SPX IC

Buy  10 SPX 30 May14(W) 1,925.00 Calls
Sell  10 SPX 30 May14(W) 1,920.00 Calls
Buy  10 SPX 30 May14(W) 1,860.00 Puts
Sell  10 SPX 30 May14(W) 1,865.00 Puts

Credit $0.70
Expire May 30 (8 days)

VXX and SPX Iron condors

Weekly Iron Condors - best fits for my trading

VXX

Buy100VXX11Apr14(W) 39.00 Puts

Sell100VXX11Apr14(W) 39.50 Puts

Buy100VXX11Apr14(W) 45.00 Calls

Sell100VXX11Apr14(W) 44.50 Calls

Market:$0.12 Sell

SPX:

Buy10SPX11Apr14(W) 1,800.00 Puts
Sell10SPX11Apr14(W) 1,805.00 Puts
Buy10SPX11Apr14(W) 1,885.00 Calls
Sell10SPX11Apr14(W) 1,880.00 Calls


Market:$0.60 Sell

Weekly Iron Condors - best fits for my trading

Week of March - 17 - 21 2014

GLD
GLD Mar 14 129.50 Put
GLD Mar 14 130.00 Put
GLD Mar 14 135.50 Call
GLD Mar 14 136.00 Call

IWM
IWM Mar 14 115.50 Put
IWM Mar 14 116.00 Put
IWM Mar 14 121.00 Call
IWM Mar 14 121.50 Call

QQQ
QQQ Mar 14 88.00 Put
QQQ Mar 14 88.50 Put
QQQ Mar 14 91.00 Call
QQQ Mar 14 91.50 Call

SPY
SPY Mar 14 181.50 Put
SPY Mar 14 182.00 Put
SPY Mar 14 189.50 Call
SPY Mar 14 190.00 Call

VXX
VXX Mar 14 42.00 Put
VXX Mar 14 42.50 Put
VXX Mar 14 48.00 Call
VXX Mar 14 48.50 Call

Two of my positions are up four down...

my positions today...

                                chg | %
QQQ 90.14 -0.47
GLD        129.82 +0.69
SPY        187.10 -1.11
VXX 49.36 +0.40
EEM 38.82 -0.43
EWZ 39.45     -0.18
UNG 25.47 -0.25

what is volatility?

Volatility on an instrument can be defined in terms of the normal distribution curve, a bell shaped curve, if curve is flatter and wider, it represents the occurrences of a wider range of prices for a particular period of time. A more narrow and cylindrical (taller) curve, representing a narrower range for the price occurrences. In the first case the instrument will be considered a high volatility vs the latter case.

Lets say we have two stocks each priced at $100, we buy a $110 call expiring in 30 days. Now lets suppose the 1st stock moves only $.5 each day, while the 2nd one moves $5 each day. In 1st scenario the of the $110 call option, the stock has to move up for 60 consecutive days  for the option to end up in the money. The 2nd stock with price moving $5 each day the stock has to move up only two days for the option to end up in the money. That is why volatility matters and options are priced differently.

Total premium, margin required for this week's trades

Date	Symbol	#	Premium	Total Premium	Margin/contract	Total Margin	Date Expire
3/6/2014	QQQ	20	$0.11	$220	$50	$1,000	3/14/2014
3/7/2014	EEM	20	$0.12	$240	$50	$1,000	3/14/2014
3/7/2014	GLD	20	$0.15	$300	$50	$1,000	3/14/2014
3/7/2014	EWZ	20	$0.12	$240	$50	$1,000	3/14/2014
3/6/2014	SPY	20	$0.13	$260	$50	$1,000	3/14/2014
3/6/2014	UNG	20	$0.15	$300	$50	$1,000	3/14/2014
3/6/2014	VXX	20	$0.12	$240	$50	$1,000	3/14/2014

Weekly Iron Condors - best fits for my trading

Candidates for the weekly Iron Condors week of Mar 7-14

QQQ
Buy20QQQ14Mar14 (W) 89.13 Puts
Sell20QQQ14Mar14(W) 89.63 Puts
Buy20QQQ14Mar14 (W) 93.63 Calls
Sell20QQQ14Mar14(W) 93.00 Calls

GLD
Buy20GLD14Mar14 (W) 133.00 Calls
Sell20GLD14Mar14(W) 132.50 Calls
Buy20GLD14Mar14 (W) 127.50 Puts
Sell20GLD14Mar14(W) 128.00 Puts

EEM
Sell20EEM14Mar14(W) 38.50 Puts
Sell20EEM14Mar14(W) 41.00 Calls
Buy20EEM14Mar14 (W) 41.50 Calls
Buy20EEM14Mar14 (W) 38.00 Puts

