously close to expiration, and perhaps do some fancy footwork along the way to extract any kind of profit. (If I can even make a profit.)

I'll just have to wait and see.
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Old 10-29-2014, 11:43 AM   #60
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I opened a December position yesterday, and am still holding November (which is getting turded...although I'm only down $200-$250 overall on that trade)...

I'll post up some graphs later
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