Friday, September 20, 2013

21-4 for September, grade B-

I count 21 winners, 4 losers for the September option cycle. For new readers, that sounds fantastic. Let me temper that enthusiasm by explaining some basics. I tend to take high probability trades. The opposite end of those buying 10-1 long shot tickets. So of course, I am going to have a high percentage of winners. Those buying long shot tickets are hoping for that ten times payoff, and that is the big risk for the kind of trades that I favor. That I will be on the wrong end of a big move. 

Overall, a good month, but as always with options, it could have been better. This month short calls in Boeing, and the retailer ETF reached the way out of the money strike price, and I covered the short calls. Gold also had some wide swings and the pain was too much, so I closed some positions. For all of them, I would have been better off holding on. That said, no one knows at that time that it would have been the case. If a trader stands firm instead of taking their lumps, the risk is going down with the ship, if a big move continues against a trader.

I made some money in gold, but selling options on GLD ties up a ton of capital and the gains were relative meager considering how many trades I made, and how much time I spent looking at it. Once again, APC Anadarko Petroleum was a cash cow as it has been most of the year, with short strangles (selling both puts and calls).

I again stayed clear of bonds. People talk about manipulation in other markets, but in bonds, the powers that be are quite open about intervention and other tools (taper, quantitive easing, setting interest rates, setting bank reserve requirements).

Going forward, my exposure is modest:
Net long GLD SPY

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