EWZ
Buy20EWZ14Mar14 (W) 39.00 Puts
Sell20EWZ14Mar14(W) 39.50 Puts
Buy20EWZ14Mar14 (W) 43.50 Calls
Sell20EWZ14Mar14(W) 43.00 Calls

SPY
Buy20SPY14Mar14 (W) 184.50 Puts
Sell20SPY14Mar14(W) 185.00 Puts
Buy20SPY14Mar14 (W) 191.50 Calls
Sell20SPY14Mar14(W) 191.00 Calls

UNG
Buy20UNG14Mar14 (W) 24.00 Puts
Buy20UNG14Mar14 (W) 27.00 Calls
Sell20UNG14Mar14(W) 24.50 Puts
Sell20UNG14Mar14(W) 26.50 Calls

VXX
Buy20VXX14Mar14 (W) 40.00 Puts
Sell20VXX14Mar14(W) 40.50 Puts
Buy20VXX14Mar14 (W) 47.50 Calls
Sell20VXX14Mar14(W) 47.00 Calls

why trade weekly options?

Trading weekly options  has the potential to offer quick turn around on your capital. 
In my observation weekly options has a higher probability of expiring worthless then the monthly option contracts. 

Although the premiums are lower but if done right the return may be higher in the weekly's. 
Out of the money weekly options on indexes and etf's offers enough premium to sell
at lower cost/margin requirements. 

In my strategy I choose a balanced portfolio of etf's to offset the risk on either side, the candidates have highly liquid options contracts, strike prices are 1 to .5 points apart and finally the underline has enough implied volatility offering adequate premiums to offset fees/commission costs and turn into a profitable trade.

Two of my positions are up four down...

• A Balanced portfolio, two of my positions are up...

GLD	130.29	2.09%
EEM	38.64	-2.13%
EWZ	39.77	-3.00%
SPY	184.21	-1.12%
VXX	52.28	7.75%
UNG	25.26	-0.98%

Weekly Iron Condors - best fits for my trading

Some candidates for the weekly Iron Condors

EEM:
EEM 7 Mar 14 (W) 38.00 Put
EEM 7 Mar 14 (W) 38.50 Put
EEM 7 Mar 14 (W) 40.50 Call
EEM 7 Mar 14 (W) 41.00 Call
Number of Contracts: 20
Net Credit: $240
Expire: 7 days

EWZ:
EWZ 7 Mar 14 (W) 38.50 Put
EWZ 7 Mar 14 (W) 39.00 Put
EWZ 7 Mar 14 (W) 42.50 Call
EWZ 7 Mar 14 (W) 43.00 Call
Number of Contracts: 20
Net Credit: $180
Expire: 7 days

GLD:
GLD 7 Mar 14 (W) 125.00 Put
GLD 7 Mar 14 (W) 125.50 Put
GLD 7 Mar 14 (W) 130.00 Call
GLD 7 Mar 14 (W) 130.50 Call

Number of Contracts: 20
Net Credit: $160
Expire: 7 days

SPY:
SPY 7 Mar 14 (W) 181.00 Put
SPY 7 Mar 14 (W) 181.50 Put
SPY 7 Mar 14 (W) 189.00 Call
SPY 7 Mar 14 (W) 189.50 Call

Number of Contracts: 20
Net Credit: $140
Expire: 7 days

UNG:
UNG 7 Mar 14 (W) 23.50 Put
UNG 7 Mar 14 (W) 24.00 Put
UNG 7 Mar 14 (W) 27.00 Call
UNG 7 Mar 14 (W) 27.50 Call

Number of Contracts: 20
Net Credit: $100
Expire: 7 days

VXX:
VXX 7 Mar 14 (W) 40.50 Put
VXX 7 Mar 14 (W) 41.00 Put
VXX 7 Mar 14 (W) 47.50 Call
VXX 7 Mar 14 (W) 48.00 Call

Number of Contracts: 20
Net Credit: $220
Expire: 7 days

times when nothing works?

Losing your will to trade?

The Option “Greeks”

Delta  -             Impact of underlying price
Gamma -         Change in delta
Theta -             Impact of time
Vega -              Impact of volatility
Rho -               Impact of interest rates

weekly Iron Condors - best fits for my trading

Some candidates for the weekly Iron Condors:

EWZ:

EWZ 28 Feb 14 (W) 38.00 Put
EWZ 28 Feb 14 (W) 38.50 Put
EWZ 28 Feb 14 (W) 42.50 Call
EWZ 28 Feb 14 (W) 43.00 Call

PCLN:

PCLN 28 Feb 14 (W) 1290.00 Put
PCLN 28 Feb 14 (W) 1292.50 Put
PCLN 28 Feb 14 (W) 1345.00 Call
PCLN 28 Feb 14 (W) 1350.00 Call

SPY:

