Ok folks, the short story is I made very little money this week ($50). I had been set up for quite a bit more. And this is where the story gets interesting.
First the trades I had on:
RUT 750 Call
RUT 760 Call This was set up for a 4.8% ROI
SPX 1260 Call
SPX 1270 Call This was set up for a 7.8% ROI
These trades were put on Wednesday. All was ok until Friday morning. The SPX had moved upward all Thursday and so Friday morning I was going to exit out of my position at breakeven. So, I go to enter the trade, get the trade entered, and immediately after my wireless radio tuner goes out and disconnects me from the internet. A few swear words later I go and get my sweet baboo’s computer and login to my account. Much to my surprise when I logged back into my account the trade had been cancelled and I was starting to lose money. So I was typing as fast as I could and managed to get in a trade. But by that time (almost an hour had elapsed between trying to figure out what happened on my computer and then getting my honey’s computer) I was saying many GRRRRs to my computer and Optionshouse. They maintain that I cancelled the order. Only thing I can think of is that when my radio tuner went out it must have sent something along the wires that cancelled my order.
So RUT trade did me well, but the SPX lost me some. Between the two I made $50. So good thing I was diversified in my trades so one baddie got some relief by a goodie.
NEW ANALYSIS TOOL!!!!!!
I am adding some more analysis to my work. I am starting to use the 20 day simple moving average as a part of my analysis. If I would have used this analysis I would have seen that the price for SPX crossed over the 20 day SMA (Simple Moving Average) and would stay there the rest of the week. My Wednesday look would have shown the SMA cross, telling me I should have gone with puts instead of calls.
As can be seen in the chart the blue line is the 20 Day SMA. By the end of the day the price moved above the SMA line and stayed there all week. This is a STRONG indicator to use puts for the weekly options person. But I didn’t know that until I started doing some reading the LinkedIn Options traders forum. A guy there used 20 day SMA as his lead indicator for trading weekly options. Now he trades directionally – calls and puts only, he doesn’t do spreads like I do but the principle is the same. If I had known this I would have probably been safe last week and not had to get into the mess of making a saving entry and then having hardware issues. The put spread would have brought in slightly less premium, but it would have been much safer. So, I am now adding the 20 Day SMA to my arsenal.
Be careful this week my friends, the trading will be light this week, so market volatility could be high!
TTFN
Ash
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