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marktheshark
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Everything posted by marktheshark
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Actually, I've continued to learn, grow and become profitable as a Trader. The experience of being down to almost nothing and coming back was truly an ordeal - one which I do not intend on re-living. Please excuse the exhiliration in my original post. I'm sure you would understand if you've had a similar experience. Mark
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I was literally down to my last $128 in my trading account. Wifey said no more money was going in. Talk about a reason to focus! Well, then something happened. I have rattled off a string of wins and my account is now up 64% (before commisions) in 33 days. My confidence is back! I know this amount of money is small potatoes. However, if I can continue to make anywhere close to these gains on a consistent basis, then . . . . . Easy Street, Baby!
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Thank you Siuya for your thorough analysis. Of course, the risks associated with short options cannot be understated. The small amount of premium collected is paltry compared to the huge leverage working against them at an increasingly steep rate as expiration approaches. An additional risk in this position is the positive vega. It loses money when volatility drops. In fact, in retrospect it should have been set with positive delta to offset any drop in volatility - an occurrence generally associated with a rise in price in this particular instrument. That being said, as long as the risks are managed this appears to be a viable short-term position in a low volatility envorinment using European style options (exercise at expiration). Rolling or closing before the shorts expire would appear to be the proper follow up trade. mark
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Here is a risk chart of the position. I neglected to include that I am long a few near term calls just in case the price moves up quickly.
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Thank you for your observations and analysis. I agree I will need to see how this position develops and unwinds before drawing any solid conclusions. It is an actual live position, not just theory, but perhaps it is a fluke based on skewed prices or fills. I do see that the gamma will eventally turn to negative as the near term shorts expire. I guess the goal will be, depending on market conditions, to hedge as this occurs or take profit from the positive theta and close. mark
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I recently opened an ITM put calendar spread. I am long a few more puts than I am short, creating negative delta. Of course, I am positive theta. However, To my surprise I am also positive gamma. Essentially, I have no risk to the downside and, if the underlying moves up, the positive theta should cover me. I am positive vega so there is volatility risk if the underlying moves up, but I believe this is manageable in this market environment. Has anyone else experienced this? Almost all gurus out there profess that if theta is positive, gamma must be negative. Obviously either they are missing something or I am. Any comments would be appreciated. Thanks
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Stress - the Root of All Bad Trading?
marktheshark replied to TheNegotiator's topic in Trading Psychology
We are wired to have emotional responses to events which do not fit with our anticipation of what should happen. An unexpected traffic jam, for example, can cause frustration and anger. A surprise birthday party can casue exhilaration. In trading, the only thing that is constant and reliable is the uncertainty itself. It thus inherently causes emotional reponses all the time. There is no question in my mind that trading is one of the most stressful activities one can do. Recognizing and appreciating that uncertainty is simply part of the game is a major step in the development of a trader. mark -
Introduce Yourself Here - Don't Be Shy!!
marktheshark replied to trading4life's topic in Beginners Forum
Hello everyone: I just started live trading (again) after studiously paper trading for over 2 years. I trade out of the money option spreads on the SPY ETF. These have a high winning percentage. The system does seem to work if I tightly control the high degree of risk. Also, it does not require extremely close monitoring, which fits my current situation as a full time employee in an unrelated business. I hope to eventually reach the point where I can live off of my trading. So far so good! I have found many of the posts in TL to be very helpful. There are nuggets of wisdom here which have positively influenced my thinking along the way. -
Discourse with Fellow Traders, Not Co-workers.
marktheshark replied to marktheshark's topic in Options
Thank you both for your advice. I won't initiate trading discussions with non-traders. If asked, I'll simply say something generic like "It's going fine". Overall, I'm appreciating more and more that trading is a uniquely individual experience. -
Hello Jazz. I, also, have been selling time premium on the weeklies. I look for trends in the SPY ETF and sell out of the money credit spreads when the market appears to be overbought or oversold. I usually sell a little bit earlier, perhaps with six or seven days remaining, as there is more time premium available. The key is not to get stuck with the short options moving into the money. This can cause a world of hurt. There are numerous adjustment strategies out there, but I prefer using position sizing and stops to avoid the risk. Happy trading!
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I've spent a lot of time and plain hard work developing an options trading strategy that actually performs. It is very gratifying to finally reach a point where I am confident I can make money trading options. Maybe someday I'll be able to quit the 9-5 routine and live off of passive income. Until recently, I have been sharing my trading travails with co-workers - people who know nothing about trading, let alone options. I have received some positive feedback, mainly in the form of philosophical analogies or simple supportive phrases such "very cool". Overall, however, there is a lack of true appreciation by non-traders of the struggles involved in starting a trading system. Often there is cynicism regarding the markets in general. Don't get me wrong - these are great people I work with. They just don't trade. Come to think of it, it is a little unfair of me to expect anything more. This is my first post in TL. It is simply an attempt to open lines of communication with fellow traders, rather than non-trading co-workers. Perhaps others have had a similar experience with non-trading co-workers and friends when trying to get a trading system off the ground?