SPY 28 Feb 14 (W) 180.50 Put
SPY 28 Feb 14 (W) 181.00 Put
SPY 28 Feb 14 (W) 186.50 Call
SPY 28 Feb 14 (W) 187.00 Call

UNG:

UNG 28 Feb 14 (W) 25.50 Put
UNG 28 Feb 14 (W) 26.00 Put
UNG 28 Feb 14 (W) 29.50 Call
UNG 28 Feb 14 (W) 30.00 Call

VXX:

VXX 28 Feb 14 (W) 39.50 Put
VXX 28 Feb 14 (W) 40.00 Put
VXX 28 Feb 14 (W) 46.50 Call
VXX 28 Feb 14 (W) 47.00 Call

Bollinger bands and indicators ...

Perhaps one of the most interesting aspects of Bollinger Bands is the rhythmic contraction and expansion of the bands you can see on the charts.

In general,the idea is that while price is neither cyclical—in a regular sense—nor forecast-able using cycles, volatility is both.

The most interesting conclusion is that low volatility begets high volatility and high volatility begets low volatility. This is the foundation of The Squeeze.

options education site

Best for learning stock/index options:

http://www.cboe.com/LearnCenter/Tutorials.aspx?id=cboe

What is Volatility? And, How Do I Use it?

Bollinger bands and indicators

• %b is derived indicator form BB, first,%b,tells us where the price is in relation to the Bollinger Bands and is the key to linking of price and indicator action. The formula evaluates to 1.0 when the last price is at the upper band,0.5 at the middle band,and 0.0 at the lower band.

It will exceed 1 when the last price is above the upper band or will fall beneath zero when the last price is below the lower band. At 1.1 it says that we are 10 percent of the BandWidth above the upper band,and at 0.15 it says that we are 15 percent of the BandWidth below the lower band.

%b is a truly relative tool, it tells only where we are in relation to the framework created by the Bollinger Bands. 

• BandWidth,tells us how wide the bands are. BandWidth is the key to The Squeeze and can play an important role in spotting the beginnings and ends of trends.

BandWidth is most useful for identifying The Squeeze,that situation where volatility has fallen to such a low level that its very lowness has become a forecast of increased volatility. The simplest approach to this is to note when BandWidth is at a six-month low.

An important use of BandWidth is to mark the beginning of directional trends,either up or down. Many trends are born in trading ranges when the BandWidth is quite narrow. A breakout from the trading range that is accompanied by a sharp expansion in BandWidth is often the mark of the beginning of a sustainable trend.

A strong trend will cause a large expansion in volatility that causes the bands to spread dramatically,so much so that the band on the other side of the trend—e.g.,the lower band in an uptrend—will head in the direction opposite to the trend. When that band reverses—turns back up in this case—that leg of the move is at an end. This also can be seen and enumerated in BandWidth. The idea is when BandWidth flattens out or turns down enough to reverse the direction of the Bollinger Band on the opposite side of the trend,the trend is at an end.

What is options skew?

Options at lower strike prices (OTM puts) have higher volatility than higher price options (ATM puts) and the OTM calls.

IV OTM puts > IV OTM puts

This higher volatility exists for two reasons:

• The vast majority (pension funds, mutual funds, 401(K)s, and the retail public), of the equity positions are long. Long investors, purchase puts as insurance against a portfolio drop, which increases the demand for puts. Increases in demand create increases in price. The way to make an option more expensive is to raise the volatility.

• Since the market moves down faster than it moves up bear markets are much more abrupt and realize outlying returns faster than bull markets. The more expensive OTM puts compared to OTM calls is simply a reflection by the options market that downside risk is greater than upside risk. 

TSLA Iron Condor

TSLA

Sell To Open TSLA Feb 14 245.00 Call
Buy To Open TSLA Feb 14 250.00 Call
Sell To Open TSLA Feb 14 160.00 Put
Buy To Open TSLA Feb 14 155.00 Put

Net Credit: $0.80

Expire :  Feb 14

UNG

Sell To Open UNG 14 Feb 14 (W) 26.00 Call

Buy To Open UNG 14 Feb 14 (W) 26.50 Call

Sell To Open UNG 14 Feb 14 (W) 22.00 Put

Buy To Open UNG 14 Feb 14 (W) 21.50 Put

Net Credit: $0.14

Expire :  Feb 14

SPY

SPY 14 Feb 14 (W) 182.00 Call

SPY 14 Feb 14 (W) 183.00 Call

SPY 14 Feb 14 (W) 176.00 Put

SPY 14 Feb 14 (W) 175.50 Put

Net Credit: $0.13

Expire :  Feb 14

Trade management

What is necessary to win this game?

Establishing an edge ..

 A simple probability of one thing happening over another.

What is my trade management strategy:

• Should I use stops? 

