Weekend Portfolio Analysis (December 28, 2013)

Today I'm writing the last Weekend Portfolio Analysis of the year from the good old US. I thought, hey don't be such a workaholic and take a break, but I just couldn't avoid coming here and start typing stuff.

This week the first February 2014 position was initiated via RUT 1040/1045 Bull Put spread for 0.30  credit. I never sell put spreads when the market are going up, I prefer to do it on weakness but in this case I'm just playing with the seasonality numbers and the fact that January, specially the first few days of the month are historically very strong days.

Second $SPX Bear Call Spread of the January 2014 expiration cycle

I opened an SPX 1880/1885 Bear Call spread today for 0.50 credit

Filled on $SPX 1880/1885 January Credit Call spread for 0.50
— The Lazy Trader (@lazytrading) December 23, 2013

Analysis of Options trading results in 2013

2013 was not what I expected in terms of Options trading results. It wasn't bad, but it wasn't good either. The final number for the model portfolio is +12.22% versus +28% for the S&P 500 as I write this article (SPX is at 1818). Basically you could have purchased some shares of SPY at the beginning of the year and without watching the markets at all anymore, without making any additional trades nor spending anything else in commissions, you could have beaten my +12.22%. This is what proponents of index investing suggest. And I admit it makes sense. If 90 to 95% of traders lose money in the long run, and 75% of "professional" money managers can't beat the market year after year, then just follow an index and mimic its performance. You'll be better off than the majority out there.

Weekend Portfolio Analysis (December 21, 2013)

Well folks, yesterday was December 2013 expiration. There aren't any monthly December 2013 Options left in this universe anymore. 2013 is coming to an end. I still can't believe the year went by so fast. Man I'm getting old. 2013 is almost over and I'm still letting that idea sink in my brain.

Closed SPX 1880/1885 Bear Call Spread (January 2014 expiration)

Today I closed the Call side of the January 2014 SPX 1645/1650/1880/1885 Iron Condor

out of $SPX 1880/1885 January Bear Call spread for 0.15 debit. Net profit 0.45, with 30 days to expiration. Will reload on a market rebound
— The Lazy Trader (@lazytrading) December 17, 2013

Weekend Portfolio Analysis (December 14, 2013)

SPX fell -1.71% this week from 1806.21 down to 1775.32. A RUT 990/995 Bull Put spread position was entered when all the short term indicators were signaling oversold conditions, and things are currently looking pretty good in the portfolio.

January 2014, RUT Bull Put Spread

After 20 days without entering new trades, today I went into the fire again.

Entered $RUT Jan. 990/995 Credit Put spread for 0.30 credit.
— The Lazy Trader (@lazytrading) December 12, 2013

Options trading course - Adjustments, Risk Management and the Greeks

In the past three years several newsletters, brokers and "fake gurus" have offered to write an article on this blog in order to get visibility for themselves. So far, I have only agreed to a couple of them. Both are real traders, both with proven results and no BS advertisement, nor crazy profit claims. That's because I hate fake non-transparent traders and the financial media in general that only looks for readership in order to increase their advertisement dollars. So, after more than 3 years blogging and dozens of requests for affiliation or guest posts, only two have made the cut. OptionsTradingIQ is one of them, and the reason is because he is a real trader, with real results and an always appreciated no BS approach. Someone that I personally respect a lot for his exquisite risk management techniques. He has written a couple guest posts on this blog in the past which you can read here and here. If you like his thoroughness you may be interested in the following offer.

Weekend Portfolio Analysis (December 7, 2013)

SPX went from 1806.55 to 1805.09 ending up almost unchanged. At some point on Thursday I was inclined to sell an out of the money Bull Put spread but the market didn't fall to the oversold conditions I usually look for and I needed a little more. Had I sold a Bull Put spread with a 90% probability of success, but using RUT options, the short Put option would have been in the same neighborhood as the 1650 SPX short Put I already have in January. I don't like that concentration of risk in the same area of the spectrum. So, I waited for conditions to get more oversold and that never happened. Well, so be it. On the last two down swings (November 20 and December 5) the market hasn't reached truly oversold conditions, which reminds us over and over again, how strong and stubborn this trend has been all year long.

Checklist for trading Vertical Spreads (guest post by Dan from ThetaTrend.com)

I recently had a nice conversation with an experienced trader of Iron Condors and Vertical Spreads. Dan is also the author of ThetaTrend.com, a blog focused on Trend Following with Options. He aims to develop and share (for free) simple rules based systems for trading ETF's and Options. I went to his site and stumbled upon a clever style of trading and an always appreciated no BS approach to trading with total transparency. After just a couple emails I knew it would be great to have an article from him on this blog. It would definitely add value to this site while at the same time promote his work over there. I believe trading blogs like ThetaTrend.com are a specie in extinction, true gems that deserve recognition and visibility. Dan, from the confinements of this blog, The Lazy Trader salutes you! Keep up the amazing work pal!

