Thursday, August 6, 2009

XLE Double Diagonal added

Can you believe it? An honest to goodness down day. I hope I'm not jinxing myself by saying that (Bob D and I have a standing joke about whenever we comment on direction, it reverses...unfortunately reverse psychology doesn't work in this case). This really helped all my positions since they were all delta negative and gave me a rare positive P/L DAY number.

I guess I was in the mood for more action (is there a Traders Anonymous?), so I couldn't help myself and I added another new trade today. This time it's on XLE. Unlike most indexes, XLE isn't trading at recent highs, which made it more attractive to me. The trade of choice was another double diagonal to add to yesterday's MNX DD. I also looked at OIH, but decided to go with XLE. So I started to look at some strike choices, found a setup I liked, and was about to place the trade when I noticed that the back month that I modeled was the Sept Quarterlies. Oh, that's not what I wanted to do. But the Oct isn't available yet. And, quite honestly, the Sept/SeptQTRY trade looked decent. Open interest in the Quarterly looked decent. Not much volume. Bid/Ask spread for the entire double diagonal didn't look to bad, so I went for it. I tried getting filled at mid for about 2 hours. Caving in 0.02 I was able to get filled. I was happy with that fill for a 4-legged trade, especially since I was the only volume on my Quarterly strikes today. Trade is pictured below. Adjust when slightly past the short strikes. Consider taking profits if up about 20% and a stop loss around 25%.

Chart of where my adjustment points are.

Whoa. I almost forgot that I entered another new trade today. I put half of my RUT iron condor on today. I'm short the 480 and 630 strikes, and I bought some extra longs (460 and 640) as "insurance" against fast, big moves. I sold about 10 delta on both sides and collected $1.48.

1 comment:

  1. Chad, Hi. I was wondering if I could speak with you about the Sheridan Menotring program. Could you email me at wupill@yahoo.com. I read it on your mytrade page.

    Thanks
    Bill W

    ReplyDelete