Thursday, May 15, 2008

May 15th Progress Update

I'm starting a new regular segment to my blog, don't you special for being here at the inception? Since I started trading my Roth IRA with tos (thinkorswim) on April 15 I thought I'll give you my net liquidation progress on the 15th of each month.

Currently my net liquidation is +12.5% in 1 month.

I've been trading Iron Condors, OTM Credit Verticals, Calendars and Diagonals mostly on index products (SPY, IWM, QQQQ, etc...). I also have a double diagonal on RIO which has been working quite well. As I've shown previously on my SPY position, I favor balancing Delta to my outlook. If I feel that the market will be more likely to go up, I balance my portfolio with positive Deltas to the degree of my conviction that the markets will go up. I'm still learning which strategies are most agreeable to me, but I know I like having a positive Theta (benefit from time decay) and spreading positions across time is an interesting way to have many features working for me. I can get a benefit from increases in volatility, while still having a positive Theta. Options are very interesting, but it can get a little complicated.

For continuity's sake I've decided to throw in a snapshot of that same SPY position I showed you last week. You can see we've moved right up into the middle of my profitability range. The three red dotted lines represent breakeven on 6/21 and the current price. According to thinkorswim's analysis page (which I believe is based on "normal" distribution of price), I have about a 57% chance of keeping some money, a 15% chance of making a over $400, a 19.5% chance of losing over $200 if the markets sell off down to below $136 and a 23% chance of losing less than $100 if we continue on up above $148. Please note, I don't do the calculations, it's one of the many cool features that thinkorswim offers, I'm simply reading them right off the following risk graph:


Thomas Shawn said...

You look like you're in a good position. Looks like you want the SPY to steer between 136 and 148.

For June I'm wanting the SPY to stay between 131 and 147. I started getting a little nervous as the SPY really took off this wek but I'm hearing that it'll run into massive technical resistance at 145 should it get that high.

Anonymous said...

have you ever made a penney from your bullcrap training