Tuesday, August 18, 2009

Position Update & Celebration

Position Update
Ok, before I head off and leave the market alone wanted to update what I am doing position wise.

I am currently exposed around 25% via futures with my ES position short from 1012 (1016 SPX). We have only exceeded 1012 on futures ONCE during cash hours in past 2 weeks (which is when I initiated the position) so I am feeling very positive about this position for the longer term. This position will only be closed out when we exceed 1012 during cash hours - no hard stop in place, if we break 1012 will get out on pull back or through break even hedge.

Longer term. As I will have some time this weekend I am going to post another update for the longer term here. As a result of what we are currently going through I am increaseing my short exposure slightly and will start to leg into longer term puts. I have added my first very small chunk today via:

FYS XG - S&P Dep Receipts [SPY] Dec 85 Put
SWG VQ - S&P Dep Receipts [SPY] Oct 95 Put

I will be adding more as we go higher with a final target of 1008. I have 3 other limit orders ready at 994 SPX, 998 SPX and one last at 1008 SPX.

Full position will represent a 10% exposure via options (which is quite large for me so I am pretty committed).

Quite ironic - Today marks ONE YEAR of blogging for me. I started this blog last year on August 18th and its been a fun ride. As we all know the last 5 months have not been pretty and many have given up on the markets and minimized their trading activities. This becomes quite apparent on the traffic decrease I am seeing. Lets hope this one year anniversary will mark a turning day for us and we can finally enjoy trading again and of course make some money.

I see good things for all of us for the remainder of the year - whether its upside or downside, the past 5 months have been amazing for my trading skills and I am looking forward to apply this new found strength.

Talk to you all soon and good luck everyone.


  1. for anyone that is afraid to commit to longer term puts and you think we have more upside add some sept calls.

    S&P Dep Receipts [SPY] Sep 100 Call

    This is what I added as a 50% hedge (which actually is a 100% hedge due to the price movement of the option against SPY with the expiration date offset)

  2. And this one is just for Ryan. I just went long UNG with a stop at 11.90.

  3. Congrats on the blogging anniversary Chris. Still here reading :)

  4. thx =)

    I know I have lost a lot of readers due to my infrequent updates. In the past I had a much more structured method of updating for the trade days.

    Now it seems I am just blurping out random thoughts - it'll get better again =)

  5. I'm glad you're back Chris and I hope UNG goes back up now that you're in it! I've been holding on for the past week without a hedge and it's hurting REALLY especially from the 2x leverag and decay :( Today, I couldn't stand watching it anymore so I hedged myself to stop some of the bleeding. But now that you're long, perhaps I should get rid of my hedge :)

  6. you are doing all right Chris. keep blogging. your short term targets have been very accurate. hey, some of the best have missed the four month up-leg. I leraned too along with you.

  7. UNG is a tricky one I have to admit. The only way I play this one is with tight stops at key levels. If you on the right side of it let it ride, otherwise its better to walk away from it.

    Sure hope it works out for both of us =)

  8. I remember long ago, I got rid of my hedge and then it just continued to drop. I'm itching to get rid of it EOD but I think I will learn this time from your previous comment and think of it purely as a HEDGE and not a trade. So I just might keep it and stop loss at break even.

  9. yeap - trust me I am horrible at hedging and make the SAME exact mistakes and closing hedges that are in the money way too early.

    Think about this - a hedge is a contrarian play to your position. If your hedge continues to outperform your core position something is wrong.

    The profit factor of my long plays in the past 5 months have been amazing while my shorts have gotten pummeled. Thats got to tell you something - too bad I was only long very little and the money made from longs was minimal compared to the short losses. Got to tell you something if the correlation between core position and hedge is so drastically different.

  10. This is tricky market for the last two dys. 20 points down and flat for the rest of thday and today 10 points up and flat. it seems market does not want day traders. Place your bets before hand no peeking during the day.

    You have to play IT or swing trade.

  11. yeah. you only get rewarded if you take a gamble here. Otherwise you get burned. Yesterday I tried to trade the mid day - losses, today tried to trade the mid day - losses.

    I did enter a quick NQ short here at top a bit earlier (1587) for a quick scalp. In the money now but not really liking that we are not selling off further. Probably rally into the close and take lots of stops with it to pin it at 892.20-892-45

  12. lol nice trick there. They took my stop before running it down on NQ. Got to believe in my system. First stop placed @ 1588.50, then moved it lower after a few minutes. High of the day 1588.25.

    [to self] "you know chris, there is a reason why you wrote down those rules for you, because you learned from those mistakes many times in the past, follow the rules you make money, trade around by feel and you loose"

    tsk tsk tsk - no dinner for me tonight =)