Weekend Portfolio Analysis (November 30, 2013)

We had a pretty slow week as anticipated with Thanks Giving in the middle. SPX went from 1806.33 down to 1805.81. Almost unchanged which is great for options sellers as time decay does its work and positions are not threatened. We are now exactly 20 days away from December expiration and things are not looking bad at all in the model portfolio. But before that, let's take a look at the market internals.

Importing a Custom McClellan Oscillator into the ThinkOrSwim platform

If you've been following my trading for a while, you know my style is all based on identifying extreme market conditions (overbought/oversold) and selling out of the money Credit Spreads against the prevailing trend at that point. There are hundreds of indicators to identify these conditions, but I like to follow three specific ones which are: Stochastics, McClellan Oscillator and the Number of stocks above their 20 and 50 Day Moving Average.

Weekend Portfolio Analysis (November 23, 2013)

SPX went from 1798.82 to 1804.76 this week for a small +0.33% gain. And boy oh boy the market keeps defying gravity. It has all become slower and more boring with the light volumes we are seeing, which is only bound to continue in front of Thanks Giving weekend in the US.

January 2014 SPX Iron Condor

Yesterday (Friday, November 22) I entered the first position using 2014 options.

First 2014 trade. January $SPX Iron Condor 1645/1650/1880/1885 for 0.80 credit
— The Lazy Trader (@lazytrading) November 22, 2013

A website for finding out about trading services/newsletters

Today's article is about a website that I recently discovered but hadn't found the time to blog about. I'm talking about Pro-Trading-Profits. This site is useful for finding profitable trading newsletters out there, and even better: to know in advance whether a certain newsletter is profitable or not before you even decide to subscribe.

Weekend Portfolio Analysis (November 16, 2013)

All three remaining November positions expired yesterday yielding full profit. November was a good trading month that resulted in a 4.41% portfolio growth after commissions improving the track record for the year (+8.97%). My goal is to finish above the 10% mark in what has been a very challenging 2013 for option premium sellers and despite some reckless trading that had me down -14.22% early this year. From that moment (February expiration) up until now (November expiration) the performance has been +27.03% (and that is total portfolio growth, and also after commissions). Pretty decent.

December $SPX positions adjustments

Today was an active day for the Lazy Trader, you can see all my tweets today (November 14), whose screenshots I won't reflect here as they would take up to much space.

There was only one position in the portfolio for the December expiration cycle at the start of the day: SPX 1600/1605/1835/1840 Iron Condor. I decided to close the Call side (1835/1840) as I am seeing a very strong market that according to the parameters I follow IS NOT OVERBOUGHT. Meaning it has plenty of room to move up.

Weekend Portfolio Analysis (November 9, 2013)

What a week folks! What a week! It is so nice to have some fun in a year that has been so slow moving (up most of the time), dull, uninteresting......In the end SPX opened at 1763.40 on Monday and closed at 1770.61. That's a +0.41% gain. The week started slow and boring as usual, then we had a nice down move on Thursday (Looks like the bearish divergence between price action and oscillators worked once again), and finally the rebound on Friday, to prove, yet once again, that this market is pretty strong (specially at this time of the year). 

Closing the Call side of the November 2013 $SPX Iron Condor

Today I closed the Call side of the SPX 1565/1570/1800/1805 November Iron Condor as the market is not at an extreme overbought condition anymore according to the parameters I follow and the 1800 short Call is barely 2% above current price.

Out of November $SPX 1800/1805 Credit Call spread  for 0.30 debit. Small 0.10 profit. Won't take the chance. Blog update in the evening.
— The Lazy Trader (@lazytrading) November 4, 2013

Weekend Portfolio Analysis (November 2, 2013)

SPX moved from 1759.42 to 1761.64 this week for a small +0.13% gain. So, the movements in the last two weeks have been +0.84% and +0.13%. Small/slow moves as I expected in my two most recent Weekend Portfolio Analysis articles due to the extreme overbought nature of the market.

Weekend Portfolio Analysis (October 26, 2013)

SPX went from 1745.20 to 1759.82 this week for a small +0.84% gain. The market keeps slowly creeping higher at the upper end of the uptrend channel.