What and where the stops will be if I use them.

• Am I going to be:

all-in/all-out

all-in/scale-out

scale-in/scale-out

scale-in/all-out

• What will be my target price to exit? 

Is it a reasonable price point?

•  What is the focus of my strategy:

Is it to maximize profits?

To minimize risk exposure..

or to maximize emotional control..

I Will commit to taking at least 30 trades using this trade management strategy:

Take notes on every trade to measure errors

Errors to be measured:

Not entering a trade when I had the signal

Entering and then changing my trade management start

Chasing a planned trade

Execution errors (e.g., on the platform)

Impulsive trade

• If the trade management start change, then I will start a new trade sample (30 trades)
• Once the series is done, I will have a better idea on how well the edge works.
• My ultimate goal, however, is to build intuition and trust in myself... so that I can execute flawlessly!

UNG IC

UNG

Trade Details

 Buy 1 UNG 2014 31-JAN 21.00 PUT
 Sell 1 UNG 2014 31-JAN 22.50 PUT
 Sell 1 UNG 2014 31-JAN 25.50 CALL
 Buy 1 UNG 2014 31-JAN 27.00 CALL

Total Net Credit: $0.25
Expiration:           JAN 31

VXX IC

Trade Details

 Buy 1 VXX 2014 31-JAN 41.00 PUT
 Sell 1 VXX 2014 31-JAN 42.00 PUT
 Sell 1 VXX 2014 31-JAN 54.00 CALL
 Buy 1 VXX 2014 31-JAN 56.00 CALL

Total Net Credit: $0.21
Expiration:           JAN 31

NFLX, FAS IC

NFLX

Trade Details

 Buy 1 NFLX 2014 31-JAN 352.50 PUT
 Sell 1 NFLX 2014 31-JAN 357.50 PUT 
 Sell 1 NFLX 2014 31-JAN 410.00 CALL
 Buy 1 NFLX 2014 31-JAN 415.00 CALL

Total Net Credit: $0.77
Expiration:           JAN 31

FAS
Trade Details

 Buy 1   FAS 2014 31-JAN 80.00 PUT
 Sell 1   FAS 2014 31-JAN 82.00 PUT
 Sell 1   FAS 2014 31-JAN 94.00 CALL
 Buy 1  FAS 2014 31-JAN 96.00 CALL

Iron Condor LNKD, TSLA

LNKD

Trade Details

 Buy 1 LNKD 2014 24-JAN 202.50 PUT
 Sell 1 LNKD 2014 24-JAN 207.50 PUT
 Sell 1 LNKD 2014 24-JAN 235.00 CALL
 Buy 1 LNKD 2014 24-JAN 240.00 CALL

Total Net Credit: $0.35

Expiration:           JAN 24


TSLA

Trade Details

 Sell 1 TSLA 2014 24-JAN 167.50 PUT
 Buy 1 TSLA 2014 24-JAN 165.00 PUT

Total Net Credit: $0.31

Expiration:           JAN 24

Bollinger Bands - SPY PCLN GOOG

BOLL reading on 30 min chart:

SPY:
Price is below the lower band
Band has started to expand.

PCLN:
Price is touching the lower band
Band is expanding

GOOG:
Price is below the lower band
Band is expanding

COH Bull Put Spread

Trade Details

 Sell 1 COH 2014 24-JAN 49.00 PUT
 Buy 1 COH 2014 24-JAN 47.00 PUT


Net Credit: $0.30
% Return  : 17
Expire : 8 days

DDD Iron Condor

DDD

Trade Details

 Buy 1 DDD 2014 10-JAN 85.00 PUT
 Sell 1 DDD 2014 10-JAN 87.00 PUT
 Sell 1 DDD 2014 10-JAN 100.00 CALL
 Buy 1 DDD 2014 10-JAN 101.00 CALL

Net credit:   $0.33
Expiry:         JAN 10

TSLA

Trade Details

 Sell 1 TSLA 2014 10-JAN 139.00 PUT
 Buy 1 TSLA 2014 10-JAN 137.00 PUT

Net credit:   $0.27
Expiry:         JAN 10

AAPL and TSLA Credit Spreads for next week expiry

TSLA

Trade Details

 Buy 1 TSLA   2014 10-JAN 133.00 PUT
 Sell 1  TSLA   2014 10-JAN 135.00 PUT
 Sell 1  TSLA   2014 10-JAN 160.00 CALL
 Buy 1 TSLA   2014 10-JAN 165.00 CALL

Net Credit:        $0.57
Expire:               JAN 10, 14

AAPL

Trade Details

 Sell 1 AAPL 2014 10-JAN 515.00 PUT
 Buy 1 AAPL 2014 10-JAN 510.00 PUT

Net Credit:        $0.22
Expire:               JAN 10, 14