I'll tell you what. Fishing is great up there! I'd like to go back a little later in the season when a couple of the rivers drop a bit. The fish are monsters up there but really picky compared to the locals here. Pretty frustrating when they are jumping right in front of you and you can't get them to take any pattern you've got. It's like trying to hunt elk with a slingshot. All the better though. That must be why they are so big. I'd like to get up to the Madison sometime. I hear the fishing is great there too.
Today's Action STO 4 GENZ AUG 57.5/60 p @ 1.00 Year to Date P/L Account Value: $13,829.50 YTD Gross P/L: 4,365.00 YTD Commiss: 535.50 YTD Net P/L: 3,829.50 YTD % P/L: 38.3% Looking for biotech to be strong longer term, but there might be a lag for a couple months while the rest of the market runs. Waiting for SPX to get closer to 1290 before I make a move there.
I thought we had a chance to hit 1290 on the SPX today after the jobs report. The initial reaction in the futures was very positive but gave it all back shortly thereafter.
Yeah, I think many people are of the same opinion I am. A bit of strength short term, but down in the end.
Today's Action BTC 4 GENZ AUG 57.5/60 p @ 0.45 Year to Date P/L Account Value: $14,049.50 YTD Gross P/L: 4,365.00 YTD Commiss: 547.50 YTD Net P/L: 3,817.50 YTD % P/L: 40.5%
Cache, do you usually look about 45 days forward? I usually work with a 30 day view, less credit that way, but the overall risk is less. Is your risk management different with 45 days vs. 30 days?
Not necessarily. For a credit vertical I generally won't open a position >45d from expiry though. I generally prefer about 30d. You and I have differing views on risk. But to answer your last question, yes it is different. One of the 10 theories that economists agree on is that, "rational people think at the margin". They also say that people behave in a manner that is consistent with the idea of "rational self-interest". I would agree when we are talking about general life decisions, but I counter with the idea that in the trading world there are many "irrational" people. I would extend the idea of thinking at the margin to pertain to writing credit spreads. I don't mind opening a position that is greater than 45d from expiry, AS LONG AS I'M COMPENSATED APPROPRIATELY. In my mind the rational trader is compensated proportionately for an additional amount of risk. In my experience there are a ton of traders that will take on the additional risk without requiring sufficient compensation. For the position in question, I recieved enough compensation given my forecasts for the underlying. I could have waited another month for theta to eat away at the remaining credit. But remember to think rationally at the margin..... Today I was sitting on a position that had the ability to return an additional 0.45/contract. In considering whether or not I would open the existing trade under the current situation (aka thinking at the margin), I decided that given my current forecast for the underlying I was better served taking the profits. So yes, the risk management is very dependant on the present situation. I don't really care what happened in the past. When I opened this position, I didn't expect that I would hold it through expiry. Theta decay wasn't my original goal.
Thanks, Cache. A lot of good meat here. Currently all my positions are bear calls that I entered at the last peak. This will be my first summer trading SPX/OEX/XEO, so I'm taking things very cautiously. I appreciate you taking the time to give a detailed response. Crucis