Posted on July 14th, 2008 by
Mojo
OK, I finally hopped out of my long trade on First Solar. I entered with a synthetic long and sold calls against it to capture time decay and reduce my delta risk. I did pretty well in timing my adjustments and was able to lock in $15 of premium per contract. Here’s a graph of my entries and adjustments.
I entered on June 23rd and closed out this afternoon. I generated an actual ROI of +63.2% in three weeks and it was my first profitable long synthetic!
Mojo
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Posted on June 17th, 2008 by
Mojo
In our trading group there has been a lot of conversation regarding iron condors and the NDX. On May 15th I put on an iron condor on the NDX. Here’s the chart:
We were well away from Jun expiration, volatility was low (which I didn’t like for iron condors), trend was a bit bullish (which I also didn’t like). I purchased the 2200 calls and sold the 2150 calls to build my bear call spread. Then I purchased the 1800 puts and sold the 1850 puts to build my bull put spread. My total credit was 8.55 on a spread of 41.45 ($50 difference in strikes - initial credit of 8.55). My total maximum potential ROI was 20.6%.
So if I didn’t like the trend and didn’t like the vol why did I take it? Really to see if I could manage the trade by using some of credit premium to reduce delta risk and herd this one through the gates of profitability. Lucky for me I only made a couple of adjustments and the market cooperated. Here’s the chart today:
Today, with expiration right here I closed down the trade for an actual ROI of +16.9% in a little over 1 month. I’m surprised the time decay was able to overcome the adverse volatility movement. Sweet! 
Mojo
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Posted on June 13th, 2008 by
Mojo
I’ve been a little frustrated again with friends and family complaining about the price of gas and oil. In particular the very folks that are complaining are the same people that aren’t willing to spend a bit of time and effort to learn how to trade so that they can make their own money on the rising price of OIL.
My family spends about $500 a month on gas (neither my wife or commute) so I wanted to make gas money for the summer. Sort of like ’stick it back to the man’ if you will.
On of our trading team members was talking about an option trade USO, the US OIL index fund. I took the trade, did some management and just closed for a profit of +70.1% in just a few weeks. SWEET!
That will pay for all of our gas and treaties to boot. Cool!
Mojo
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Posted on May 28th, 2008 by
Mojo
IBM has returned to being a rocket ship today and yesterday. In the big 50 point futures rally at 3:30pm I was able to exit for a great credit.
I sold my long call and bought back my short call for an actual ROI of +186.4% in a few weeks! Man I love these technical setups!
Mojo
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Posted on May 28th, 2008 by
Mojo
Today I close my long call position on Nobel. This position was originally opened with a long Jun 60 call on May 8th following a bull flag technical setup. I sold both the May 65 and Jun 65 calls for extra credit.
I closed today for an actual ROI of +85% in three weeks!
Mojo
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Posted on May 23rd, 2008 by
Mojo
With the downward movement of the major markets and Pepsi today my call calendar fell right into the sweet spot and I closed it today for .66 credit.
That gives me an actual ROI of +22.2% in 8 days!
Mojo
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Posted on May 16th, 2008 by
Mojo
Back on the 12th I mentioned some thoughts on how to put together an iron condor like trade on the RUT but in a low volatility market. Basically, I wanted a similar set of wide breakevens, returns around 10%, and about the same capital.
A triple calendar is what I settled on. I set the strikes at 690, 730, and 770. One of the advantages that I hope to capture was that I wouldn’t have to wait three weeks for a decent return. If the volatility in the market crept up then I should be able to exit early.
Well, I got lucky and that’s exactly what happened today. In all of the market gyrations and fear my calendars grew in value and I was able to exit in 3 days for an actual ROI of +9.5%!
Boy, I wish all of my calendars worked out this well!
Mojo
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