Trading Group 2 - October 31, 2017

Discussion in 'Round Table Presentations' started by status1, Nov 12, 2017.

  1. status1

    status1 Well-Known Member

    I watched this presentation and it looked interesting to me
    I di some of the trades that Rick showed
    I did the reverse road trip last year but I combined it with a BW condor and it worked out on a couple of trades but it doesn't work in a bull market

    I am also contemplating doing the Bull trade that he mentioned
    He used the JL rules but it wasn't clear if he actually placed that trade or was it just back tested
    I wanted to find out what day was it when the market went down or how many points did it go down on that day

    I was thinking of doing it biweekly and taking it off after one week or whenever it reached a good enough p/l and place a conditional order to get out a 2x the premium received

    I heard that Rick got 6k in premium and got out with 11k loss which seems like a lot but I think if he had continued placing those trades he would have made back his losses and even be ahead in this bull market

    I did just a 3 lot 30 wide for the nov 17 expiration and it was doing well until this past Wed. and it's still profitable at 1.3% after about a week and a half
    I think in this bull market it may be better to take small profits weekly than wait for a month or more to make the same amount or less
    I also have some flyes in that range so if the market comes down and take a loss on the bull I should be able to make a lot more on the flies
    Mark17 likes this.
  2. status1

    status1 Well-Known Member

    I just wanted to follow up on my weekly bull trade on SPX
    I got in on 11/2 with a 3 lot 30 wide with the 2500/2470 strikes for Nov 17th expiration
    Vix was 9.93 on that day and I got filled at $1.10 and SPX was at 2579
    By 11/8 I was up at $239 in P/L according to tos so that was about 2.6% in one week which is very good and I was planning to get out at that point and I placed a closing trade GTC to get out at 20 cent debit for the next day
    Unfortunately the SPX was not cooperating and went down 10 points so I was not filled
    Vix was up at 10.5 on that day and P/L was $157 which is still pretty good for one week
    On 11/14 SPX was down to 2578 from the highs but close to where I entered the trade but Vix was up at 11.59 and my P/L was at $255
    The next day on 11/15 SPX went down a lot intraday but finished at 2564 by the end of the day but somehow my order got filled around 10:40 and I was out with $270 profit or 246.56 after commissions so about 2.7% in 2 weeks which is a lot better than my flies that are barely making 2% in a month

    I would say that was more luck than a good trade but this weekly bull trade has a good profit potential I just have to be very selective on when and where to place the trade and also find a good exit point that would bring the most profit in the shortest amount of time At the same time I also have my monthly flies cooking on the back burner so if the weekly trade gets close to the shorts the flies would start to make more money
  3. Marcas

    Marcas Well-Known Member

    Pretty good trade Status1. I wouldn't call this a luck unless you didn't know what are you doing at entry. I agree with you, it is nice opportunistic trade you can practice alongside your butterflies. Thing one trading it must keep in mind _all the time_ is huge risk involved and necessity of tight risk control. How many of them did you put on so far?
  4. status1

    status1 Well-Known Member

    That was just my first one
    Yes it is definitely risky I am relying on the vix and the market moves to gauge the level of risk
    With vix around 9 and change and the market grinding higher or not moving much I figured it's relatively safe although that big drop on the 15th was kinda scary when vix shot up to 13 but it was just another buy the dip market so it quickly gained back what it lost and SPX is back to almost the same price level where I placed the trade but now with vix at 11.43 I am a little more hesitant at going back in

    I did not really have any hedge in place for the short vertical I was just relying on the market complacency and that is the biggest risk is when everyone panics and wants to sell at the same time fast If it was a slow sell off by the time it gets to my short strike the short strike would have lost a lot of it's value and could have got out with a profit
    Also by doing the trade at 15DTE I am relying on the faster decay
    The only hedge if you can call it that is my longer term flies which would not help if the market goes down and stays down until the put spread expires and than it goes back up after that
    So in that case I was planing to roll out the spread preferably for a credit to buy a little more time

    Normally if the flies work and some higher vix and some market movement in both directions I would not even think about putting on a put spread by itself but this year with the low vix and the market constantly going up with very few if any pullbacks and the flies having so small profits I could not find a good enough reason for not doing it
    Hopefully next year will be different and would not need to do it
  5. Mark17

    Mark17 Well-Known Member

    What's the idea behind the reverse road trip?

  6. status1

    status1 Well-Known Member

    The idea would be if the market stopped going up or started going down you would make a profit so that would work in a bear or sideways market and there is no need for hedges on the downside but it doesn't work in this bull market
    Mark17 likes this.

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