December SPX Iron Condor

Today I opened the first trade of the December 2013 options expiration cycle as follows:

BUY 4 Dec SPX 1600 Put @5.10
SELL 4 Dec SPX 1605 Put @5.30
SELL 4 Dec SPX 1835 Call @4.00
BUY 4 Dec SPX 1840 Call @3.40

Weekend Portfolio Analysis (October 19, 2013)

Well, well, well,........the October 2013 options expiration cycle is officially in the past now. The final 4 positions expired worthless for full profits: RUT 1120/1125 Bear Call Spread (+$200), SPX 1780/1785 Bear Call Spread (+$280), SPX Bull Put Spread 1595/1600 (+$240) and RUT 970/975 Bull Put Spread (+$120).

November 2013 RUT Call Credit Spread

Nov $RUT 1160/1165 Credit Call Spread for 0.40
— The Lazy Trader (@lazytrading) October 18, 2013

This trade was entered yesterday as part of the November options expiration cycle.

Canadians at a disadvantage when trading US markets

Well, the fact that our brokers selection is so limited plus the abominable trading fees we pay up here are disadvantages by themselves. But when trading US stocks or investing, more disadvantages become clear.

Weekend Portfolio Analysis (October 12, 2013)

We had probably the most exciting week of the year in terms of significant moves in both directions. We had  a VIX that went up and down like crazy. We had opportunities to sell premium, we had positions threatened, we had it all! It was fun! In the end SPX went from 1687.15 to 1703.20 for a +0.95% gain.

How to save some money in Forex trades

Transaction costs in Forex are rather small. Most brokers today don't charge an official fee per trade. The transaction cost is therefore reduced to the bid - ask spread. That's where Forex brokers make their money. At present this spread is not huge as we see in Western Union stores. It is a trading spread, and for Forex brokers is pretty low, for example most of them nowadays are able to offer a 2 pip spread or lower in the EUR/USD currency pair, that is 0.0002.

October SPX Credit Put Spread adjustment plus a new RUT Credit Put Spread

Today I had to make an adjustment in the SPX 1615/1620/1780/1785 portfolio. Basically I rolled down the Put side to 1600/1595.

Rolled Oct SPX 1620/1615 down to 1600/1595 for 0.40 debit.Market looks oversold, but risk management always goes before any assumption.
— The Lazy Trader (@lazytrading) October 9, 2013

Weekend Portfolio Analysis (October 5, 2013)

SPX from 1687.26 to 1690.50 this week, for a +0.19% gain. The rhetoric in Washington keeps everybody nervous and the VIX almost hit 19 this week. Most sources out there seem to agree that the market will rally once all these budget talks and debt ceiling negotiations are over. The problem is, you don't know how much heat you have to suffer as a bull from here to that moment. Or if the negotiations will ever be effective. In any case, nobody, NOBODY can predict the future. And even if the negotiations are a success you could also see the market tank haha. I believe markets have a funny way to make fun of everybody, regardless of economy, political stability etc. And that's why I never try to predict any market move based on fundamental factors. Anyways, let's see what we've got this week.

Guide to Butterfly Spreads

You can download the Bulsh*t free guide to butterfly spreads for free today at Amazon. It is a comprehensive guide on how to trade butterflies as I haven't found anywhere else on the internet. The book is written by OptionsTradingIQ, a frequent contributor to this website. I think it is an excellent read if you're interested in Options trading specifically using spreads. It will give you insights on how an experienced trader trades this strategy, how to set profit targets and stop losses, how to choose the width of the strike prices etc.  The guide's going to be free this weekend.

I hope you enjoy it!

Long Term Investing in dividend growth stocks

This article has nothing to do, or very little, with what you usually come to this blog for (my frustrations and successes in Options and Forex). But after a while, I decided that investing in dividend paying stocks with a history of increasing their dividend and decades of paying cash to their shareholders, makes a lot of sense. There are always these registered accounts anyways (TFSA, RRSP, IRA) where you are not allowed to do the fancy stuff anyways (shorting stocks/options, playing unlimited risk strategies etc). So, I figured it just makes sense to some how invest that money in something other than GICs.

November SPX Bull Put Spread

Filled on SPX Nov 1520/1525 Put spread for 0.40 credit a few minutes ago while at lunch. Dont think SPX will go down there.
— The Lazy Trader (@lazytrading) October 4, 2013

This was the trade today and here are the details for the model portfolio:

Investing in GURU. Another strategy to beat the markets?

In the never ending quest to achieve better and better results in the markets, some of us, I know I do, spend hundreds of hours per month investigating and studying everything trading-related. To me it really is a hobby. Some time ago I talked about A simple strategy that beats most traders and then after that article I wrote another one trying to enhance that first strategy in Covered Call vs Buy and Hold. Performance comparison.

