If you weren’t able to make it to this year’s John Locke trading session called the “Trading Triangle”, you missed out on a great time of trading discussions and fun in the sun. It was down right awesome! It was a fun fulfilled week in Maui of Hawaiian fire twirling dancers, sun, sandy saddles, Hawaiian shirts, Seth “El Capitan” (Successful Options Trader of the Month June 2016), Mai Tai drinks, new and old trader friends, strange trading hours, and most importantly some outstanding takeaways from the session that will further our trading journeys.
I could go on and on about the session in Maui, but this blog is not about that great session. It’s about sunscreen. Yep, that’s some exciting stuff. We, traders, probably had the whitest looking bodies on the beach (best looking of course), which as you may guess requires the most sunscreen, but that’s ok. Why? We were protected.
So, how does sunscreen relate to trading? I can sum it up in one episode. It was one of the strangest experiences I’ve encountered as a trader. No, it wasn’t seeing Raymond again. It was the aftermath of Brexit. Not all traders get to experience a “lock limit down” move, which is when any futures product especially the /ES futures move up or down by 5% overnight. The big wizard behind the machine halts trading for a period of time. Now, what was my strange experience? We went through the lock limit episode while attending a luau. When word spread around the trading group that evening about the drop in the E minis, many thoughts went through my head. One was obvious…am I protected? The thought especially took form while watching the Hawaiian flame twirler putting out fire with his mouth. I thought about asking him to come over to our table and do the same to me.
Did I get burned? No. Why not? I was protected. This so-called sunscreen trade, the M3, took care of me. Luckily, my M3 was well positioned and I actually was up a little after the dust had settled the next day. Coming from “sell the strangle/straddle/iron condor” world, that just blew my mind.
I have spoken many times about the positives of John Locke’s “low risk and high reward” trades. However, to experience it fully during a lock limit down event has solidified my belief in the trades.
Great job to the Locke family for making last week such a great time! I’m already looking forward to next year. Keep using sunscreen, gang.
Written and contributed by John Wilson, Successful Options Trader of the Month May 2016