It’s been a while since the last position update. The last update was on Tuesday of last week and at that time the positions were all good shape. For the remainder of last week, the market was pretty flat so no changes were made to the positions, hence no updates. By Friday afternoon things were looking pretty good. Then on Monday RUT decided to blast off again with a 14+ point move, almost 2.5%. This move really slammed the positions and during the day on Monday I made adjustments to all the trades. The 5+ point move today just added to the pain. Below is a summary of each position:
I made many errors handling the March 55 day trade this month. It started out real well when the market pulled back into the 620 butterfly. The market continued to drop and I added a position at 600. The market continued to drop and that triggered mistake # 1, I jumped the gun and added a 580 position before my rules said I should and of course the market made me pay a little but no big deal. At this point the position was up almost 15%. Now my rules on a pullback suggest that I do not let the trade get down to less than 10% profit and that was mistake #2, I was pretty confident the market would roll back over and come back down and it didn’t. So I was thinking RUT would stop at 610 so I held the position longer than I should have. Then the same thing happened at 615 and when RUT stalled at 630, I figured we were all set and was holding the position with overly negative delta looking for the retracement. Then we got the 14 point move on Monday and I adjusted the position by selling the 620 butterfly still staying pretty short delta thinking we would at least get a retracement today,nope. Five + more points up today so I bought the 610/650/690 butterfly. So we go into tomorrow negative delta once again. This just goes to show how much you can goof up and still be in this trade. We’ve been in this bearish position for a 70 point run on the RUT and we still could make money. OK, currently the position is down about $900 and could really use a small pullback or at least for the market to stop going up. Position is below:
The method 1 trade was adjusted when it was way past it’s adjustment point on Monday. I bought back the 610/630 call side and rolled it back to 650/670. This trade “normally” can withstand a 60 point run in 1 direction but with the late adjustment we may get kicked out if the market gaps up tomorrow. Position is down $600 and is below:
The March method 15 is doing the best of the March trades so far, it was adjusted Monday also by rolling the 600 butterfly to 650. It is currently down about $390 and is below:
As far as the April 55 day, finally, it looks like we are getting a good entry. On Monday I entered a 580/620/660 butterfly. Now when you look at this, it looks pretty ugly but the trade is designed to be entered in this manner and then hopefully the market pulls back into our butterflies and we are up money. It would be best for this position if RUT pops up to just over 660 and then retraces 30-60 points but in the process the trade will be down about $1000 which is completely normal. Anyway, the trade is down $443 and right on track. Position is below:
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