Weekend Portfolio Analysis (September 28, 2013)

SPX went from 1711.44 down to 1691.75 for a -1.15% decline. I didn't trade this week and I consider the market to be in total no man's land right now with plenty of room to move in either direction.

Weekend Portfolio Analysis (September 21, 2013)

September expiration was yesterday an with it the Sept SPX 1560/1565/1760/1765 Iron Condor and the Sept RUT 935/940 Bull Put spread expired worthless for full profit. The total gain in the model portfolio was +$365 after commissions, which represents a +3.69% gain in respect with the initial balance for the month of $9880.

After September expiration, the model portfolio shows a balance of $10245, or in other words it is up +2.45% for the year. That's certainly terrible compared with the S&P's performance this year. But it represents a great improvement since February. The first two months of the year took the model portfolio to a draw down of -14.22% when it reached its lowest balance of $8578. From them until now the portfolio has grown from $8578 to $10245 for a +19.43% gain in the last seven months, which is pretty good. And all that, in the middle of a very low volatility environment, which makes it harder to collect premium and a most of the time furiously bullish market.

November 2013 SPX Iron Condor

Today I sold an SPX 1565/1570/1800/1805 Iron Condor with November expiration options as follows:

Bought 4 SPX November 1565 Put @5.70
Sold 4 SPX November 1570 Put @6.10
Sold 4 SPX November 1800 Call @3.40
Bought 4 SPX November 1805 Call @3.00

Calculating Implied Volatility using Excel

The following is a guest post by trader, blogger and good friend Gavin from Options Trading IQ. Check out his website for useful information and a transparent approach to trading.

October positions adjustments

What a day in the markets today! I made three trades in total, all of them using October options. Before going to the action, these are the positions that I had in October:

October SPX 1575/1580/1750/1755 Iron Condor
October RUT 1120/1125 Bear Call Spread

October 2013 $RUT Bear Call Spread

This is the RUT trade I entered yesterday which I didn't find the time last night to blog about

IN October $RUT 1120/1125 for 0.50 credit.
— The Lazy Trader (@lazytrading) September 17, 2013

October SPX Put side. New roll up

Today I modified the SPX 1540/1545/1750/1755 Iron Condor by closing the puts and opening a new put side using strikes 1575/1580

October SPX 1540/1545 Credit Put Spread rolled up to 1575/1580 for .15 credit. $100 profit in that 1540/1545 position.
— The Lazy Trader (@lazytrading) September 16, 2013

Weekend Portfolio Analysis (September 14, 2013)

What boring last couple days we had in the markets! And boring is always music to option premium sellers' ears. Thank God the last two days were boring because the first three were the always nasty type of rally accompanied by vol contraction. SPX jumped from 1656.85 to 1687.99 this week for a +1.88% gain. I took advantage of the move and slightly tweaked the original SPX 1525/1530/1750/1755 October Iron Condor on Tuesday by closing the Put side (1525/1530) and receiving additional credit for the new 1540/1545 Put spread.

October SPX Put side of Iron Condor rolled up

As per my tweet today in the afternoon

Trying to Roll SPX 1525/1530 Put side of October Iron Condor up to 1540/1545 for 0.25 credit overall.
— The Lazy Trader (@lazytrading) September 10, 2013

I closed the Put side (1525/1530) of the October SPX Iron Condor
At the same time I opened a new Credit Put spread on SPX a little further up (1540/1545)

Weekend Portfolio Analysis (September 7, 2013)

There was no trading activity this week, just babysitting the two September positions and the October Iron Condor. SPX went from 1635.95 to 1655.17 for a +1.17% gain. This move puts the Iron Condors of the portfolio in much better shape. And now it looks like a potential downtrend channel is being formed after the high of the candle on Friday was rejected as it touched the upper end of the channel which coincided with the 50 day Simple Moving Average.

Turtle Trading System Automated. Method 2. (Forex Expert Advisor)

The legendary story of the Turtle Trades. Pretty intriguing isn't it? If you don't know about the Turtles and the story behind them, you can read here. My question always was, are the mechanical systems that they used still valid today? Are those systems still profitable? Are they applicable to Forex?

Weekend Portfolio Analysis (August 31, 2013)

SPX went from 1664.29 to 1632.97 this week, for a 1.88% decline. The model portfolio remains the same as I didn't do anything, although I felt tempted to enter a RUT Bull Put spread with October options. But, there is too much exposure already in the portfolio and I want to play it safe.

