April SPX Bear Call Spread - some damage control

Today I closed the SPX 1580/1585 Bear Call Spread for 1.15 debit. This spread was originally entered for 0.45 credit and 4 contracts per leg. So, it is a loss of 0.70 * 4 = $280. Normally, I wouldn't have closed this spread. But as I'm flying to Cuba, with zero connectivity down there, it was a necessity to do some damage control here.

At the same time I entered a Bull Put Spread, also using April options. Strike Prices 1445/1440 for 0.30 credit.


Check out Track Record for 2013

Related Articles:
Weekend Portfolio Analysis (04-07-2013)
Weekend Portfolio Analysis (04-13-2013) 

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Guide to Iron Condors

Hey Folks,
Just wanted to let you know that you can download the BullShit Free Guide to Iron Condors for free today at Amazon. I had the opportunity to read this material when my good friend Gavin from OptionsTradingIQ was writing it (Thanks for the opportunity pal if you're reading this). I think it is an excellent read if you're interested in Credit Spreads + Iron Condors trading. It will give you insights on how an experienced trader trades this strategy, parameters he uses to get in, to get out, when and how to adjust etc.

Weekend Portfolio Analysis (03-16-2013)

March expiration is finally in the past and although it wasn't what I wanted in terms of results, I can't say I did bad. Considering the low volatility and the cheap prices of options plus the fact that the market has been going up non stop, the only fact of surviving the month and not having a negative return is in my humble opinion quite an achievement. More importantly, I got to finally stop the bleeding of January + February.

Useful resources for learning about mechanical trading systems

When you get started in the journey of currency trading (specifically the spot Forex markets) you read about all the "benefits" of Forex over any other trading vehicle. Over time, you get to realize that these supposed "benefits" are really a pain in the ass, and that they don't offer any particular edge.

Handling SPX Positions. Managing a threatened Iron Condor, plus taking profit on a Bull Put spread.

The Call side of the March 1445/1450/1560/1565 Iron Condor in SPX was closed today for 1.30 debit. This spread was originally opened for a credit of 0.35, so the final balance on this 1560/1565 Bear Call spread is a 0.95 loss (or -$475 for 5 contracts per leg). I remember when the trade was initially opened I thought this 1560 would be impossible for the SPX index in a month, but there you have it, we're pretty close to that value.

Weekend Portfolio Analysis (03-10-2013)

This week SPX went from 1518.20 to 1551.18 for a +2.17% gain. This rally keeps defying the most skeptics out there, and boy oh boy,....this sustained trend is the most feared enemy of Iron Condor traders, credit spread traders and contrarian traders in general. How far can this thing go? I wish I knew folks. I wish I knew.

Covered Call vs Buy and Hold. Performance comparison.

Some time ago, I wrote an article about a simple strategy that beats most traders. The article was about the fact that with the historical upside bias of the markets, plus the fact that 90% of traders lose money and 75% of money managers can't beat the S&P500, then by simply going long shares of SPY you would be better off than the majority of traders (including the so called professionals). You would basically track the performance of the S&P500. You would also receive a dividend from owning the shares and you wouldn't pay the whole spectrum of ridiculous fees that most funds impose for their under-performance (Early Redemption Fees, Deferred Sales Charges, Performance Fees, Maintenance fees etc).

Weekend Portfolio Analysis (03-01-2013)

Folks, March has just begun and it is traditionally a Bullish month. According to Moneychimp, from 1950 to 2012 we have had 40 positive Marchs and 23 negative ones and the average return has been +1.07% (considering the negative months in this calculation). Historically speaking that makes March the fourth strongest month of the year behind December, November and April. The typical negative March has mostly been between -1% and -4%. In only one occasion the return was bellow -7% which was an isolated -10.18% occurrence in 1980. I'm not suddenly bullish. Merely suggesting that market crashes in March are unlikely according to past history. Obviously anything can happen.