MAR rut condor (+11%) $184

1/31/08
sold -2 iron condor RUT MAR 800/810/590/580 CALL/PUT @ 1.57 credit (mark 715.08)
800/810 verticle @1.02
590/580 verticle @0.55
770 & 650 are the 20 delta points to adjust at.
Plan:
80% plus probabilities going 45-55 days out. picking short strikes at approx. 7-10 deltas and setting adjustments at the 20 delta point or when loss equates to 1 or 1.5of cash flow. Plan to take half of the position off when points are triggered. If you take off all of the loosing position, wait 24 hours then place twice the number of contracts 1 more standard deviation from price and challenge the market to do it again!!
Profit plan: looking to take about 50-70% of total cash flow on these trades. Get out before expiration week.

2/14/08
BTC +1 Condor @.76 original sold for 1.57
realized gain for 1 contract + .81 or 9% ROR
Still holding 1 more contract on this condor, to take off at 12% return or btc condor at .55 (set my limit order at .55)

2/19/08
BTC +1 Condor @.54
realized gain for 1 contract +1.03 or 12%ror

Total return avg. .92 or 11% return

FEB goog butterfly (69% loss)

1/31/08
bot +1 butterfly goog FEB 570/600/630 CALL @ 5.75 (mark 562.03)

analysis:
GOOG has been beaten down and I believe the earnings should prove solid. I don't see them guiding lower as I would think that interent marketing would increase b/c it is cheaper and still effective. YHOO had weak earnings yesterday and I think GOOG could prove to be still gaining ground in the core business.
I learned a lesson with AMZN today and the crush in vols that destroyed the trade. This trade is -vega and will profit from such a crush. I did choose to go bullish on this trade so a gap down will prove devistating for this trade.

2/1/08
sold -1 butterfly for 1.80
originally bot for 5.75
total loss = 3.95 or 69% loss!

FEB amzn ratio b-spread for E. (-loss)

1/30/08
bot +1 2/3 backratio AMZN FEB 85/75 @-6.31 (mark 74.20)

1/31/08
sold -1 2/3 backratio AMZN FEB 85/75 @-11.09 (mark 74.51)
Total loss is 4.78
Worst case scenario and the total loss was WAY MORE than I expected. Very interesting and a very good reason to paper trade your curiosities. The P/L graph looked to good to be true when I put the trade on: not loosing much at all if stock stayed relatively still and making alot if stock gapped!
The big key element was the VOLS
original vols b/f earnings: average 92% for the options used
after earnings: 54%
Crush in Vols = -38%
With the +VEGA so high on this trade, the trade got killed!

FEB VMW call back ratio

1/28/08
Placed a ratio call backspread on VWM for their earnings after the bell today. Took a bullish bias willing to take 50-100% loss on debit of the trade or close upon initial spike up tomorrow best case for above 100% return.
bot +2 call ratio backspreads 80/85 (-2 80 / +4 85) CALLS for an 0.85 debit. Plan to close by end of week if VMW opens up tomorrow down a little up little or down alot. Will wait to see if stock reverses to my favor to close for less of a loss or small gain. Will not hold past Friday as the Theta and gama risk will intensify going into Feb expiration. Can get into a big loss scenario at that point.

some Double DIAG notes

The double diag is a positive vega play.
Take the vega amount multiply by 3 then compare that number to your margin amount.
IF that vega x 3 is greater than 10% of your margin passs on the trade.

FEB GOOG vertical 500/490 (+19%)

1/23/08
sold -1 vertical GOOG FEB 500/490 PUT @3.05 (mark 533.65)
GOOG down aprox $50 today -8%
note GOOG doesn't move this much on their earnings...whats the deal!!
500 a good past support level

1/23/08
BTC +1 vertical GOOG FEB 500/490 PUT @1.75 (mark 555.40)
originally sold for 3.05
net credit 1.30 per contract (1) $130 gain
Intraday trade, I placed a limit order in and got filled.
Figured a 20% gain would be sufficient for this trade.

JAN08 wreckage

my FEB postions are getting wrecked and I am posting this to show the extreme nature of the markets and show that risk management doesn't mean you will never loose money it just keeps you from loosing all or large amounts of it. I would hate to peek at a naked long portfolio after this amount pain...The following is a breakdown of the major indexs and high flying stocks I watch and their % moves from JAN 1 2008 (18 days)

SPY -9%
DIA -9%
QQQQ -10%
IWM -13%
$RUT -12.5%
AAPL -19.5%
GOOG -14%
BIDU -31%
RIMM -21%

FEB SPY call vertical (-16%)

1/18/08
sold -1 SPY 140/144 CALL vertical @0.86
margin = 3.14
Prob of Success = 78%
Idea behind this trade was to pump some negative deltas into my overall SPY postion. Had to shed off the PUT side of my FEB condor at a pre-determined loss, resulting in a 20% overall loss on that condor! Will hope to get back to break even by FEB expiration with the remaining SPY trades being closed at their profit points.

This vertical will require little monitoring, but will close if the loss is equal to the credit I can recieve (.86) or if I like the overall delta postion of my FEB SPY inventories I may keep them on. This is a trading plan with my personal judgement making the final decision.