Let's see how the market's looking now

Weekend Portfolio Analysis (August 25, 2013)

SPX went from 1655.25 to 1663.50 for a small +0.48% gain relieving some of the short term over sold conditions described last week.

October 2013 SPX Iron Condor

As tweeted on Friday

Correction, October $SPX Iron Condor 1525/1530/1750/1755 for 1.00 Credit.
— The Lazy Trader (@lazytrading) August 23, 2013

I entered the first October 2013 expiration position using an SPX Iron Condor as follows

Weekend Portfolio Analysis (August 17, 2013)

Yesterday was expiration day for August monthly options. With it, the August SPX Iron Condor(1560/1565/1745/1750) expired worthless for full profit (+$425). August resulted in a +3.37% performance before commissions for the model portfolio and +2.40% after commissions (considering a very unfavorable $1.50 per contract). Not quite the great month I expected, but not bad at all either. Repeat that 12 times a year and you have an excellent result.

September 2013 RUT Bull Put spread

As tweeted yesterday I entered a RUT Bull Put spread using September options

September $RUT Bull Put spread 935/940 for 0.35 credit
— The Lazy Trader (@lazytrading) August 16, 2013

Forex Rebellion doesn't work

If you came to this article it means you probably know about the Forex Rebellion system. It's nothing new. In fact it came out a few years ago. There are certainly several positive reviews out there, many of them by affiliates which doesn't really count (read this article I wrote in 2011 on how to spot affiliate reviews), but there are many other positive reviews by real users. The reviews generally tend to be positive because the system advocates the use of stop losses, protection of profits, letting winners run etc, which I agree are good lessons. But what about real results? Does this trading system make money or not?

Weekend Portfolio Analysis (August 10, 2013)

SPX moved from 1708.01 to 1691.42 this week for a -0.97% loss. I took advantage of the accelerated time decay in August, and this small market decline to close the RUT 1080/1085 Bear Call Spread this week for a $200 profit. And I also opened the first September position using an SPX Iron Condor and playing it small (only 3 contracts) due to the low Volatility. Ideally for Iron Condors you want to sell inflated option prices (high volatility).

September 2013 $SPX Iron Condor

Today I entered the first September trade as follows:

Sept Spx Iron Condor 1560/1565/1760/1765 for .80 credit. Playing very small here as Vix is at the bottom of its range
— The Lazy Trader (@lazytrading) August 7, 2013

Closed August $RUT Bear Call Spread

Out of $RUT 1080/1085 for 0.30 debit. Original credit received 0.70. 5 contracts per leg = +$200 profit.
— The Lazy Trader (@lazytrading) August 6, 2013

Weekend Portfolio Analysis (August 4, 2013)

Folks, what a market! It's all I can say. Beating the markets this year is going to be really really hard even for the "only long equity" funds. For sure I know I won't beat it with only less than 5 months and still dragging a negative performance this year (Although with a nice improvement after February). Tough lesson: selling premium is one of the hardest jobs when the market is in full bullish mode and the VIX remains below fifteen for most of the year.

Weekend Portfolio Analysis (July 20, 2013)

July 2013 expiration is now in the past and the two positions that were open finally resulted in full profit without closing commissions. The month resulted in a +4.51% gain after commissions in the model portfolio and it was very comfortable to handle overall.

Weekend Portfolio Analysis (July 14, 2013)

The market keeps defying gravity, and no matter how overbought it is, it just keeps stubbornly going up causing the worst possible scenario for credit spread sellers (sustained uptrends and low implied volatility, can't get worst than this)

August $SPX Iron Condor adjustment

With the market on its unstoppable run I closed the 1430/1435/1700/1705 SPX August Iron Condor on Friday

Closed Aug. SPX 1435/1440/1700/1705 Iron Condor for 1.70 debit ($225 loss) Opened new 1560/1565/1745/1750 for 0.85 credit($425, 5 contracts)
— The Lazy Trader (@lazytrading) July 12, 2013

August 2013 RUT Bear Call Spread

Today I sold a RUT Credit call spread as follows:

Back to war. Sold AUG 1080/1085 RUT Bear Call Spread for 0.70 credit
— The Lazy Trader (@lazytrading) July 11, 2013

Weekend Portfolio Analysis (June 23, 2013)

I opened the following Iron Condor on Friday but didn't find the time to blog about it that day.

Sold August SPX 1435/1440/1700/1705 Iron Condor for .95 credit
— The Lazy Trader (@lazytrading) June 21, 2013

Weekend Portfolio Analysis (June 14, 2013)

No activity in the model portfolio this week as there is already enough downside exposure to be selling more Credit Put Spreads and at the same time the market didn't give me the rebound I was expecting to sell a Credit Call Spread.

