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Non-Day Trade: The biggest impact of doing this journal has been the way my view of writing options has changed. I would never have imagined a time when I wouldn't have option premium in my account. Markets change, and people change, but time never stops. I've always viewed time decay as an edge that, managed properly, would always be there. But having to write about it every day has really made me question whether or not the risk/reward is worth it. And I'm not sure that's the case any longer. I'm no longer convinced the retail trader (obviously with some exceptions) can make a living writing options. Should it even be a part of my arsenal? I have to ponder that. I have never been very good at sleeping. So it was never unusual for me to get up 2-3 times during the night to check the markets and make sure nothing too crazy had happened during the night - especially if I had any options that were getting uncomfortably close to the money. But I've really come to like the idea of being flat. Oh, I still wake up during the night, that hasn't changed, but I no longer feel the need to run to my desk and see what's going on. I like it! I closed out my Put from yesterday. Up about 200 for the day, and a positive trade. I still think it's extremely likely to expire worthless, but do I need it? Not really.
Day-Trade Side: Another beautiful day! After so many days of seemingly constant struggle, the past couple of days have been wonderful. Today just exploded out of the gate as the NASDAQ rocketed along. I was up over 2500 before the 3rd leg was even initiated. I elected to skip the 3rd leg, which ended up profitable, hence leaving money on the table, but I like the idea of minimizing risk. It continued working right up until I exited. It even kept working after that, but I was more than happy to call it a day. Up 3840 for the day and this month is off to a most excellent start.
Unfortunately, I have no way of assisting you with this. I don't use amp futures, nor do I have any contacts there. Perhaps a post to a more general section of this board?
Option writing can be very lucrative for even retailers, its just that you should never do that in stock scripts or when you expect volatility to increase, this is the biggest nutshell problem, most retailers do not have good handle on this and when volatility increases you need to be capable enough to do adjustments both financially and mentally, and yes, you can lose sleep over it.
Ppl generally tackle this with some rule defining, some like to go with the specific days and times to write them and some just like to hedge them better (Greeks). It is one of those areas where you do need considerable expertise and good handle on risk management. Making it little less attractive than futures, especially mini and micro ones where you can suddenly have greater returns with relatively lower risks.
I regularly write options, but they are only my national index and often I'm also spreading expiry. Reward is less but it works out in longer term as a bit of safety net for my intra trades.
It is not something you would want to do with really volatile scripts or underlying assets, but it can be done and many do it.
Thanks for your input. I've sold options since 1997, so I've seen a variety of market conditions and volatility throughout the years. I've made a lot of money writing options, and had a couple of epic blowups. I know all the numbers (I'm a numbers guy) and have written my own pricing model, which I feel is more accurate than the Black-Scholes which assumes log-normal distribution of prices.
My question was more internal. Does it make sense for me? I've always liked having two sources of trading income. For many many years, my day trading was an adjunct to my options writing. Often times the majority of my income came from premium while my day trading puttered along. Now it seems to have flipped the script, and with the advent of micros and the increased granularity, I now derive most of my income from the day trading portion as you can see from my posted results. My intent was not to say that nobody can be profitable (and I apologize if that's how it read), but to say that, for me it might make more sense to focus primarily on the day trade portion.
That's awesome!
You have certainly also given me something to think about.
Yes, of course, I'm not countering at all whether it can make money or not, sorry if it came like that. Just putting something of discussion point as I thought you were giving up on that stream of line, but like you said its more of an internal question and not one to outsiders, I might have jumped the gun. I apologies
But something did came out of it, for me at least, so thank you
Day Trade: Like the last few days, the trade took no heat today. Unlike the last few days it did not rocket into the stratosphere. It seemed to want to oscillate between +500 and +1000, doing so several times. Lowest was -200 and best was +1200. So after the last rotation up to +1000, I decided to call it a week. It's been a very very good week and I don't want to end it on anything but a positive note. So I am, like many corporate people do, leaving early on a Friday. Up 1087 for the day.
JB,
I am relatively new to this game and I have to ask about your day trading. I know you have mentioned that the majority of your income is now coming from day trading since the advent of the micros. The micros offer small profit (for smaller risk, of course) and the amount of profit you are booking daily indicates that you must be trading a substantial number of contracts or using algos, or you're just a trading machine!
Could you just, in general, explain what your day trading consists of? I'm not asking you to reveal anything proprietary or personal, but as a new trader I just try to learn everything I can from people who have a successful track record. Plus I have a naturally curious nature, and we all know what curiosity did for the cat!
Thanks for sharing your information and have a great weekend!
Mike
NW Trader
There is no path to happiness. Happiness is the path.