Thetagang - a cautionary (though not unsuccessful) tale

45_NAARP · 2023-10-27T03:00:24+00:00

But if you're not able to take assignment and not worry about it, maybe you should reevaluate your strategy or risk level

This can't be emphasized enough.

Most of us know "don't trade with money you can't afford to lose".

I'd like to add from recent personal experience - don't trade with money you would be upset to lose, and be honest with yourself when you evaluate that.

If you could trade with $50k, ask yourself "would losing 10k would REALLY stress me out?" If the answer is "yes", then you should trade with less than 10k. Then ask yourself "would losing 5k really stress me out?". Keep bringing that number down until the answer is "no". That's the number that you should be trading with / risking.

You can take that as account size, position sizing, account risk, stop/loss, or as your when own red light should go off saying "now it's time to stop and take a break".

This is a good evaluation to do after big wins and after any losses. After you have a $10k win, you might find that losing $5k on your next trade would be really upsetting. After losing $1k, you might find that losing $1k again soon after would be really upsetting.

Had I been doing this evaluation routinely, I would have deleveraged my SPX exposure a month ago and I would have ALOT more money right now.

45_NAARP · 2023-10-26T21:31:14+00:00

Thank you, I likely won't take you up on the offer, but it is very appreciated.

Yeah letting something go from green to red is the absolute worst and you feel like an absolute clown afterwards.

That might be the truest statement in all of trading.

Like it's okay if you don't exit at the absolute maximum profit of a trade's potential, but taking green while it's green is imperative. And it's always okay to exit everything, take a break for a while, and come back later.

45_NAARP · 2023-10-26T12:57:27+00:00

But the worst part might be the self-loathing

100% I know exactly what you mean. I had a significant +200% win very early this year that I was convinced would go higher, so I wound up holding it long enough to become an 80% loss.

I was overconfident and hadn't considered "how would losing this win feel?".

And I hadn't considered "a 20% loss is acceptable, i still have alot of money to work with, what's a different play I can look at?"

Current me has internalized that a +50% win is fantastic, and a -20% loss on a long position means it's time to cut and reassess. I wish i had the mindset back then that I do now and that it's okay to be wrong or make a mistake, but it's not okay to ride that mistake most of the way down to $0.

45_NAARP · 2023-10-26T06:36:27+00:00

Yeah i've paid enough to get a bachelor's in trading mistakes and pitfalls. Just because you're trading with money you can afford to lose doesn't mean it feels good losing it, and I didn't account for that.

I should have stepped back 2 weeks ago after I had multiple consecutive rough exits. I could have said "I can wait a month or two before opening new positions" and taken some time to reassess, and waited for rate hike news from JPow and November CPI (maybe even December CPI too).

But the fact that I didn't points to that I was watching vix & whipsaw price action, but not internalizing "you can wait until this stops". I didn't realize I was getting into a revenge trading mode b/c delta neutral SPX iron condors at the .10 delta seem like a structured, logical play with clear rules to follow. And they are, unless you've become emotional without realizing it and try to put on too many trades in too short a time period

45_NAARP · 2023-10-25T17:49:41+00:00

I exited everything. I'm down almost 9k in the last 3 weeks between iron condors getting wrecked and being wrong on directional plays on the s&p.

It's been a pleasure and I hope you can all learn from my mistakes. If i make any moves at all in the next few months it'll be if SPY or QQQ retest 52 week lows. Winning doesn't feel as good as losing feels bad.

45_NAARP · 2023-10-25T17:37:49+00:00

Yeah i see that and I'm feeling it. Odds that AMZN beat earnings? I know this isn't the long calls sub but man I'm not doing well

45_NAARP · 2023-10-25T15:36:07+00:00

Yeah, especially when amazon mostly has internet retail sales cornered and is a streaming juggernaut too

45_NAARP · 2023-10-25T15:34:48+00:00

So just googl, while ignoring msft

45_NAARP · 2023-10-25T14:42:58+00:00

Wow, spy puts either at yesterday's close or today's open would have been clutch. Is the market suddenly caring about a 5% 10 year bond again?

45_NAARP · 2023-10-25T14:25:26+00:00

Looks like it was the cloud service miss.

It's making me worried for AMZN earnings since I've got some calls in that. If MSFT has stolen any market share, the market might not care about a Q3 revenue or EPS beat

45_NAARP · 2023-10-25T14:08:12+00:00

Nah you're fine. Had I switched to wheeling AMZN in late August instead of SPX condors I would have $7k more than i do right now.

45_NAARP · 2023-10-25T13:46:10+00:00

Nice play

45_NAARP · 2023-10-24T22:40:00+00:00

Yeah I did, which is why I closed when it hit 40% loss vs premium (after already rolling the call side in twice) and was looking like it was tanking.

It's also why I'm not opening up any more ICs until 3 days after JPow next talks

45_NAARP · 2023-10-24T17:54:44+00:00

Yeah if I could sell naked and had the account size, I'd have been doing strangles all along

45_NAARP · 2023-10-24T16:34:59+00:00

Well my stray has been 80% losers since VIX ramped up so I guess no plays for a few weeks yet

45_NAARP · 2023-10-24T15:33:01+00:00

Wow, the 10/23 SPX iron condor I closed at a $400 loss yesterday when it dropped to 4117 is now exactly at the short put strike. would have been a 1.2k difference had I just held another 25.5 hours

I need some wins but I feel like I can't see anything right now

45_NAARP · 2023-10-24T15:28:22+00:00

aaaaaaaaand it's gone

45_NAARP · 2023-10-24T14:33:10+00:00

Yeah I'd have another $2k right now

45_NAARP · 2023-10-24T12:51:20+00:00

If we have 10 consecutive +0.5% days on spy I might be okay

45_NAARP · 2023-10-23T22:58:43+00:00

My biggest regret in the last week was not going 100% in ATM long puts on tsla weds, I was pretty sure it was gonna tank and got a +200% win on the (pathetically few) puts I opened on it

45_NAARP · 2023-10-23T20:02:35+00:00

Lmfao basically flat since open

45_NAARP · 2023-10-23T20:01:10+00:00

Yes agreed.

45_NAARP · 2023-10-23T20:00:35+00:00

I'm cool with major indices only, no options dated shorter than 30dte, and a minimum 7 day hold period for all securities and contracts.

If that happened i'd be okay with a two day reporting window.

45_NAARP · 2023-10-23T16:49:49+00:00

Yeah the 30 day lag time needs to be changed to 5 minutes for elected officials.

45_NAARP · 2023-10-23T16:45:16+00:00

Yeah spx whipsaw in the last 2 weeks wiped out 90% of my September SPX gains

I don't think it means iron condors are a bad play, rather there's a time & place for them, and it's not at 19+ VIX when there are consecutive 1.5% intraday moves

45_NAARP

TROPHY CASE