SPX traveled from 1644.67 to 1626.73 for a -1.09% loss.

Weekend Portfolio Analysis (June 8, 2013)

From 1631.71 to 1643.38 the SPX index advanced this week rebounding beautifully off the lower end of the uptrend channel like in classic technical analysis books.

June RUT 1025/1030 Bear Call spread closed. New July Bull Put spread sold

Today, Wednesday June 5 the market started to look unusually oversold with the McClelan Oscillator hovering -300, and close to only 30% of the stocks above their 20 day moving Average, so I decided to do two things:

Weekend Portfolio Analysis (06-02-2013)

SPX opened on Monday at 1652.63 and closed at 1630.74 for a -1.32% loss. Friday saw a decent loss there, we'll see if there's follow through. It could be, based on the length and shape of the candle, solid body with a close near the low of the day.

July 2013 SPX Bull Put Spread

Yesterday I entered the first July position. Although unfortunately din't have the time to blog about it as things are pretty hectic at the office these days.

Trying July Spx bull put spread 1505/1510 for .40 no fills yet
— The Lazy Trader (@lazytrading) May 29, 2013

Weekend Portfolio Analysis (05-26-2013)

SPX went from 1665.71 to 1649.60 for a -0.97% decline. A new trade was entered on Thursday using RUT Put options in June expiration and now there are two Iron Condors in June, which I'll talk about later and no position in the July cycle yet.

June 2013 $RUT BullPut Spread

Yesterday I entered a RUT credit put spread using strikes 905/910

Rut 910/905 bull put spread in June for .50 credit. Now an Ic 905/910/1025/1030
— The Lazy Trader (@lazytrading) May 23, 2013

Weekend Portfolio Analysis (05-18-2013)

Yesterday was May 2013 expiration and with it, the RUT 1000/1005 Bear Call spread and the SPX 1440/1445 Bull Put spread expired worthless for full profit. May expiration was the best month so far this year with a +5.15% return before commissions.

June $SPX Iron Condor adjustment

Today I closed the June SPX 1430/1435/1660/1665 Iron Condor for 2.35 debit. As the original trade was entered for 0.80 credit, this represents a 1.55 loss ($620 in 4 contracts per leg). This position should have probably been closed two days ago when the 1660 short strike had a 30% probability of being in the money. The loss would have been more manageable.

A new trade was immediately open after that, but using 5 contracts per leg instead to obtain a little bit more credit (in total)

June $RUT Credit Call Spread

Today I opened a RUT Bear Call spread in June as follows:

SELL 4 June 1025 Call @2.40
BUY 4 June 1030 Call @1.90

Weekend Portfolio Analysis (05-04-2013)

SPX moved from 1582.34 to a close of 1614.42 on Friday for a solid +2.03% this week. And nobody, nobody can tell me they can predict anything related to where the market is headed. Folks, we've been in this unstoppable uptrend for almost 6 months now! The more I watch this thing, the more convinced I become that predicting short term direction is a futile exercise.

Weekend Portfolio Analysis (04-27-2013)

SPX went from 1555.25 to 1582.24 this week for a very decent +1.74% and boy oh boy, the market proves once again how much it loves to go against what the majority thinks.

June 2013 SPX Iron Condor

With 8 weeks to expiration, an SPX 1430/1435/1660/1665 Iron Condor was sold yesterday (Friday April 26) for 0.80 credit as follows:

BUY 4 SPX 1430 Put @4.70
SELL 4 SPX 1435 Put @5.00
SELL 4 SPX 1660 Call @3.10
BUY 4 SPX 1665 Call @2.60

Closed May 2013 RUT 855/850 Bull Put Spread

The Put side of the May RUT 850/855/1000/1005 Iron Condor was closed today.

Just closed Rut 855/850 bull put spread for .20 debit. Balancing portfolio risk.wouldn't have closed if it was the only trade in portfolio
— The Lazy Trader (@lazytrading) April 24, 2013

Weekend Portfolio Analysis (04-21-2013)

April expiration is now in the past and it resulted in a decent month for the model portfolio (+4.09% before commissions). The two remaining positions (SPX 1445/1450/1610/1615 Iron Condor and the SPX 1440/1445 Bull Put spread expired worthless for full profit on Friday morning and the focus now shifts to May expiration.

