All the trades worked out except the Iron Condor on SPX. I reversed the trade for a loss, and then traded three more weeklies (AMZN, AAPL, PCLN) for a grand total of $1572.37. (very close to the original winnings expected.)
Some statistics: Weekly average after 9 weeks of weekly credit spreads: $715 Average of Reward over risk on a weekly basis: 14.39%
I'll be putting on trades for 4/6/12 next Monday. I currently have all my cash tied up in option requirements. It will be released by the broker for trading tomorrow.
Okay I've decided to disclose my weekly trades, for any of my readers who might want to papertrade and/or follow my actions just as a learning tool.
My fund is too small to do all my trading on Thursdays (when the Weeklies come out) so sometimes I do them the following Monday, after my "option requirements" are released by my broker.
So here we go:
Across the top the columns are:
the Probability (of success) percentage, the Stock symbol, the date of putting the trade on the credit spread strategy the Strike Prices of both the short and long options (P) Puts (Bull Put) or (C) Calls (Bear Call) the Number of Contracts (minus sign on the shorts) the premium received and paid for the short and long the extended value the brokerage fees on that leg of the trade the net after fees collected the net CREDIT received (and to keep if the trade is successful) the "option requirement" (and maximum loss possible) which the broker will hold** the # of days until expiration the % of reward to risk the annualized % of reward to risk (I don't do trades that result in less than 40% annualized)
**this is calculated by the difference in Strike Prices (the spread) less the credit premium received on the trade. Ex: Strike price 170 minus Strike 165 is 5. x 100 shares is $500 per contract less net premium received. In the first trade below, it is $500 spread x two contracts = $1000 less premium received of $222.40. OptionsXpress will hold the $1000 and I have the $222.40 in my account, so the difference is my total RISK. (although that would be at expiration if you did nothing to save the trade if it was in trouble).
If anyone has questions, don't hesitate to ask here in comments, or at bevjackson at gmail.com.
OMG, I know I must sound like a crazy woman, but learning how to do spreads (and I don't mean just learning "how" to recognize or set them up, but learning what they are, how each leg can be used to adjust other trades -- is just a miracle for me!
As an example. I had a really, really good run with straight Calls on last week's Apple rally. I made a LOT of money in two days as it worked its way up to $600. I just bought and sold calls like a maniac. My fund isn't big enough to "day trade" so I just put trailing stops on them, and when the stock dipped 5% or more (which it did from time to time) my call would sell, and I'd turn around and buy another one. Apparently this doesn't count as day trading because it stopped out??
Anyway, the rally couldn't go on forever, so I was stuck with one call, way OTM (Jun $650) which then plummeted into the red as Apple reversed.
With this Option Animal training I'm getting (and I still love it!) I thought: well, how can I adjust this call and make some money? It is a June call, so I have lots of time. What I decided to do is use it as if it was stock, and write synthetic covered calls against it.
BTO Jun $650 Long Call (which is going into loss) STO Apr $640 Short Call (to offset expense of long call)
So I sold an Apr $640 Call, turning the trade into a Call Calendar or a synthetic Covered Call. It doesn't matter what I call it. The point is: I paid $2300 for the call with a June expiration, and I sold the April call for $935. That reduces my long call considerably. If Apple doesn't rally again, I shall then sell the May and then the June call, and hopefully that premium will cover my expense for the one last option trade in Apple that didn't come through with huge profits.
Without my new found knowledge of spreads, I would never have figured this out. I have a LOT more to learn, but at least what I am learning is helping me to keep my money and increase my profits.
Everyone by now has heard about the New York Times Op Ed written by Greg Smith. He resigned from Goldman Sachs publicly. “It makes me ill how callously people still talk about ripping off clients,” he wrote in the Op-Ed article. It was a scathing article confirming the worst greed and scandal of Wall Street that began to leak with the economic collapse that we already suffered (and continue to suffer). Pushing junk mortgages off as product on unsuspecting customers, for which they charged exorbitant fees, of course.
Another article appeared in the New York Times this morning with photos of the parties involved. It struck me that people who work on Wall Street may be a different species of animal than the rest of us.
This is a photo of the hugely successful CEO Lloyd C. Blankfein. Blankfein was named as one of "The Most Outrageous CEOs of 2009" by Forbes magazine. Anyone who calls his clients "Muppets" has got to be a bit outrageous, I'd say. And his evil twin, just behind him in this photo is Gary D. Cohn, the President and COO of Sachs. Their memo responding to Greg Smith's accusations were, of course, a complete denial.
The bald heads and similar faces struck me as almost alien-looking. Did Blankfein hire a replica of himself? Isn't this a bit odd? I have a friend, Benjamin Buchholz, who writes a blog called Not Quite Right. NQR. This definitely qualifies as NQR.
But then I see the photo of the courageous whistle blower, Greg Smith. (It has been said he waited until AFTER bonuses, however, to blow his little whistle). And he looks (to me) like almost a baby Blankfein in the making. He's only 32 and already the hair is gone?
Goldman Sachs takes NO responsibility for ripping off its clients. And perhaps its clients don't leave because they are the 1% of America's wealthiest, and are likely treating their own clients the same way.
America is spiritually bankrupt at the level of 1% and is insanely fundamentalist (religiously fervid Bible thumping) at the level of 99% (who knows how many?). Somewhere in the middle, the rest of us, the sane, reasonable, honorable) remain invisible, hoping that the market stays up!
As long as we're having this uptrend market, I am VERY happy to say that my Bull Put Strategies are working. I've decided to show my spreadsheet, just for inspiration to the "little guys" like me, who might be struggling.
Since 1/26/12, I have a $2100+ profit. The aqua blue "reversal" trades are my failures. (7 of them, but who's counting? 7 out of 26 trades means I have almost a 75% success rate.) You cannot win them all, and I'm learning to pick better strike prices as I go.