Community post

[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.
Options

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.

Replies (11)

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):

Symbol: The underlying ticker symbol, usually stock or mutual fund, occasionally a full blow index. Like usually I'll trade SPY, the fund, as it is very liquid. I have traded SPX, the index, as it is larger but it isn't as liquid in trading. (I tend to use Google for ticker link but if you know of a more open-source feed I would use that?)
Exp: Expiration in month and day. I tend to trade the standard monthly contracts. Others will often trade weekly contracts. If there is big volume on weeklies I might consider those in the future.
DTE: Days 'till Expiration. I look more at this on entry. I get in with no shorter than 40 DTE or then look to the next month out.
Name: The type of position. Unfortunately, I've found there are several synonymous names for some positions. Outside of my statistical analysis, it seems to me we're in a bull('ish) market. (I'll make a post of short definitions on these.)
Strikes: The strike prices in the position. (For DIA above, I am long the 214 and short the 219, as a matched set)
Size: (S)mall, (M)edium, (L)arge. (From the DIA example, I have enough sets to put around 2.5%, 5%, or 10% of the portfolio at risk). Eventually, I'd rather get this down to 1%, 2% and 4%. The goal being Trade Small, Trade Often. I've found rolling the dice a lot gets me closer to the statistical model than just a few big trades.
Theta: Ya got me... This one is technical for sure. Theta is how much money will come out of an option for the day if the price didn't move. Tastytrade's Theta definition have some good videos below the prose. (Looks like this could be a separate post as well.)
Cost: What I paid for the position(per set). Plus being a credit, negative being a debit. Again, this is per share so it could be expressed 100x on some systems.
NetLiq: Net Liquidity. What the current quotes would give if I closed immediately. Also, per set and not 100x.
P/L Open: Profit/Loss on the position (Cost - NetLiq).
P/L Day: Profit/Loss on the day. (Maybe if I'm posting weekly this isn't that helpful.)
O/R/C: Open/Roll/Close or no change in the week.

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.