Thoughts of a mechanical engineer turned programmer turned statistical investor. Here to save you from making mistakes I made at the beginning of my investing career.

Trade alert – closing some trades which worked out in this crazy market

This was the nasdaq in Octorber (so far):

The first week looked off to a great start, until Friday afternoon where it erased all progress. Then the second week kindof went nowhere, until Thursday where the market fell off a cliff in the morning, only to close green for the day and back above where it started the week, until Friday which again erased all progress, dropping us back to beginning of the month lows.

Today the nasdaq is up 3.5%, putting us back up to last weeks highs.

I put a post at the end of last month (when we reached June lows) with a couple of relatively short term trade ideas (AAPL, AMZN, V) because I was feeling relatively under-invested and I like investing in VIX 30+ environments, because statistically the VIX goes down from there.

Today, with the market basically where it was back when I did the post, I’m taking profits on some of the trades that worked out. And thats the good thing about these statistiacally high probability trades which sell time premium – now, 1 month after I initiated the trade, with the market in the same place it was, I still made some money. And thats really all I’m trying to do, is make some money, while waiting for my more major positions to make money.

1 – My AMZN BPS which was an initial 200$ credit I closed for another 85$ credit, so small change.

2. My V call butterfly which was an initial 1350$ debit I closed for 2500$ credit. Although I didn’t need to close this, as its on track to make even more money, it expires at the end of this week, and I would rather take a double (almost) than risk another 3% down day and lose my initial debit (in addition to my current profits). I’m leaving the 175-170 BPS to expire this week even though I could close it now (for another 600$ profit), because with V back up at 185$, it seems unlikely that it will go down significantly below 170$ this week, and even if it does, my break even is 165$, and I would love to buy V at 165$ if I got the oppotunity, so theres really no risk here. In all likelyhood the position will expire worthless in 5 days and I will pocket the $675 initial credit (in addition to the 1150$ profit on the buttefly above).

3. I closed my TSLA 210-200 BPS which I opened for initial 400$ credit because TSLA is up 13$ today (218), and while similar to V in that I doubt TSLA will go down below 190$ this week, I have 85k$ of margin req for my June 2024 tesla 150$ short puts and I would rather just take this small profit and re-open if the market drifts lower again.

The other positions (as detailed in above linked post) I left – as they are “on track”, and I now freed up probably ~30k$ in margin, leaving me exactly 50% invested, so in a position to gain significantly if the market goes up, but with enough cash on the side to deploy if we do dip down below June lows again. And now with the added bonus of a couple thousand $ of realized gains.

I did a couple of other trades to pick up some pocket change while I wait which I didn’t specify here (and a couple of adjustments), if you’re interested in screenshots of them leave me a comment I can do a post about it.

Its true these couple hundred dollar profits aren’t very significant, but first of all they are nothing to sneeze at, and second of all they are just to pass the time while waiting for the time decay of the more significant positions. So if I can make 5-10% on my long term short put sales, and then I can pick up another 5-10% on these shorter term plays, I can end up with 10-20% profit total, in a horizontal or even slightly down market. In this market that the nasdaq is down 33%, I’m still down, but only 13%, and assuming the nasdaq doesnt continue going down the rest of the year, I expect that number to definitely improve by the end of the year.

This week we have earnings so we’ll see how the economy is actually doing and possibly open some earnins plays as oppotunities arise.

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