1/31/08
btc for 1.36
originally sold for 0.86
total loss .50 or 16% loss

FEB08 IWM (30day) Condor (-22% loss)

1/16/08
sold -5 vertical IWM FEB 75/78 CALL @.38 (mark 69.78)
sold -5 vertical IWM FEB 65/62 PUT @.44
total credit = .82
margin =2.18
72% prob.
1,090 buying power reduction for 5 contracts.
have the following stop orders in:
btc+2 75/78 CALL @.75
btc+2 65/62 PUT @.82

btc+2 75/78 CALL when IWM hits 75
btc+2 65/62 PUT when IWM hits 65

The remaining 1 contract tbd

Trading Plan:
put it on with 30 days to expiry get off in 14-17 days, making 10-15% reward. Now instead of selling a 7 delta strikes (high prob), sell 20 delta strike options, this will equate to a 60% prob of success) This is a different animal, you are only in this trade for 7-17 days, once you have 10%+ you start tightening the noose, taking profits. Max loss 15-16%. You are taking in more theta, faster, in this trade vs. the high prob condor discussed here.
Adjustment: (specific criteria with 5 contracts on) Max risk 15% don't loose more than this. Taking profits at 12-15% of margin, protect profits.
with 5 contracts on, when down 11-12% of the margin/risk, take off 40% or 2 of the loosing side. When it gets to the short strike take off another 40% or another 2, then the other 1 when your down more. this will protect you when the market runs then backs off. were trying to stay in the game, don't want to get shaken out of the game.

1/18/08
BTC +2 vertical 65/62 PUT @.83 (mark 66.62)
original credit @.44
debit loss for 2 PUT contracts = .39

1/22/08
BTC +2 vertical IWM feb 65/62 PUT @1.19 (mark 64.54) triggered my stop condition if IWM trades below 65 get me out.
originally sold @ .44
debit loss for 2 PUT contracts = .75
still holding 1 short PUT vertical contract and 5 short CALL verticals

1/23/08
BTC +5 vertical IWM FEB 75/78 CALL @.10
orig. sold @.38
net credit per contract (5)= .28
only holding the 1 short PUT vertical with a contigency stop order if it hits 55

2/11/08
BTC +1 vertical IWM FEB 65/62 PUT @.05
orig. sold @.44
net credit per contract (1) =0.39

Entire trade = -0.49 loss per contract -22% loss or (-$245)

NVDA slingshot stock (-65 loss)

1/16/08
bot+100 shares of NVDA @24.11
bot+1 FEB 22.50 PUT @1.40
sold -2 FEB vertical 25/27.5 @.85
debits 25.51
credits 1.70
total debit = 23.81
will not let my long put expire worthless will roll up or roll down to capture value, to the downside this should leave me flat as well as reduce my cost basis, to the upside b/f FEB expiration my P/L is gradually upward.

2/13/08
btc -1 FEB 25/27.50 vertical for 1.35
original credit of .85
loss of -0.50 for 1 contract
2/14/08 stc -1 FEB 22.50 long PUT @.22, original debit 1.40
loss for long PUT = 1.18
Expiration Fri 2/15
FEB 25/27.5 Call vertical expired worthless
1 contract +.85 credit
FEB inventories result in -0.83 loss

MAR inventories
(2/13/08)sold -1 vertical MAR 27.5/30 @0.92 credit
(2/15/08) btc +1 vertical MAR 27.5/30 @.18
gain for 1 CALL vertical + .74

(2/13/08)bot +1 MAR 25 PUT @1.53 (mark 26.66)
(2/15/08)rolled the MAR 25 PUT down to lock the gain
STC MAR 25 PUT for 3.60 -- original basis 1.53
gain for Long PUT +2.07
(2/15) BTO 1 MAR 22.5 PUT for 1.95
3/07/08 STC 1 MAR 22.5 PUT for 2.55
gain for Long PUT + .60

(2/15) STO 2 MAR 25/27.50 CALL verticals @ .42
(3/03/08) BTC 2 MAR 25/27.5 CALL verticals for .06
gain for (2) CALL verticals is .36 (2) = .72

MAR inventories result in a +4.13 gain

APR inventories
3/07/08 BTO +1 APR 20 long PUT @ 1.50
4/10/08 STC -1 APR 20 long PUT @ 0.87 (mark 19.69)
lloss -0.63

3/26/08 STO -2 vertical 22.5/25 CALL @.19 (mark 19.72)
4/15/08 BTC +2 vertical 22.5/25 CALL @.01 (mark 17.70)
net gain = +.18 (2) contracts = + .36

total APR = -0.27 loss
cummulative total +3.03

MAY inventories (earnings ~5/14)
4/10/08 BTO +1 MAY 20 PUT @1.75 (mark 19.69)
5/2 STC @.27 (mark 21.98)
loss -1.48

4/10/08 STO -1 MAY 22.5/25 CALL @0.40
Add another vertical if NVDA rallies up to 21.
Apr. expiration stock taken at 22.50 + .40 credit
bot stock at 24.11 sold at 22.5 =
4/15/08 BTO +2 MAY/JUN 17.50 PUT calendar @.48 debit (mark 17.70)
earnings vol play, IV's are relatively low and we are at a base DB support.
4/21/08 STC -1 MAY/JUN 17.50 PUT calendar @.40 credit (mark 19.94)
1 contract = -.08 loss
sold -1 @.27 = loss - .21
JUN inventories
5/2/08 bot +1 JUN08 20 PUT @.85 (mark 22.00)
5/22 sold -1 @.15

Total trade closed out for a $65 loss.
loss-.70