Saturday, July 16, 2011

July 2011 Options Expiration Results

This was a great month for traders as we had some good range-bound but volatile markets. It allows you to get paid quicker on your trades if you're right on direction. The bottom line number this month is $8096 and I needed it. The previous two months were turds as I got myself in some trouble with position size and strategies used. There were a few mistakes as always that don't show up in the numbers. I took a few trades down early for no reason other than I wasn't able to discipline myself with patience. I didn't exit one trade when I should have and missed my profit target as it was hit. There are two profitable trades on CL that were both just extremely lucky timing on the trade exits as both would have been losers had I let them go to expiration. In the end the numbers could have been better or worse. I suppose this will always be the case as if you're trading frequently you're going to continually both make mistakes and get lucky over time, it's just part of the game. At least for me it is.

I find myself successfully correcting some bad behavioral issues or problem areas from past months only to fall back in to the ones I'm not currently working on. Overall I've made great strides and my confidence is always slowly growing, though I'm constantly working on something. I suppose this also will always be the case. I read a lot of other traders post and know I'm not alone with these issues. At some level I like this as I don't want to be a robot and I enjoy trading off the psychological aspects of the market. If we were all robots and made no mistakes or let our emotions get the best of us then trading would probably be pretty boring. The trick is really to make less mistakes than the next guy.

I'm still hesitant to ramp up my position size as there always seems to be a recent loss that keeps me from getting comfortable. This is a problem area as I've got a long enough track record of consistently profitably trading to suggest the amount of capital I've been allocating given my availability is too low. I'm making great returns on the risk I take, but literally leaving too much capital on the sidelines taking no risk and thus making no returns. If I have a good first week to the new options cycle I find myself being conservative with the next trades as I'm always scoreboard watching and know where my numbers are. This is a terrible habit as I need to make each and every trade that presents itself no matter how the current or most recent trades have performed.

Though I never seem to have what I would call typical results each month as my realized gains have fluctuated wildly, I do at least attempt to deliver consistent results, it just doesn't work out that way. I know ahead of time what my best and worst case scenario should be. The reason I mention this is the results this month are pretty much what I would call typical, if there were such a thing; not necessarily in the dollar amount of realized gains but in the structure of trades themselves. It seems I'm always making changes to the style of trading, underlyings I trade, or position sizing, but recently I've settled in to a formula I like to try and trade around. This is also why I'm not as active about blogging as in the recent past, I'm just more comfortable with what I'm doing and trying out fewer new trades or strategies. On a simple level I like to be short time premium on equity and futures options, and then trade directionally with futures. I shoot for roughly a 50/50 mix and this month just happened to fall in line. I consider these two types of trades separate animals as I might be short SPY calls for the duration of the options cycle but long the ES at some point just for a short-term trade.

For those of you were consider yourself a beginner to intermediate option trader, I highly suggest tuning in to This site launched a few weeks ago and it's a four-hour daily show with about 90-120 minutes each day of what I consider to be really concise great trading information. If you like the Friday afternoon chat on Think or Swim then you'll love this show. The great thing is its archived daily so you don't need to watch live and you can skip the segments of the show that are not relevant to trading. As always if anybody has any comments or questions feel free to comment below or contact me directly via email or Twitter.

July Options Expiration Results

Updated Historical Results


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1 comment:

  1. Great results Jason. I can honestly say that I think you have and continue to take the necessary steps to trade for a living. The proof as you have pointed out in numerous posts is you track record. You continue to prove that overtime that you are a profitable trader. You talk about you way of viewing the markets changing over time...which in my opinion is why you have been successful. The market is dynamic and you have to go where the money is. And you are getting to the point where you have traded enough strategies and asset classes that you could trade virtually any market environment.

    Keep up the good work.