Jan 312015

Market Conditions

The market was choppy the past five days with the SPX opening at 2050.42 and ending at 1994.99, down 55.43 or 2.7% for the week.  The SPX is in negative territory for the year, but so far has managed to hold above the resistance level at 1988. All of the other major indices ended the month in the red as well. So much for the January Effect. Volatility has increased nicely with the VIX spiking above 20 during the last three trading sessions of the week.

SPX Daily Chart

March Positions

No changes were made this week to the core portfolio. Although I had placed some orders to close out a couple of the SPX positions, I was never filled due to the expansion in volatility which helped to inflate the option prices. The core positions are all very high probability trades that are very far out of the money (greater than 1 standard deviation). They all still register a positive P&L despite the down move in the market. Continue reading »

Jan 282015

One of the goals of this blog is to provide a forum to share my trading successes and failures in hope that others can learn from my mistakes. Bram Stoker, the author of Dracula, said, “We learn from failure, not success!” As a trader, it is imperative that we are continually trying to improve our trading strategy by learning what not to do next time. Continue reading »

Jan 272015

One of the difficult things about trading is knowing when to close a trade. When a trade becomes profitable, it is often easy to become greedy and hold on to the position hoping that it will become even more profitable. In undefined-risk trades, I have learned the hard way that when you have a profit, you should go ahead and take it. It is always better to leave money on the table as opposed to wishing later that you had done so. Continue reading »

Jan 242015

As this is the first weekend portfolio review of this blog, it will be a bit lengthy as I review all the positions that have been placed in my account since the beginning of the year.

Market Conditions
It was a strong week for all of the major indices despite the selloff on Friday with lots of two-sided action almost every day. In the end the SPX index opened Tuesday at 2020.76 and closed the abbreviated trading week at 2051.82 for a 1.53% gain. The VIX started the week at 20.07 but continued to revert to the mean through the week ending at 16.66.


March Positions
The RUT and SPX credit spreads below make up the core of my portfolio. These are all extremely high probability, defined-risk trades and should conservatively generate a 2-3% return on capital per month. Continue reading »