May 2013 $SPX Credit Put Spread

Today I entered an SPX 1445/1440 Bull Put Spread for 0.50 using May expiration options

Sold $Spx May 1445/1440 Credit put spread for 0.50. 29 days to expiraton
— The Lazy Trader (@lazytrading) April 18, 2013

Weekend Portfolio Analysis (04-13-2013)

The markets (SPX) went from 1553.26 to 1588.85 this week for a solid +2.29%. We're back around the top of the range, and the market is still defying skeptics. Me among them, although I stopped selling close to at the money Bear Call Spreads back in February for good.

TastyTrade - truly changing financial education

Note: This article was written in April 2013 when I had been watching the show for less than a month. For a more in depth review describing and analyzing both good and bad points please visit tastytrade - an unbiased review, my comprehensive article after watching the show for two years.

If you haven't watched an episode of TastyTrade, take your time and take a peek. TastyTrade runs a live show everyday during market hours and they have become something like a permanent radio station I listen to while I work. Because I can't watch the show, as I work in an open office concept, at least I get to listen to the show on my head phones all day long and boy oh boy do they make my day better.

Update: You may also want to read my second review of TastyTrade two years after this first one

Weekend Portfolio Analysis (04-07-2013)

SPX went from 1569.18 to 1553.28 this week for a small loss of -1.01%. There was a decent downside move on Friday that bounced off of the lower end of the up trend channel beautifully. It would have been a nice opportunity to sell a Bull Put Spread and I had 1430 in my mind as the short strike, but as many others, didn't enter expecting more downside.

New auto-trade platform for Forex traders provided by myfxbook.com

Today, myfxbook announced the release of a new auto trade service where Forex traders can follow other traders' strategies and mimic their trades. According to the article the service looks very promising and seems to really deal with most problems that other similar services have had over the years.

May 2013 $RUT Iron Condor

The first trade of the May 2013 expiration cycle was entered today during afternoon hours

$Rut 850/855/1000/1005 iron condor entered for 0.85 credit. May 2013 expiration
— The Lazy Trader (@lazytrading) April 1, 2013

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.

Forex Price Action vs Indicators. Which one is better?

It looks like every Forex website or forum I read lately there's always somebody, or more than one person praising "Price action trading" instead of using "indicators". It seems fashionable now, to say that trading pure "price action" methods will yield better results than using confusing indicators. And that the reason why you are losing money trading is obvious: you are using indicators! Stop using them!

Weekend Portfolio Analysis (02-23-2013)

SPX started trading at 1519.79 on Tuesday and closed the week at 1515.60 for a small 0.28% loss. And ladies and gentlemen that was the first negative week of the year.

April 2013 $SPX Iron Condor

Today I entered the first April 2013 position. A 1375/1380/1580/1585 SPX Iron Condor as follows:

BUY 4 April 1375 Put (@5.90)
SELL 4 April 1380 Put (@6.30)
SELL 4 April 1580 Call (@3.10)
BUY 4 April 1585 Call (@2.65)

SPX March Put Credit Spread Roll Up to book profits

Today I rolled up the March SPX 1355/1360 Credit Put Spread to 1445/1450. Essentially closing the 1355/1360 trade for a profit and trying to get some new credit for the new 1445/1450 one as the market keeps headed higher.

Weekend Portfolio Analysis (02-16-2013)

February 2013 is now in the books of history. It was a bad month for me, and these are the good ones to learn from. I can identify two main mistakes I made:

Mistake 1: Opening the RUT 890/895 Bear Call Spread on January 2. Not only was the market not overbought (against all my rules). But I also disregarded the fact that January is one of the most bullish months of the year. Historically speaking, chances of sell offs are much lower.

Mistake 2: Closing the SPX 1530/1535 on Tuesday. The reason why it was a mistake is because I chickened out. I had an alert set at 1528. A number that was never touched, in fact 1525 was never touched.

February $SPX Call Credit Spread closed

Today I closed the February SPX 1530/1535 Call Credit Spread for 0.65 debit. The initial position had been entered for 0.70 credit so this trade resulted in a small 0.05 profit, which represents $25 in five contracts that were played. Basically just covering commission costs.

Weekend Portolio Analysis (02-09-2013)

SPX went from 1513.17 to 1517.93 this week for a small 0.32% gain. The market hasn't given the sell off that many have been waiting for so long and I truly believe we are not overbought anymore. As an options seller, my goal each weekend is not to predict exact short term market direction but to determine whether the market is very overbought, very oversold or in no man's land. That's it. Based on that I will trade or not and will give room for error in my strike prices, always out of the money.

