Friday, February 5, 2010

Game plan execution...

So I sold 2 of the ISRG 340/350 call spreads@1.35. I sold 1 GOOG 550/560 call spread at 1.35 and I sold 1 PCLN 220/230 call spread @ 1.35. See below.


  1. So I am right back where I started. I put these positions on, but the more I thought about them the more uncomfortable I felt. I do not like the risk vs reward on these things. I just think that I am too late to the party.

    I am mentally fucked right now.

  2. So because I opened these and closed these all in the same day I got slapped with the pattern day trader. So my account is now frozen from making any further trades until I have 25,000 in the account. So I will temporarily transfer the additional money to bring the account up to the minimum and fullfill the margin call.

    I fill like an idiot.

  3. The learned lesson is that you don't have to trade. If there are no favorable trades that you like it is okay to sit out. I got so caught up with being very active.

    I don't want to micro manage the market or my account. And I am not going to make a trade just for the sake of making trades.

  4. So it's a learning experience. It's hard not go get caught up in the moment sometimes, especially when the markets are schizophrenic. That's why analyzing your positions nightly after trading is over should give you the clarity of what you want to do. You should have a "what if" scenario on your positions so an unexpected market turn doesn't put you in the position of making a spot decision. For me the hardest part of this is follow through.

    Example: Last weekend I wrote in my investing journal to sell call spreads on any bounces because I believed the market had topped. But when I wake up and the market is up 3 digits in the Dow, it's almost impossible for me to pull the trigger. It's equivalent of trying to catch the falling knife on the way down. Don't beat yourself up, just learn from it and make adjustments accordingly.

    And just so you know, I have enough experience that I should not be making similar themed mistakes, but I did today. Literally last night I looked at the chart of XLE and said no, I'm willing to keep this until expiration. Hitting the $45 level would be tough to take out, but this morning I couldn't get the thought of a $45,000 committment to buy out of my head since I put on naked puts this week. So I closed it out to the tune of $460. That's going to turn out to be a waste of $460 just seven weeks from now. I reacted to an intraday move, it was a panic and now I feel stupid.