On Monday, the market runs too
hot. I close several sold calls for losses. The straight up rally can
be just as bad for strangle sellers, as a sharp decline. Netflix,
Amazon, Apple, are the main culprits, but there are others. The good
news is that I finish the week up over 2%, about the same as the
increase in SPY.
I’ve shifted my focus to staying near delta
neutral. I’m selling options closing in with higher deltas when
necessary. I got an email saying my account was flagged because a 20%
down move in the market would be very, very bad for me. Selling a lot
of 10% probability puts, as was my preference would create huge
downside risk.
My overall stance is a shift is away from counting wins and
losses. Win percentage is only one metric, and while it can be
useful, the emphasis is shifted towards net liquidating value, and
risk.
Earnings season will soon be upon us. Netflix showed that big moves can happen outside of earnings. As always be careful out there.
No comments:
Post a Comment