March 2013 $RUT Iron Condor

As per my tweet yesterday. Here's my RUT Iron Condor for the March expiration cycle

BUY 5 March 825 PUT
SELL 5 March 830 PUT 
SELL 5 March 955 CALL
BUY 5 March 960 CALL

Weekend Portfolio Analysis (02-02-2013)

SPX went up a little bit more this week, from an opening 1502.96 on Monday to a close of 1513.17 on Friday for a 0.68% gain. The progression for the last 4 weeks has been +0.38%, +0.94%, +1.14% and +0.68%. The market keeps slowly creeping higher, defying the most skeptics out there.

Managing RUT Options positions

Today I closed the RUT February 920/925 Bear Call spread that I originally opened on January 18 as part of a trade adjustment.

BOUGHT TO CLOSE 5 February 920 CALL @4.70
SOLD TO CLOSE     5 February 925 CALL @3.10

Weekend Portfolio Analysis (01-26-2013)

Another week of slow and painful upside movement. SPX from 1485.98 to 1502.96 for a 1.14% gain. Many traders, including myself have been predicting a top for a while. We've had no success. The only thing I have forecasted correctly was the fact that if the market kept going up it would be in a slow fashion, and so it has been with gains of 0.38% two weeks ago,  0.94% last week and 1.14% this week. The market simply doesn't crash to the upside.

February $SPX Credit Spread Roll Up

As tweeted before market close today, I rolled up the SPX 1520/1525 February Call Credit Spread. The position had been initially entered back in January 4.

BUY TO CLOSE 5 February 1520 CALL @ 5.30 (Initially sold for 3.75)
SELL TO CLOSE 5 February 1525 CALL @4.00 (Initially bought for 3.10)

February 2013 $SPX Put Credit Spread

The following trade was entered:

Sell 5 SPX 1450 February Put @3.60
Buy 5 SPX 1445 February Put @3.10

Arbitrage in Forex explained

Arbitrage in trading is a situation where a trader can take advantage of pricing inefficiencies and enter a position where there is a locked in profit and no risk at all. I slightly talked about arbitrage in options trading a while back in my article about the Box Spread. But I wanted to find out about it in Forex. There are a couple ways, but this one is the easiest to understand.

March 2013 $SPX Iron Condor

March $SPX Iron Condor 1355/1360/1560/1565 for 0.75 credit.

BUY 5 March 1355 PUT @ 4.50
SELL 5 March 1360 PUT @4.90

SELL 5 March 1560 CALL @1.85
BUY 5 March 1565 CALL @1.50

Weekend Portfolio Analysis (01-19-2013)

I closed the RUT 890/895 February Credit Call spread yesterday, for 2.60 debit. Initially sold for 1.80 credit, that represents a loss of 0.80. In 5 contracts per leg that's a $400 loss. I decided to open another Call Credit Spread in February, that's what many would call an adjustment.

Options strategies for low implied volatility environments

My little experience selling Credit Spreads is that the worst possible market environment for option sellers is a market that slowly and almost stubbornly trades higher and higher. I've said that before. The Indexes go up little by little almost painfully and the volatility, the VIX and with it Options' premium in general go down.

Weekend Portfolio Analysis (01-12-2013)

Well, well, well, no trading for me this week, as the market barely did anything. The SPX index started the week at 1466.47 and closed at 1472.05 for a 0.38% gain. We are now trading right up against resistance on the SPX.

Weekend Portfolio Analysis (01-05-2013)

SPX went from 1402.43 to 1466.47 for a +4.57% gain, which is extreme for a week. RUT went up and hit my adjustment point of 868, I closed the original 870/875 spread and opened a new one using 890/895 with February options.

February 2013 $SPX Bear Call Spread

SELL 5 SPX 1520 Feb. 2013 CALL (@3.75)
BUY 5 SPX 1525 Feb. 2013 CALL (@3.10)

Credit: $0.65 (0.65 * 100 * 5 = $325)
Margin: $4.35 (4.35 * 100 * 5 = $2175)

RUT Call Credit spread adjusted

Initial trade entered on December 5, 2012 selling RUT 870/875 Credit Call spread for 0.70 credit.
Adjusted today when RUT hit 868 in the morning a few minutes after market open.

BUY TO CLOSE 5 RUT 870 Jan. 2013 CALL @12.07  (Initially sold for 3.30)
SELL TO CLOSE 5 RUT 875 Jan. 2013 CALL @9.37  (Initially bought for 2.60)

Debit 2.70
Initial credit obtained was 0.70.
So, the loss on this position was 2.00 debit. On 5 contracts per leg, that's exactly $1000.

Trading Forex vs Stocks. Which one offers better chances of long term profitability?

Controversial topic indeed and I'm going to offer my point of view based on my limited experience of 3 years and the knowledge I've been able to gather while intensively studying both markets.