Monday, January 25, 2010

Today's Trades

I sold 1 Feb AAPL iron condor and 20 Feb $117 SPY calls. This sheet is just an IB export and then I made some asethic adjustments. I would like to add a $ risk/reward metric to this sheet. Let me know if you have any ideas on how to add that.


  1. For defined risk trades I think this will be fairly simple as we would just divide the max profit on the position by the max risk. Then when we close out the position it will be the actual gain/max loss.

    But now that I say that there are a lot of positions that I do not hold to maturity which to decreases the risk, so I kind think there should be some kind of adjustment.

    For other positions that do not have a defined risk we need to use some kind of average margin requirment or use something based off of standard deviations like a confidence interval. If we use a 95% confidense interval then we could go out 2 standard deviations from the current price to get a risk estimate.

    But then maybe that gets a little to involved. I don't know.

    Those are my thoughts for now. Not exactly sure how to get a risk metric in just yet.

  2. So far in the after hours AAPL reported a blow out qtr as usual and there hasn't really been any movement. Looks good for us so far.

  3. For me the appealing part of having a defined risk or hedge is that I don't have any anxiety over what might or might not happen. Since you can't trade options in the after hours there isn't much I can do other than play the underlying if you felt the need to hedge. I don't want to say that I don't care what earnings are, but I am much more interested in how the stock trades in the first hour tomorrow after people have had the chance to dissect the news. The instantaneous reaction isn't as informative to me as after the storm has passed. I hope AAPL opens up the iPhone to Verizon for two reasons. I would probably drop the Droid in favor of the iPhone, and I am short VZ puts so that should give me a floor under that stock if the announcement happens.

  4. I to find defined risk apealing and I agree that it helps me sleep at night when my risk is defined. But for me just because I have defined risk does not mean I can set it and forget it. That is just no my style. I never really intend to lose the maximum on the position. For me the defined risk is the worst possible thing that can happen. But you will notice from my posted results that I cut my losers really quick.

    And the only reason I like to watch the afterhours is because it allows me to identify some levels to watch in the pre-market so I can have an idea of what to expect.

    Why would you drop the droid to move to the i-phone? The i-phone still would not be open source so there would be a tone of features that you can get on the droid that you would be able to get on the i-phone. For example the free tethering through pda-net. The only reason it is possible is because the droid runs android which is an open source software. Apple on the other hand does not allow this open collaboration. And they are very restrictive.

    But I see you point on VZ. I do think it would be beneficial for VZ because the biggest complaint for the i-phone is the AT&T service.

  5. Well let me rephrase, I would be interesting in entertaining the idea of having the iPhone if VZ could be my carrier. But I didn't think about the tethering aspect, that alone would probably keep me from switching. I'm staying in a cabin in Tahoe next month and last time I was there two years ago they didn't even have dial up. So the tethering is a necessity. I'll be there for 9 days and no way I'm going without Internet for that long.