04.29.08
BUCY +4.5%
I decided to close my butterfly on Bucyrus today. This was an interesting volatility crush. The stock had gone up $11 since earnings and retraced close to my sweet spot. There was a decent amount of vega crush as well. Considering I was down quite a bit, I am happy with the returns. I closed with a credit of 19.20. That gives me a profit of .82 / 18.38 = 4.5% in 4 days!
BIDU +7%
I closed my trade on Baidu today (white hoof). The stock was up $10 and volatility was creeping back up. I got a credit of 26.50, which gives me a profit of 1.75 / 24.75 = 7% in 4 days!
04.28.08
POT +19.6%
I closed my Potash post earnings volatility crush this morning for a credit of 15.85. That gives me a profit of 2.60 / 13.25 = 19.6% in 4 days!
04.27.08
April Results: +2.4%, $2,220.50
It took me longer than expected to post my April Results. Although, I am not ecstatic about them, they do fare better than most folks in the market. I put on more trades and had a better winning percentage, so that tells me I am learniing and becoming more disciplined. A few of the lessons I learned:
1.Don’t get greedy! I was up close to 5% the day of expiration and put on some trades that were out of my rules and got hammered. I had momentum and should have been satisfied with my results.
2.I am starting to do a mark to market of my trades. For example, if any open trades have losses, I will deduct them from my earnings at expiration. I will then look at any delta change for the next month and calculate those gains and losses from the previous month. This way I am not double counting any gains or losses.
3.Practice makes perfect. The more trades I put on, the more I learn about myself and what trading style works best.
4.The market doesn’t care about anyone. My opinion doesn’t and will not matter. Who cares what I think a stock will do? I just need to properly hedged for any moment.
I will look to produce a better May and continue my quest in becoming a great trader! I love this business!
04.26.08
EBAY +11.4%
I closed my iron butterfly on Ebay on April 23rd for a debit of 5.69. This gives me a profit of .44 / 3.87 = 11.4% in 1 week!
White Hoof Special #4 (BUCY Butterfly)
Strike Prices:
May 150 Puts
May 120 Puts
May 90 Puts
Total Debit of 18.38
White Hoof Special #3 (BIDU Butterfly)
Another post earnings trade:
Strike Prices:
May 420 Calls
May 360 Calls
May 300 Calls
Total Debit of 24.75
White Hoof Special #2 (POT Butterfly)
My second post earnings volatility crush trade:
May 230 Puts
May 195 Puts
May 160 Puts
Total Debit of 13.25
White Hoof Special #1 (AAPL Butterfly)
At our weekly meeting, I presented some of my thoughts on post earnings volatility crush trades. Essentially, let the news come out and have the stock trade where it needs to. I can then have better breakevens and capture the volatility crush. I decided to do that with Apple and placed a May Butterfly.
Strike Prices:
May 190 Calls
May 165 Calls
May 140 Calls
Total Debit of 13.00
XHB Naked Puts
I like naked puts as a strategy. Last month, I sold naked puts and decided to enter back in on the trade per a posting on Insanemoney. I sold the May 21 Puts for a credit of .75.
