tRading from HOME

Afterthought : WYNN

JC — Thu, 12 Jan 2012 14:43:06 +0000

The setup was perfect. The only point I neglected in my strategy rules was that the options has to be below the threshold as I was taught. For this trade, the loss potential was 40% with a reward of about 70%.

I definitely should have passed up the trade for this reason, or at the least buy a counter option to minimize my downside risk. Most expensive lesson in options trading to date.

I will take extra caution in my next live trade. For now I will go into virtual trading.

5th trade stopped out : WYNN

JC — Thu, 12 Jan 2012 14:35:05 +0000

Stopped out at $2.11 from $4.33. Loss of $222. Terribly wrong.

Acct : -$409

5th trade : WYNN

JC — Mon, 09 Jan 2012 15:43:45 +0000

Bought JAN CALL on WYNN. The risk/reward is better than 1:1 but it is quite a considerable amount of risk. I chose JAN instead of FEB month because the dollar risk is the same. Only that the FEB options cost more in value due to longer period to expiration.

Do not worry. Just let the market wash in the profits !

4th trade : MON – earnings

JC — Sat, 07 Jan 2012 14:42:02 +0000

Monsanto was announcing earnings. Played straddle 72.50. Closed the Call leg for profit of $354. The other leg has a maximum loss of $267, which is its cost as well. I will record for now the guaranteed profit of $354-$267= $87

Acct : -$187

2nd trade closed : DD

JC — Sat, 07 Jan 2012 14:32:32 +0000

Entered at $4 each for 2 contracts and exited at $2.92. Trade loss of $108×2=$216.

Acct: -$274

Afterthought : AMZN

JC — Wed, 14 Dec 2011 16:40:53 +0000

I have no idea why AMZN dived and never resurface ! Quietly thankful that I entered with a STOP LOSS or else the option value would have been zero.

So the biggest lesson here is to USE STOP LOSS !

3rd Trade : AMZN

JC — Wed, 14 Dec 2011 16:05:02 +0000

Amazon had a big gap down in the first hour. Bought a call on it but it never came back. A lost boomerang.

-$98 on this one.

Acct : -$58

2nd trade : DD

JC — Mon, 12 Dec 2011 16:05:47 +0000

Looking to hold a put position on this one for weeks. Entered on 13 Dec, which happens to be my birthday as well. The FOMC decision was out before my entry. This stock stood firm on its direction so I thought I’d just give this longer-term strategy a try.

Afterthought : SJM

JC — Sun, 11 Dec 2011 16:14:46 +0000

SJM eventually went up to where I targeted it to be, but I had to exit early before the weekend. My decision to enter was right because the entry was there. The timing of my exit was also correct because my rules tells me so and it is not good also to hold it through the weekend. The option’s value will drop due to time decay and is exposed to stock price gaps.

I guess when you’re doing trading/investing, it is either about having your trade decision right or your balance coming out black. Just have to remind myself that I was right in my trade (setup, entry, timeframe, stop loss, exit), especially when the stock doesn’t go my way and I end up having less.

First Live Trade ! SJM

JC — Sat, 10 Dec 2011 16:20:23 +0000

Bought 2 call options on SJM on Monday, 5 Dec 2011. I exited yesterday, early in the US morning, after hearing from my friend that the EU summit was coming to a conclusion. I knew the US markets were going to open with a big swing on anything that comes out from Europe. Managed to exit with a tweeny profit

I will be keeping a record of my account’s growth, before commissions.

Acct: +$40