I was only able to place 2 trades for Aug expiry and also had to deal with exceptionally low premiums due to the falling VXN. This months profit was just $312.50 - the second smallest since February. I have been calling for a pause in the market for some time now, and yesterdays pullback seems like it will be less than hoped for. The only way to overcome such low premiums is either to sell more contracts 20% otm with about 30 days to expiry, or to sell contracts about 6 weeks out, for a higher premium. However, I am glad to see I have had only 1 small loss since February and as long as the NDX / MNX continue to climb and avoid another black swan event, it is likely that this strategy will contribute about $6,000.00 to my pnl for the year.
Year End Summary – 2021
3 years ago
4 comments:
Thank you for posting your trades. I have visited several times and appreciate you hard work. Question: What brokerage are you using to execute your trades at such little commission?
I use ThinkorSwim (recently acquired by TDAmeritrade....ugh....). I had to call them to negotiate the rate, but it wasn't hard to do.The rate ($1.25) is great for single option trades, but if you trade spreads or 10 or more options, you can do better at other brokerages. This is another reason I like to trade the NDX (1 contract) v. the MNX (10 contracts = 1 NDX contract = larger commission to pay). ThinkorSwim also doesn't charge to close out options at .05, which is great. Hopefully TDAmeritrade doesn't change the commission schedule. Thx for following!
Thanks for the info. I was planning to open an accnt with them, with zecco now.
Do you feel the mkt will be pulling back soon? It sure smells like it.
A pullback is definately coming. Now that cash for clunkers is over, the back to school season is here and will be a disaster, which in turn will lead to a poor christmas season, the market will be heading downward - at some point. I like the saying - the market can stay irrational longer than you can stay solvent. This market can be kept afloat by "green shoots" only for so long. Once economic reality sets in, a pullback of 8-10% (if not more) is certain. Did you notice today the NDX was up for most of the day, but so was the VXN. Looks like traders were looking to lock in some protection on the put side - hopefully this is a sign of things to come. Should a pullback come within the next day or so, I might try to sell another 1300 put or lower, depending on the premium.
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